Friday, November 15, 2013

Xero Innovates on Price, Puts Partners in a Tough Spot: UPDATED

Sholto MacPhearson for BoxIT in Australia writes: UPDATE: Response from Xero saying it is priced at the lower end of the field once bundled services added to rival products.
OPINION: What is a fair price for accounting software? That question was tested this week when Australia’s most expensive cloud accounting program for small business raised its prices – drawing a furious response.
I doubt Xero would like to be known as the most expensive software, but the fact is the new pricing scheme puts it well above Saasu, QuickBooks Online, MYOB LiveAccounts and AccountRight Live,CCH iBizz and Reckon One. (Xero said it included free features such as automated super payments which cost extra for rival programs, and once taken into account Xero was one of the cheaper options.)
Xero’s response is simple; the software is worth it. Xero has prioritised internet-based services to boost productivity and efficiency ahead of accounting staples such as a proper quoting system. Purchase orders only arrived last week, well after online invoices and payments, online document storage and, for accountants and bookkeepers, uploading of tax forms direct to the Australian Taxation Office.
Xero’s philosophy is to automate the transactional chores in managing a business’ finances so accountants and bookkeepers can provide more valuable services to business owners such as helping them plan ahead. It’s a worthy mission and has clearly struck a chord with Xero’s passionate following of accounting partners.
This week showed that while Xero’s philosophy has underpinned great improvements in accounting software, it still has a long way to go at selling that philosophy to its target market. The flip side of Xero’s message is that business owners should pay for the value of a service – in this case, software – according to its potential to reduce costs and boost cash flow or profits.
Xero believes so strongly in charging for value that in the US it quadrupled the price for businesses with 100 employees – from US$39 a month to US$180 a month (double the price of the Premium 100 plan in Australia). Xero contacted BoxFreeIT to say the comparison was unfair.
“The previous $39 product and the $180 product are completely different,” said Chris Ridd, Xero’s managing director for Australia. “Up until our pricing announcement, the US product did not include payroll. The new plans announced (along with payroll) also include Direct Deposit to employee bank accounts.”
The same philosophy underpins the move by Xero’s top accountants and bookkeepers from hourly rates to fixed-price packages, set according to the value they can deliver to a business.
But while newer partners are attracted to the software, some have struggled to sell the value message to small business owners who judge everything on cost alone. Some have had to work hard just to get their clients paying every month for their software. Within two years most businesses would have more than paid for a desktop accounting program and just used their bookkeeper or accountant for support.
This is why the price rise has had such a varied response. Accountants further down the path of value billing shrugged their shoulders. But partners newer to the front line, busy trying to absorb this philosophy within their own businesses as well as sell it to their clients, have been caught on the hop.
“I have converted a client who had a big problem with a monthly fee. (I talked her around.) She was on an older version of an accounting program which worked fine for her and her 15-20 casual employees. Now I have to tell her the monthly fee is going up by $21,” wrote Donna, a commenter on Xero’s post announcing the price rise.
“One of her fears was changing everything over and then the price going up. With Christmas coming she will be employing a couple more casual staff, so it will be another $31. I feel sick having to face her with this information,” Donna added.
Xero has to ask itself whether all small businesses will learn to pay for value. The refusal to pay more for a product that could deliver a higher return on investment is one reason why most small businesses stay small.
Xero may be winning converts in droves based on the efficiency of its software. But it may have jumped the gun in its broader mission of convincing small businesses to buy on value and not on price.
Posted on 8:23 AM | Categories:

Intuit Earnings Estimates Boosted at UBS AG (INTU) / buy rating and a $84.00 price target on the stock.

 Zach Kirkland writes: UBS AG analysts lifted their EPS forecast for shares of Intuit (NASDAQ:INTU) in a research note released on Wednesday morning,American Banking News.com reports. They currently have a buy rating and a $84.00 price target on the stock. They previously had a $70.00 price target on the company’s shares.
Intuit (NASDAQ:INTU) traded down 0.29% during mid-day trading on Wednesday, hitting $72.75. 884,822 shares of the company’s stock traded hands. Intuit has a one year low of $55.54 and a one year high of $72.96. The stock’s 50-day moving average is $68.88 and its 200-day moving average is $63.84. The company has a market cap of $20.567 billion and a P/E ratio of 25.73.
Intuit (NASDAQ:INTU) last released its earnings data on Tuesday, August 20th. The company reported $0.00 earnings per share for the quarter, missing the analysts’ consensus estimate of $0.03 by $0.03. The company had revenue of $634.00 million for the quarter, compared to the consensus estimate of $658.05 million. During the same quarter in the prior year, the company posted $0.03 earnings per share. The company’s quarterly revenue was up 11.8% on a year-over-year basis. On average, analysts predict that Intuit will post $3.56 earnings per share for the current fiscal year.
A number of other analysts have also recently weighed in on INTU. Analysts at Thomson Reuters/Verus upgraded shares of Intuit from a hold rating to a buy rating in a research note to investors on Monday, November 4th. Separately, analysts at Wedbush raised their price target on shares of Intuit from $71.00 to $79.00 in a research note to investors on Wednesday, October 23rd. They now have an outperform rating on the stock. Finally, analysts at Merrill Lynch raised their price target on shares of Intuit to $78.00 in a research note to investors on Monday, October 21st. Two investment analysts have rated the stock with a sell rating, ten have issued a hold rating, nine have issued a buy rating and one has given a strong buy rating to the company. The stock currently has an average rating of Hold and an average target price of $70.68.
Intuit Inc (NASDAQ:INTU) is a provider of business and financial management solutions for small businesses, consumers, accounting professionals and financial institutions.
Posted on 8:22 AM | Categories:

