Tuesday, December 3, 2013

QuickBooks on Steroids: Performance Enhancements through Client Collaboration FREE Webinar

Join Joe Woodard (CEO, Woodard Consulting Group) and René Lacerte (CEO, Bill.com) for an in-depth web conversation about the benefits of client collaboration for your clients who use QuickBooks or QuickBooks Online.
Date & time: Thursday, December 122:00 PM Eastern/11:00 AM Pacific
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Complimentary Webinar!
During this web conversation Joe and René will discuss how client collaboration:
  • Increases workflow efficiency when working with clients who use QuickBooks
  • Leverages benefits of the cloud even when your clients don't "live" in the cloud
  • Promotes your role from data management to data evaluation and interpretation
  • Empowers your clients to perform bookkeeping tasks when you "own" the QuickBooks file
  • Streamlines assurance services and minimizes risk of fraud through real time data verification and validation
The conversation will conclude with a 15-minute interactive Q&A session with Joe and René.
Space is limited. Reserve your Webinar seat now!
After registering you will receive a confirmation email containing information about joining the Webinar.
System Requirements
PC-based attendees
Required: Windows 8, 7, Vista, XP or 2003 Server

Mac®-based attendees
Required: Mac OS X 10.6 or newer

Mobile attendees
Required: iPhone, iPad, Android phone or Android tablet
Posted on 3:37 PM | Categories:

Leading Tax Expert to Reveal Top Year-end Tax Deductions for Small Business During Live Webinar Event on December 5

Tax expert and best-selling author Barbara Weltman will discuss key, last-minute tax deductions small businesses can take before year-end. Weltman is the featured guest expert in a new webinar, "Smart Deductions for Small Businesses," sponsored by Digium®, Inc., the Asterisk® Company, provider of business phone systems and open source communications software. The live webinar, followed by a brief Q&A session with Weltman, is on Thursday, December 5, 2013, at 2 p.m. EST.  Register Here.
A small business cannot afford to miss an opportunity to save money. Yet one of the most common financial mistakes small businesses make is overlooking key, money-saving tax deductions. As author of "J.K. Lasser's Small Business Taxes 2014" and "J.K. Lasser's 1001 Deductions & Tax Breaks 2014," Weltman will discuss important year-end tax strategies and deductions, including Section 179, which is a tax deduction allowing businesses to write-off up to $500,000 in qualifying equipment purchases made in 2013. This special deduction is set to drastically decrease next year, making it imperative that businesses take full advantage of it in 2013.
"The Section 179 Tax Deduction is a deduction that can be particularly beneficial in helping businesses afford IT projects, such as replacing legacy phone systems with upgraded business communications solutions. Because some equipment can also be leased, it can mean an even greater total savings on year-end communications purchases," said Leslie Conway, vice president of global marketing for Digium. "We're pleased to have Barbara, a nationally recognized tax expert for small businesses, available to provide advice to our customers about these crucial year-end financial business strategies."
Small and medium-sized businesses (SMBs) are invited to attend this information-packed live event to better understand Section 179 and other last-minute tax deductions that can result in big savings at year-end. Weltman will also be available for a brief question and answer session after presenting her tax tips. Register for the webinar at http://go.digium.com/tax-tips-for-smbs-webinar.

Last-minute Tax Strategies to Save Money Before December 31, 2013

Are you at risk of leaving money on the table in 2013? As a small business, you can't afford to miss an opportunity to save money. Yet one of the most common mistakes small businesses make is overlooking key, money-saving tax deductions. 

One of the often overlooked deductions is Section 179. This deduction allows you to write off 100% of qualifying equipment costs, up to $500,000 for equipment purchased (or even financed) in 2013.A recent survey from Balboa Capital indicated nearly half of the small business owners surveyed planned to purchase at least $50,000 in capital equipment this year; yet 45% of businesses were not familiar with the Section 179 deduction. 
What other money-saving opportunities is your business missing? Join us for an information-packed session on last-minute tax tips for 2013, and make every deduction count for your business! 
 
In this live webinar, you'll hear from Barbara Weltman, a best-selling author and leading expert in small business taxes and deductions. The Wall Street Journal calls her the "Tax Guru for Small Business" - and she is ready to give you real savings strategies and key tax tips that your small business can take advantage of before 2013 comes to an end. 

About the PresenterSince the publication of her J.K. Lasser’s Tax Deductions for Small Business in 1995, Barbara Weltman has built a reputation as an experienced and helpful source for small business advice. A tax and business attorney since 1977, Barbara has the knowledge entrepreneurs need to get ahead and stay ahead. 
Posted on 12:17 PM | Categories:

How the Government Shutdown Might Affect the Filing of Your 2013 Tax Return

Kiplinger for Nasaq writes: Question: I'm expecting a refund after I file my 2013 income tax return. Will the tax-filing deadlines be affected by the government shutdown in October? --S.M., Brooklyn
Answer: The shutdown could affect when you file your return. The IRS plans to delay the start of tax-filing season, pushing back the date it starts accepting returns from January 21 until sometime between January 28 and February 4 (the specific date has not yet been announced).

The IRS is using the extra time to update and test the computer systems that process tax returns, a task it would have already accomplished had IRS workers not been furloughed during the 16-day shutdown. Because of the delay, you may not get your tax refund as quickly as you had hoped. You can speed up the process by using e-file with direct deposit.

Getting a refund means the IRS withheld too much money from your paychecks during the year. Rather than wait for a refund next year, arrange to keep more in each paycheck by adjusting your tax withholding. The more allowances you claim, the less tax will be withheld. For help figuring out how many allowances to claim, see IRS Publication 919, How Do I Adjust My Tax Withholding?, at www.irs.gov , or use our tax-withholding calculator .

To adjust your withholding, fill out a new W-4 form (available at www.irs.gov) and submit it to your employer. The change should be reflected in your next paycheck.

Posted on 12:02 PM | Categories:

Winning by Not Losing: Year-End Tax Management for the High-Net-Worth Client

David Reyes for WealthManagement writes: “Rule number one: never lose money. Rule number two: never forget rule number one.”
Warren Buffett may or may not have had taxes in mind when he uttered this quotable phrase, but proactive tax planning is one of the most important things a financial advisor can do to help clients follow Mr. Buffett’s number-one rule. When advising high-net-worth clients with robust retirement assets of at least $1 million or more, it’s more important to focus on protecting wealth from losses – including substantial expenses like taxes –than chasing returns.
High-net-worth clients, particularly those approaching retirement, have “already won the game.” They have successfully built sufficient wealth to maintain their standards of living and achieve their financial goals. Taxes can be the single biggest investment expense they will ever face. What else is going to cost 40% or 50% of their income every single year? Understanding how to navigate the tax landscape – and being perceived by clients as an expert in this area – is a differentiator for any advisory firm. Advisors who do not educate clients on managing taxes, or find a qualified partner to fulfill this role, should expect to lose business to one that does.
While tax planning should be a top priority throughout the course of the year, there are important opportunities for you to consider at year end. Now is the time to reduce your clients’ current tax obligations and develop a strategy for managing taxes over the next 12 months to protect more of the financial assets they worked so hard to achieve.
The Benefits of Tax-Deferral: One way to reduce tax expenses is to achieve more “tax diversification”—diversifying between different tax rates, different types of taxes, and when to pay them. Managing clients’ portfolios within a tax-deferred vehicle like a qualified plan or a low-cost variable annuity is a simple solution. Many advisors labor under the misconception that the cost of variable annuities is too high. But today there are low-cost, no-load VAs designed specifically to provide clients with more tax deferral—without commissions, excessive asset-based fees and complicated insurance guarantees. The fees for today’s low-cost VAs are a very small price to pay when compared with the tax savings and additional accumulation achieved over many years of tax-deferred compounding.
Asset Location for Tactical and Alternative Strategies: It is critical to preserve wealth by avoiding market losses. Consider that an investor who makes only 30 percent of the S&P 500’s total market gains—but can avoid all of the losses—will still outperform the market overall.
Advisors can actively manage clients’ assets to protect against market downturns through a process we call unconstrained investing.  Aim to invest at least one third of clients’ portfolios in tactically managed assets uncorrelated to the traditional stock and bond markets. Seek alternative investments that can mitigate down-market risks and also generate alpha. While finding managers who can do both are rare—it is well worth the added due diligence.
But tactical management and alternative strategies can be tax-inefficient due to high turnover and short term capital gains.  So “locate” these strategies in a tax-deferred vehicle, to preserve all of the upside without any tax drag. Asset location lets you manage the way you want, protect wealth, make more money—and you don’t kill your client with taxes.
Taking advantage of tax-deferred investing vehicles and using asset location to optimize tactical management and alternative strategies are two of the most important steps advisors can take to manage taxes and preserve wealth. Other tax considerations that are relevant to high-net-worth, especially at year end, include the following:
 