IRS Releases Tax Calendar For 2014

Kelly Phillips Erb for Forbes writes: The Internal Revenue Service has released the tax calendar for 2014. The tax calendar gives specific due dates for filing tax forms, paying taxes, and key federal holidays that affect individuals and businesses.
The tax calendar is not a comprehensive list of all tax dates that apply to individuals and businesses. For example, it does not include employment or excise tax deposit rules. The calendar also does not cover filing forms and other requirements for federal estate taxes, gift taxes, trusts and estates, exempt organizations, certain types of corporations, or foreign partnerships.
I’ve put together some of the key dates in a chart form for quick reference:


Click on the document to see it bigger or to download. You also can see the entire tax calendar, complete with more information on employment and excise due dates in IRS Publication 509(downloads as a pdf).
These dates apply to calendar year taxpayers since most individuals and companies are on a calendar year. If you file your return on a fiscal year basis as opposed to a calendar year, you’ll need to make some changes. Generally, you’ll move your estimated payments ahead to correspond with the appropriate quarter for your fiscal year (i.e. if your year begins in February, your first quarter begins February 1 and not January 1). With respect to tax forms, the due date for your tax return is usually the 15th day of the fourth month after the end of your tax year; make adjustments accordingly. That’s how we ended up with April 15 (the calendar year ends on December 31 and April 15 is the 15th day of the fourth month after the year end).
If the due date for a return or deposit falls on a Saturday, Sunday, or legal holiday, your return or deposit is considered timely if it is filed or deposited on the next business day (the next day that is not a Saturday, Sunday, or legal holiday). For these purposes, the term legal holiday means any legal holiday in the District of Columbia. The tax calendar makes the adjustment for Saturdays, Sundays, and legal holidays: April 15 falls on a Tuesday this year, so there’s no extra time for individuals to file this year, but March 15 falls on a Saturday, giving corporations two extra days to file.
It’s worth noting that a statewide legal holiday delays a due date for filing a return only if the IRS office where you are required to file is located in that state (but keep in mind that a statewide legal holiday does not delay a due date for making a federal tax deposit). Here’s a quick peek at where you most likely file your return, for reference:
Most filing and processing centers are located in states with no state holidays in April (shakes fist at Missouri) so you won’t get a break. And while Patriot’s Day occasionally falls on Tax Day, historically resulting in a delay, that doesn’t matter now: the IRS doesn’t process individual returns in Maine or Massachusetts these days so taxpayers in Maine, Maryland, Massachusetts, New Hampshire, New York, Vermont and the District of Columbia no longer have the luxury of that occasional extra filing day.
The one consistent exception is the District of Columbia. Since D.C. is our national capital, taxpayers everywhere get a break when Emancipation Day falls on Tax Day. Unfortunately, not this year: that happened last in 2012.
The real difference in filing dates this year starts at the beginning: the IRS has indicated that the filing season will start late this year – perhaps as much as two weeks, landing us in February for a start date. We don’t have a firm date yet (I’ll update when that information is made public). This delay will not change your due dates: Tax Day remains April 15 in 2014.
Posted on 8:22 AM | Categories:

Smartphone Apps to Help You With Your Taxes

ModernMom Staff writes: Many people fear tax time, but it really isn’t that difficult. There are a lot of resources that can help you properly fill the tax forms so that you get the right amount of money back, and there are even some great smartphone apps that are specifically created to make tax time even easier.
These are the best and most helpful apps that you can use to help with your taxes. Most of them work with both iPhone and Android smartphones.
TurboTax SnapTax
If you are submitting a 1040EZ form, then this is definitely the best app to use for taxes. This free app reduces the entire process of filing your 1040EZ form to just a few seconds. Take a picture of your W2, ensure the details are correct and then submit the document.This app is free, but it costs $20 to file your form. The only problem with the SnapTax app is that it’s only good for 1040EZ forms. If you have kids or made more than $100,000, then you’ll need something else. [TurboTax SnapTax is available here for iPhone and Android]
TaxCaster
Do you want to know the approximate amount of money you’ll owe or be refunded after your taxes are done? The TaxCaster app allows you to enter information about your income and withholdings so that you get a fairly accurate estimate about how much money you should expect to get or pay. While the estimate is a little off since there are many factors that the actual tax forms will take into account that this app won’t, it will help you prepare for tax time. This is very useful for freelancers or anyone that doesn’t have automatic withholdings.[TaxCaster is available here for iPhone and Android]
Mint
Mint is a website and app that takes information about your bank accounts, credit cards and other financial information to create a sample report of all of your earnings and transactions. The great thing about the Mint app is that you can use it to easily file your taxes. Not only does Mint save all of your information to make filing much quicker, but it can actually integrate with the TurboTax app. If you have both apps working at the same time, then you can finish your taxes within minutes. [Mint is available here for iPhone]
H&R Block Mobile
The H&R Block Mobile app won’t let you file your taxes from your iPhone or Android smartphone, but it does have some very useful features. H&R Block is the best place to go if you have more complex returns and you need to talk with someone. This app will help you make an appointment, and there are many tools and modules that will show you what documents you need, about how much money you will get or owe and other features. If tax time is usually hectic for you, then H&R Block Mobile can help simplify the process. [H&R Block Mobile is available here for iPhone and Android]
IRS2Go
The last app to help with taxes is the IRS2Go app. This app directly connects you to the IRS website so that you can easily browse their useful articles, and you can even check the status of your refund. The other useful feature is that this will help you check any IRS changes so that your tax return is correct before filing it. [IRS2Go is available for iPhone hereand Android here]
There are a lot of great apps available for your Apple or Android smartphone when it’s time to do your taxes, and these are just a few of the best. If you need help filing your taxes, scheduling an appointment to see an accountant or getting an estimate of your tax returns, then try the apps above.
Posted on 8:22 AM | Categories:

8 Tax Breaks That Cost Uncle Sam Big Money

Kay Bell for BankRate writes:  Taxpayers are always on the lookout for tax deductions, tax credits and income exclusions that help trim their IRS bills. What we call tax breaks are known as tax expenditures on Capitol Hill. And they cost the U.S. Treasury a lot of money.

The Joint Committee on Taxation keeps tabs on how much money Uncle Sam could lose to tax deductions, tax credits and exclusion of income from taxes. Among the items tracked are some popular tax breaks. The final math? Popular individual tax breaks will cost more than $3.7 trillion in uncollected taxes between 2013 and 2017.

Keep reading to find out how much Uncle Sam is expected to lose under the current tax system on your favorite tax breaks.

1. Health insurance

All employee compensation is subject to tax unless the tax code specifically excludes it. That's the case for certain employer-provided benefits.

The most tax-costly company perk is health care. The value of what your employer pays for worker medical insurance premiums, long-term care coverage and health care doesn't cost you a tax cent.

But it does cost Uncle Sam. Through 2017, employer-provided health care benefits will keep the U.S. Treasury from getting its hands on some $760 billion.

2. Mortgage interest

One of the biggest individual tax breaks is the ability of homeowners to deduct the interest they pay on their mortgages. It's claimed most frequently on the loan used to buy a taxpayer's main residence. But the mortgage interest deduction also can be claimed for second homes.

And those multiple residences don't even have to be permanent structures; a boat or RV could count. Supporters of this tax break say it's integral to making homeownership possible and keeping the housing industry afloat.

But it also comes with a high cost to the Treasury. The Joint Committee on Taxation estimates $379 billion in lost taxes on the tax break for primary residences alone.

3. Capital gains and dividends

Investment earnings get preferential tax treatment and historically low tax rates for capital gains and dividends -- 15 percent for most taxpayers, zero percent for some. The argument for the favorable tax treatment is that it encourages people to save money and invest in stocks, which keeps capital flowing into the economy and provides retirement cushions (that is, if the market doesn't totally tank).

But the cost of low investment taxes to the U.S. Treasury comes in two forms.

Investor savings, thanks to the lower tax rates on profits when they sell, are projected to be more than $616 billion by 2017. That gain for investors is Uncle Sam's loss.

Then there are assets left when their owners die. The increase in value of those holdings isn't taxed when the owner dies. That's because any heirs who get the property can step up the asset's basis, reducing any profit on subsequent sales. That produces a smaller tax bill for them. The cost to Uncle Sam, however, is estimated at $258 billion.

And capital gains taxes that aren't collected on some home sale profits are estimated at almost $130 billion.