  • Health Care Surtax: Be especially proactive this year. It’s the number-one new challenge. High-net-worth clients—or anybody earning over $200,000 a year—is subject to the surtax. And the costs add up. As an example, if a client lives in the state of California, which has the second highest capital gains tax rate in the world, when including the surtax of 3.8% you could actually pay an effective combined state and federal capital gains tax rate of 33%. Using tax deferral for capital gains is a meaningful way to mitigate this issue, as long as it’s a low-cost, no-load tax-deferred vehicle. 
  • Tax-Loss Harvesting: Leverage tax-loss harvesting to achieve tax alpha, especially at year-end.  This is another approach to offset capital gains and preserve wealth, effectively increasing the rate of return on a portfolio between one and four percent.
  • Roth Conversions: Resist the temptation to do a Roth conversion before retirement. It could cause “bracket creep” by moving clients into a higher tax bracket. A Roth IRA can be an important tax-free source of income for clients in later years—and they can save more on taxes by waiting until retirement to do conversions, when they will most likely be in a lower bracket.
  • Defined Benefit & Pension Plans: Many high-net-worth clients built their wealth through a successful business. And one of the best tax planning solutions for business owners at closely-held companies is creating a good pension plan. You help clients put away hundreds of thousands of dollars, reduce taxes, and fund retirement—all in one vehicle. And it is asset-protected—protected from any personal liability—which is particularly beneficial to clients in high-risk professions.
    The competition for high-net-worth clients continues to increase. And to win this business, it is more important than ever to differentiate yourself from the pack. Demonstrating your expertise in tax planning—and putting it to work to protect clients’ wealth from the single biggest expense they can face—should be a top priority all year long, and especially at year-end. Using simple effective tools like tax deferral and low-cost no-load VAs can help clients achieve tax-diversification, optimize the performance of tactical and alternative strategies, and mitigate the impact of capital gains. Your clients may not be as flush with cash—or as eager to pay taxes—as Warren Buffet, but they will certainly appreciate your dedication and expertise to help them follow his number one rule.
Posted on 11:54 AM | Categories:

Year End Tax Planning For The Self-Employed

Dee Lee for CBS Boston writes: Self-employed individuals do get some decent tax breaks. Maybe not as many as the big guys but take advantage of as many as you can.
You can claim a 100% deduction for your health insurance costs. This is a very expensive item in anyone’s budget. This deduction does not go on your schedule C but on the first page of the 1040.
If you make a capital purchase for your business you normally would depreciate it. That is, expense it over the life of the asset, usually 3 to 5 years. Small business owners are allowed to write off some of their equipment in the year they purchase it if they qualify for Section 179 Expenses. The limit for this year is $500,000.
So take the time to evaluate what your profit will be this year and what your business needs are. A computer, printer, a smart phone, office furniture, software, new equipment?
The deduction gets tricky for trucks and vans. No longer can you write the whole thing off if it can also be used for personal use. Certainly, a $10,000 saw for a woodworking shop would qualify for a full deduction.
If you are using your car in your business and do not itemize your expenses, the Standard Mileage Rate for this year is 56.5 cents a mile. This is the mileage rate for the cost of operating your car, van, pickup, or panel truck.
Don’t forget retirement planning; set up a SEP-IRA, Simplified Employee Pension Plan, for yourself and if you have employees you will need to include them as well. You can contribute up to 25% of your income with a limit of $51,000 for 2013. The business makes the contributions for you and your employees.
If that’s too much bother at least set up an IRA to shelter some of your profit this year. Limits are $5,500 for this year with a catch up provision of $1,000 if you are over 50! And you have until you file your tax return next year.
Posted on 11:47 AM | Categories:

Help Clients Avoid Charitable Giving Mistakes

 VERONICA DAGHER FOR THE WALL ST JOURNAL WRITES: Charitable giving season is in full force, and advisers' clients are being bombarded with donation requests. Many will inevitably make mistakes in how and why they decide to give, even if their intentions are good.
Here some advisers describe the mistakes they most often see, and how they try to help keep clients from making them.
Cassidy Burns, principal, Riverbridge Partners: Waiting Until Year-End to Make Charitable Decisions
In the first quarter of each year, Ms. Burns helps clients craft a giving plan that includes a list of organizations they'd like to support. She then counsels them to set two times during the year when they will focus on making those gifts, say in June and December. That way, clients can be less reactive and feel less on the spot when requests come in.
Troy Sapp, financial consultant, Commencement Financial Planning: They're Afraid They'll Outlive Their Money
For clients who fear running out of savings, Mr. Sapp suggests including charitable bequests in their wills. "This seems to satisfy most clients in that they know the charities will receive funds if they're available at death, but it provides a cushion during their lifetime should markets tumble," he says.
Jay Hutchins, financial planner, The Wealth Conservatory: Giving Without a Long-Term Tax Strategy.
Clients need to plot out a multiyear plan to maximise the tax benefits of giving, Mr. Hutchins says. It may better clients to claim a deduction for several years' worth of giving at one time, to offset taxes from an income windfall. A donor-advised fund can enable them to receive a large tax deduction in a given year, and then actually dole out the donation to charities in ensuing years.
Phillip Christenson, owner, Phillip James Financial; Charles Haines, Jr., chief executive, Kinsight LLC: Giving to a Charity Without Getting to Know it First.
Clients can get fooled by charities whose names or marketing make them sound better than they actually are. Mr. Christenson suggests checking out a charity's financial statements, to see how they handle money and how efficient they are in delivering charitable goods and services. "Don't necessarily rely on a suggestion from a friend or a family member," he tells them.
Mr. Haines encourages clients to volunteer with a charity they are considering giving money to. They'll be able to see the organization's effectiveness firsthand and, if they get their families involved, they can perhaps pass on their values and commitment to the cause.
Alfred Peguero, partner, PwC's Private Company Services practice: Not Getting a Proper Receipt
Clients need regular reminders that, to substantiate a tax deduction for charitable contributions of $250 or more, a donor's acknowledgement letter is needed. It must include the amount and date of the contribution, the name of the charity and indicate that it's a 501(c)3 organization. The letter also should state that "no goods or services were provided in consideration for your gift" if that's the case.
Posted on 10:10 AM | Categories:

The Cloud's Poster Boy Stock : Intuit / invest in software companies that are shifting into selling software as a service, or SaaS

Lee Samaha writes: There are three main ways to invest in the cloud. One way is to invest in the infrastructural plays that help to create it. Another is to buy companies whose internal operations are benefiting from utilizing the cloud. The third option is to invest in software companies that are shifting into selling software as a service, or SaaS. The poster boy of the last option is Intuit (NASDAQ: INTU  ) . It's time to take a close look.
Intuit's two key growth driversIntuit's stock is peculiar because it has its very own trading dynamic. Most of its profit is made during the all-important tax season. Subsequently, investors are mainly focused on its tax software's fortunes during the spring quarter.