4. Pension plans

Another popular workplace benefit is a retirement plan. As with employer-provided health care, the uncollected tax costs are large.

Defined benefit plans, usually referred to as traditional pension plans, pay retirees a fixed amount based on each worker's salary history and length of employment. Employers make tax-deductible contributions and as plan earnings accumulate, they are deferred from income tax. And even though workers will owe taxes when the retirement income is received, the tax cost of this type of plan is estimated to reach more than $212 billion between 2013 and 2017.

Many companies have switched to defined contribution retirement plans. Here a worker's future retirement money depends primarily on the worker's own contributions, though some businesses match at least part of the employee contributions. The most common type of defined contribution retirement plan is a 401(k), in which taxes on the contributions and earnings are tax-deferred until the worker takes out the money. These plans are estimated to cost the Treasury almost $336 billion.

5. Earned income tax credit

The earned income tax credit, or EITC, is available to workers who don't make much money. It was created to help offset the cost of Social Security payments. The credit is available to single taxpayers, but pays more to taxpayers who are supporting families. The credit also is refundable, which means that if a taxpayer doesn't owe any income tax, the filer could get a refund from the IRS.

In recent years, the EITC has become a political lightning rod. Advocates say it encourages people to work. Opponents say the refundable aspect is particularly unfair to other workers who don't qualify.

But there's no argument over the tax credit's cost: an estimated $326 billion between 2013 and 2017.

6. State and local taxes

Some state and local taxes can help taxpayers reduce their federal tax bills. You'll find a place to write off these taxes on Schedule A, the form used to itemize deductions.

Filers can choose to claim state and local income taxes or sales taxes. Property taxes, usually the real estate taxes homeowners pay to their county or parish tax collectors, also offer a nice tax deduction to many taxpayers.

All these state and local tax deductions are projected to cost Uncle Sam more than $277 billion.

7. Charitable donations

Americans are by and large a giving bunch. IRS data from the 2010 tax year (last complete information) show that more than 38 million taxpayers claimed charitable deductions when they itemized on Schedule A. Donations can be cash, which in the IRS' eyes means money, checks or charges to credit cards. Or the gifts can be household goods, vehicles, appreciated assets or even the calculation of miles driven in doing charitable work.

These various gifts to qualified organizations -- for which the donor should have receipts in case the IRS has questions about the gift -- help reduce taxpayers' taxable income, which means lower tax bills.

The donations also mean less money for Uncle Sam. Between 2013 and 2017, this deduction for gifts to qualifying nonprofits will mean the U.S. Treasury will be out an estimated $183 billion. Uncle Sam's losses increase when you add in another nearly $32 billion for donations to educational institutions and almost $24 billion given to health focused organizations.

8. Social Security, railroad retirement benefits

Retirees whose only income is Social Security or railroad retirement benefits usually don't owe federal taxes. However, the IRS gets a cut when a retiree has other income from, for example, a post-retirement job or investment earnings. Married retirees who file joint returns also must take into account any money earned by either spouse in determining whether any of the federal retirement payments are taxable.

In most cases when a retiree's additional earnings are large enough to attract IRS attention, up to 50 percent of federal benefits generally are taxable. However, in some situations a retiree could find up to 85 percent of Social Security or Railroad Retirement benefits taxed.

Still, plenty of benefit recipients escape taxation. They are expected to account for more than $179 billion in taxes that the U.S. Treasury won't collect between 2013 and 2017.
Posted on 8:21 AM | Categories:

Mint Updates Mobile App with Spending Trend Data

MARY WISNIEWSKI for american banker writes:  Mint, the personal financial management tool that inspired copy-cat entrepreneurs around the world, updated its mobile app Monday to include Trends, a feature that lets people view transaction data by category, merchant, account, date or tags. The Mint app update for iOS devices also includes a new design and lets people edit transactions.
Since Mint's initial debut, the tool now owned by Intuit has inspired plenty of startups angling to offer a new take on PFM for the mobile-only customer. Many such entrepreneurs are designing software meant to help people shop smarter, and sometimes save more. Some young companies like Check (formerly known as PageOnce), which also built its own account aggregation technology, let people transact through the app. Most PFM apps let users pull in outside accounts into a single view by partnering with Intuit or Yodlee. A few services offer forecasts of what a person will buy. People "pay" for the services by letting a company see their personal financial information, and receiving product pitches based on their spending patterns. These apps all share one problem: the inevitable data inaccuracies that require manual work on the user's part to fix.

Meanwhile, bankers wonder what PFM services they should offer on a device with limited real estate that's used on the go. To date, the ability to set up alerts is one slice of PFM available to banks' mobile customers.

Posted on 8:21 AM | Categories:
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