Source:company accounts.
After the tax season quarter, the attention turns toward its small business group (SBG) offerings. Attention shifts back once the tax season comes around again. Intuit isn't just about taxes, though.
In fact, in its last fiscal year, consumer tax only contributed 45% of full-year revenues. Furthermore, its guidance for 2014 implies that Consumer tax (consumer group) and pro tax will only make up 49% of revenue. Moreover its tax operations are only growing in low single-digits while, the SBG's growth is in the more impressive low-teens range.
2014 Guidance
Revenue
Growth
SBG
2290
10%-12%
Consumer Group
1778
3%-5%
ProTAx Group
413
0%-4%
 Source: Company presentations.
Moving into 2014, Foolish investors should be focused on two things with Intuit. First of all, they should look at its plans to ensure a solid tax return season. Secondly, they should watch the ongoing development of an ecosystem within its SBG.
Intuit's disappointing 2012 tax seasonUnfortunately, Intuit's last tax season was somewhat disappointing for a number of reasons:
  • Overall tax returns were lower than its internal expectations due to a difficult tax season
  • The software category overall only took a 1% share from manual, when Intuit had expected 2%
  •  Intuit didn't grow its online market share as expected, and smaller competitors took market share
Intuit's rival, H&R Block (NYSE: HRB  ) , also confirmed that the tax season was uniquely difficult this year:
"We expected...  ...the season would normalize to historical growth rates of 1% to 2%...  ...we had little reason to believe that growth levels this year would be different than average historical levels.
Instead, at season's end, IRS returns were down approximately 1%, a result no one was expecting."
In addition, investors in Intuit and H&R Block have some cause for concern in 2014. According to Intuit's management, the IRS is talking about "some delays to the start of tax season again this year." While this is likely to be a timing issue, there is a danger that it could indicate a more complex tax season.
Intuit is making some changes to its tax strategy this year. The company is trying to move away from heavy advertising during the tax season, and more toward simplifying its products and ensuring customer retention. This sort of strategy is very much in line with the advantages of SaaS. In other words, SaaS solutions help to reduce customer churn because they tend to involve more of an ongoing interaction than a one-off software sale does.
Intuit develops an ecosystem
Its second major strategic focus is to develop an ecosystem around its various offerings in its SBG segment. The idea is use the cloud in order to cross-sell its financial management, payment, and employee management solutions (which make up the SBG and account for 37% of segment profits.) Furthermore, its tax refund customers can plan how to utilize their refunds by using the lower end of Intuit's accounting and financial planning software, QuickBooks.
QuickBooks is also undergoing a refresh which is being rolled out to existing QuickBooks online and desktop publishers. Again, a big part of the plan is to encourage its desktop customers to convert to its online offering. Intuit outlined that it now had over 500,000 QuickBooks online subscribers, up by 29% from the previous quarter. This provides more power to Intuit's ecosystem.
A competitive marketOne downside to all of this is that Intuit's markets are getting ever more competitive. Paychex(NASDAQ: PAYX  ) has recently launched an online accountancy offering targeted at small business. While this a relatively late move, it still represents the principle of moving to the cloud in order to cross-fertilize its payroll and HR services. Automatic Data Processing's (NASDAQ: ADP  ) also competes with both companies in online payroll, and its Vantage product is a cloud-based suite designed to integrate ADP's human resources, payroll services, and benefits administration in one package.
The bottom lineIntuit is facing stiffer competition, but it's an early mover in offering SaaS-based solutions. It's also being aggressive about developing its ecosystem, and it remains a prodigious generator of cash flows for investors. For example, Intuit generated $1.24 billion in free-cash flow last year, representing around 5.8% of its market cap. With analysts forecasting 11% EPS growth for the next couple of years, Intuit looks like a good value. 
Posted on 7:45 AM | Categories:

7 Tax Tips to Use Before 2013 Ends / You've still got a month left to net some serious savings

Charles Sizemore writes:  This time of year, it’s easy to get wrapped up in the holidays and push unpleasant things like tax planning into January, but believe me — a few tax tips will actually come in handy sooner than later.
For some tax decisions — such as how much to contribute to an IRA or Roth IRA — waiting is perfectly fine. You until have April 15 of next year to make your 2013 contributions. However, you should start your planning now, and we have plenty of tax tips for you to use before year’s end.
Changes to the tax code are scheduled to be minor in 2014, so you don’t need to do anything too drastic. But it still makes sense to pull as many tax breaks into your 2013 tax return as possible.
Uncle Sam doesn’t pay you interest on any refund due, after all, and effective tax rates are slightly higher in tax year 2013 than 2014 due to inflation adjustments that will raise the income levels in each tax bracket. For example, in 2013, the 28% tax bracket starts at incomes of $87,851 for an individual. In 2014, it starts at incomes of $89,351. So if you can lower your tax bill this year, it certainly makes sense to do so.
Today, we’re going to look at seven tax tips that will help you do exactly that:

Tax Tip #1: Max out your 401k contribution

In both 2013 and 2014, the maximum personal contribution you can make to a 401k, 403b or 457 plan is $17,500. And if you’re 50 or older, you can toss in an additional $5,500 for a total of $23,000.
Remember, this is only the portion of your salary that you contribute yourself; your employer also may match up to a certain percentage of your salary.
If you’ve fallen behind in your 401k contributions, there is one quick way to catch up. If your plan will allow it, you can put up to 100% of your December paychecks into your 401k plan. This assumes that you have enough money socked away to effectively forgo a month’s worth of pay — and a month that happens to include the busiest shopping season of the year.
But if you can afford to do it, you should. You’ll pay less in taxes this year and give yourself a head start in your 2014 financial goals.

Tax Tip #2: Contribute to an IRA or to a Roth IRA

In 2014, you can contribute $5,500 to an IRA or Roth IRA and $6,500 to either if you are age 50 or older. These contribution limits are unchanged from 2013, but there are a few changes you should know about concerning income limits. This is one area where the IRS really punishes success, and that is a shame.
In 2013, if you earn $59,000 and have a 401k or similar workplace retirement plan, your IRA contribution tax deduction starts to get phased out, and at $69,000 it gets eliminated altogether. In 2014, these amounts get raised to $60,000 to $70,000, respectively, but this means that plenty of Americans are still denied a fantastic tax break due to their earnings “too much money.”
If you don’t have a workplace retirement plan but your spouse does, you still can contribute to an IRA and get a tax break. But it starts to get phased out $178,000 in combined income for the couple and is eliminated altogether at $188,000. In 2014 these limits get raised to $181,000 and $191,000, respectively.
Roth IRAs are also getting higher income cutoffs in 2014. The AGI phase-out range for Roth IRA contributions will be $114,000 to $129,000 for individuals and $181,000 to $191,000 for married couples — that’s up from $112,000 to $127,000 and $178,000 to $188,000, respectively, in 2013.
If you qualify for a Roth contribution, do it. The Roth IRA is the best retirement vehicle ever created in this country. But if you don’t qualify for a Roth, a traditional IRA still is worth considering, even if you have a 401k at work and you’re disqualified from the current-year tax deduction. You still benefit from tax-free compounding of capital gains, dividends and interest, and you also enjoy the lawsuit protection and estate planning benefits of an IRA.

Tax Tip #3: Adjust the timing on your investment sales to push gains into next year and losses into this year.

You should never — and I repeat, never — make an investment decision based purely on tax minimization. Taxes should be a consideration, but fearing the tax man alone is not a legitimate reason to hold on to an appreciated investment you feel might be at risk, nor is it a legitimate reason to sell an investment that has fallen in value but that you still feel is a bargain.
That said, if you’re going to do a little portfolio pruning, this is a good time to do it. We all make that occasional bad investment, and it’s prudent to cut your losers.
And if you’ve been looking to take profits or rebalance, it makes sense to wait until after the first of the year, so long as you’re observing your usual trading rules (following stop losses, etc.)
If you sell an investment to harvest a tax loss, you’re subject to the wash sale rule. This means that you can’t buy it again within 30 days if you want to claim the loss for tax purposes. But there is absolutely nothing in the rulebook that says you can’t buy substantially similar securities. For example, you could take a loss in the SPDR S&P 500 ETF (SPY) and buy the iShares Core S&P 500 ETF (IVV) the very same day and not be subject to the wash sale rule.
Given that the market is near all-time highs, portfolio losses might be few and far between. But it’s good advice to keep in mind during the next correction.

Tax Tip #4: Make a large contribution to a Health Savings Account (HSA).

This is only applicable if you have a high-deductible health insurance policy that is compatible with HSAs, but millions of Americans — and particularly the self-employed — fall into this category.
The uncertainty surrounding Obamacare complicates matters in 2014. Assuming no changes to the Affordable Care Act, HSAs still will be available, even if the connected insurance policies are more expensive. But the entire healthcare industry is in a state of flux right now, and HSAs might no longer make sense once the dust settles.
I’m a big fan of the HSA structure because it encourages patients to be more careful with their medical dollars and gives them a degree of power they don’t have with traditional insurance, but you really have to run the numbers for yourself. If a bare-bones insurance policy is all you need, then you might as well take advantage of the tax breaks.
HSA contributions give you a similar tax breaks as traditional IRAs. In 2013, an individual policyholder can contribute a maximum of $3,250, and a family can contribute $6,450. Next year, the limits rise modestly to $3,300 and $6,550, respectively. If you’re age 55 or older, you can chip in an additional $1,000.
Unlike IRAs and Roth IRAs, HSAs are not subject to any income limitations.

Tax Tip #5: Get any elective medical or dental work done in 2013

Medical expenses not covered by your health insurance are deductible in 2013 if they exceed 10% of your adjusted gross income. And if you’re 65 or older, you benefit from a lower threshold of 7.5% of adjusted gross income.
If you have a high-deductible health insurance policy or somehow managed to find yourself uninsured in 2013, it can be remarkably easy to hit those levels. Ten percent of an AGI of $75,000 would mean that you need only $7,500 in medical expenses to take this deduction, and plenty of Americans spend more than that in a given year. Keep good records of all of your medical expenses — everything from doctor visit copays to prescription drug refills — and popular tax programs like Turbo Tax and TaxAct can calculate
It absolutely never makes sense to get unnecessary medical work done to get a tax break. But if you’ve been putting off an elective surgery or even needed dental work, you might as well do it now if doing so will get you over the deduction threshold.
Want an extreme example? I write this tongue-in-cheek, but I’ve seen people do more drastic things for a tax break:
If you are an expecting mother and have a scheduled caesarian delivery planned for the first two weeks of January, ask your doctor if moving the delivery into 2013 is a possibility. You have 18 years of living expenses to pay before you send junior to college. You might as well get the medical deduction this year, as well as an extra year of the child tax credit and the $3,900 dependent exemption for 2013.

Tax Tip #6: Pull charitable contributions forward

If you give regular sums of money to a church or charity, consider making any contributions you originally planned for the first quarter of next year to December. Or, if you don’t regularly give to charity, this might be a good time to start.
Cash contributions are the easiest and most likely to survive an audit. But the IRS is actually pretty generous when it comes to donating things like old cars or old clothes. For low-hanging fruit, spend a Saturday cleaning out your closet. Chances are good you can generate a couple hundred dollars in tax breaks by donating clothes that you’re no longer wearing. Just make sure you keep good records about the items donated, the condition they were in, and the date you donated them. If you want to be meticulous about it, take photos of the items with your camera phone and file them away with your tax materials for the year.
Reaching an estimated value can be tricky if you’re trying to do it on your own, but popular tax programs like TurboTax and TaxAct will walk you through the process and help you assign proper values.

Tax Tip #7: Get creative with your monthly bills

No one ever complains about getting paid too early, and your creditors are no exception. If you mortgage payment falls near the first of the month, make your January payment a week early this year.
You have to be careful that your mortgage lender understands that you are making the January payment and not simply making an unscheduled principal reduction. There is nothing wrong with reducing your principal early, of course, and I recommend that you do exactly that if your cash flow allows. But for the purposes of minimizing tax, you’re specifically looking to get another month’s worth of interest on the books.
The same goes for health insurance premiums if you pay your own. If your regular payment date falls in early January, pay it early.
If you own your own business or utilize a home office, you have a lot more leeway here. You can pay your electric, phone and Internet bills a couple weeks early. And you can buy basic office supplies or equipment a little earlier than planned.
Will any of these prepayments make a huge dent in your tax bill? No, probably not. But every dollar not spent paying taxes is a dollar available to be spent on something else in 2014.
Posted on 7:45 AM | Categories:

TurboTax ItsDeductible Goes Mobile / Turns Charitable Contributions Into Tax Savings From the Palm of Your Hand = The TurboTax ItsDeductible app is free and now available on the App Store for iPhone with iOS7.

 Tis the season for giving back. To help the estimated 75 percent of Americans who give to charity turn their generosity into big tax deductions, Intuit Inc. INTU +0.05% today announced the availability of the new TurboTax ItsDeductible mobile app for iPhone.
The TurboTax ItsDeductible app is free and now available on the App Store for iPhone with iOS7.
Combining the popular ItsDeductible Online program with the convenience and portability of mobile devices, the TurboTax ItsDeductible app helps people easily track their charitable contributions anywhere, anytime. TurboTax ItsDeductible includes valuations for more than 10,000 commonly donated goods such as clothing, toys, games, sporting goods, household items, appliances and more.
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Posted on 7:45 AM | Categories:

Should I Use Quickbooks?

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Old Yesterday, 04:52 PM
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Default Should I Use Quickbooks?


I started a small freelance consulting company and currently I just use excel to track expenses and make invoices in word.

I saw quickbooks is on sale today for 40% off. Will quickbooks make my life easier or is it horrible bloatware made by the devil? What are your opinions on accounting and accounting software for small businesses?


Last edited by allisolm; Yesterday at 07:53 PM. Reason: moved from OT.
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Old Yesterday, 05:04 PM
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It's sufficient for small businesses. It's not incredibly robust, but I've managed to make things work the way I want through some tinkering.

I don't know how it measures up against equivalent software though, QB is the only one I've worked with of its kind.
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Old Yesterday, 05:04 PM
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I guess small depends on how small and do you want to pay QB for updates? How many I9s/W-2s?

I'm cheap. Running the daycare with 1 excel for income/expenses using a macro to print checks. 1 excel for payroll, calculating gross, net, fica...I do have to log into the fed/state to pay the tax monthly but it's 10 min. The daycare does have a separate program to track kids, allergies, immunizations, personal info...

And I'm too lazy to learn a new software unless I have to.
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Old Yesterday, 05:09 PM
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There is a free version of quickbooks for small businesses ...
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Old Yesterday, 05:14 PM
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Stay with the way you're doing it. When you grow big enough to need QB you will know. At that time you can decide if you want to do your bookkeeping yourself or farm it out to a CPA.

When I had my business, I had no choice but to "farm out" QB tasks to my bride as I could not put in 10 to 14 hour days and do QB too. Big mistake. She is not a "detail person" and while it was not a mess (per our CPA) I never explained to him what I had to go through to get a file that I was not embarrassed to send to him. With no accounting background whatsoever, I found QB to be pretty much overwhelming.

Anyway, couldn't resist throwing in the personal story, but the first paragraph sums up my contribution.
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Old Yesterday, 05:24 PM
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First, it would be quite helpful if you would explain what you hope to accomplish by switching to an accounting software program like quickbooks. What do you want it to do that you presently don't have?

I'm a CPA. I started accounting before PC/software was available. We did it on manual spreadsheets. I'm a little biased against these programs unless they're necessary and the non-accountant has at least some training.

IMO, if your business can be comfortable done on an excel spreadsheet - just stick with that until your business grows to the point where software is actually helpful.

IMO (or experience) the most important aspects of accounting for a small business are (1) doing the accounting timely (don't let huge piles of bills/invoices/payments etc build up before sitting down to put the data in the spreadsheet/acct app) and (2) maintaining a good filing system for your records that you are required to keep.

A few things:

1. Like most software, accounting programs can be 'powerful tools'. I.e., it's easy to do a bunch of 'good stuff' quickly, also easy to screw things up royally quickly.

2. If you don't have some type of accounting training yet (e.g., which accounts belong on a Profit Statement versus which ones belong on a Balance Sheet) you may need to take a class or otherwise become familiar with these things.

3. If you're good with #2 above you may still wish to take a QB class at your local community college. Knowing accounting and knowing the QB program are not the same exact thing.

4. I'm pretty sure you can try QB for a free trial period. If so, you can check it out at no cost and see what you think.

Fern
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Old Yesterday, 05:35 PM
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I hate QB. Use Freshbooks instead. Integrates with a lot of other stuff and everything resides on the cloud and it also has a phone app for checking invoices, sending them, etc. Also takes credit card payments.
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Old Yesterday, 06:00 PM
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i love workingpoint.com
it does everything I need, simple and online.
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Old Yesterday, 08:10 PM
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I have some accounting training and used quickbooks for my small business. At the time there was a free version called Simple Start that I used only to track expenses and revenues, keep a customer list and generate invoices.

Intuit being Intuit would fuck with the software every year. I didn't expect much for free but they would randomly make files incompatible, change or remove features, anything to get money from me until they got rid of the free version completely. I would have been OK I think if I never allowed any updates. I imagine the pay versions are also a yearly subscription or cloud BS type thing now, I don't know.

In the end it was nothing but a big hassle and I would have been better served using excel until the need for specific software became obvious.


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Old Yesterday, 08:31 PM
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You could try GnuCash. I don't have personal experience, and consensus seems to think it's not as good as QuickBooks, but at least they don't play games with forced obsolescence. I wouldn't use QuickBooks for that reason alone. I'd use a pencil and paper before I gave a company like that my money.

http://www.gnucash.org/
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Old Yesterday, 09:34 PM
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also take a look around the MANY free alternatives.

Tried Gnucash but it seemed too danged complicated for a non-accounting person who just wants to get 'er done.

We use Quickbooks but in parallel are experimentally also using this free web-based on out of Canada, so far so good. It's R E A L L Y easy once you get the hang of it: WAVE

Also see if your website host provides a free accounting package as part of your overall service.

If you end up using Quickbooks that's good too, and it will probably dovetail nicely with your banks.
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Old Yesterday, 09:46 PM
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I use QB right now, primarily for invoicing, and being able to email invoices right from the software... it is very, very good for that. I do NOT use QB for my bookkeeping... I use Excel spreadsheets for that. I tried to use it in QB, it became the tail wagging the dog.

I will admit I hate (understanding that 'hate' is a very powerful word...) HATE QB. About every 3 years they cut support to that older version and then take away things like... emailing invoices through QB. It would be like Microsoft disabling IE after 3 years unless you upgrade to W15 (or whatever,) and you know QB ain't cheap.

I have investigated GnuCash, but it seems more like accounting software, which I don't need. I have looked at WAVE, too, but couldn't make heads or tails out of it... unable to decide if it can do what I want it to do.

I kick out about 100 invoices a month and manage about 800-900 separate parts and services, it does it very well... but I'm almost 2 years into QB'12, I'll have to come up with something before the Evil Empire comes around again to extort more money from me.
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Posted on 7:45 AM | Categories: