Wednesday, February 19, 2014

InsightSquared Unveils a Breakthrough Analytics Solution for QuickBooks Continues Innovation in Analytics and Reporting with Easy-to-Use

InsightSquared, the award-winning provider of Business Analytics software for small and midsize companies, today launched a ground-breaking QuickBooks analytics and reporting SaaS product. CEOs and other business users now have the ability to glean sales, profit and loss and financial insights on their businesses from QuickBooks anywhere, in real-time and easier than ever before.
InsightSquared delivers the first-ever QuickBooks analytics solution that offers:
  • Access Anywhere: Insights from anywhere and at any time, no longer just on the accountant's computer
  • Easy-to-Use: Get instant insights that answer tough business questions
  • Unified View: See data from multiple sources in one unified view; automatically associates across sources including QuickBooks and Salesforce
CEOs and every-day decision-makers no longer have to wait for accountants to run the numbers or export data to Excel; analytical insights are just a mouse-click away. InsightSquared offers real-time insights on business and financial data, allowing for better, faster, data-driven decisions.
InsightSquared's game-changing product offers visual charts and supporting data tables, giving users the ability to drill down, pivot and get the story behind the numbers. The unique reports can forecast cash flow, identify customers who are at risk of churn, see which customers are least likely to pay before the months end and more. 
Paul Nadjarian, Founder and CEO of Mojo Motors:
"InsightSquared's Finance Reports are like a daily check-in to see what is happening within the company.  I like to look at the trending charts and also drill down into the current and previous months.  With InsightSquared, the reports and graphs are readily available, and because I am able to look at them daily, I do." 
Rolf Kramer, President of Kranect:
"I love using the InsightSquared integration with QuickBooks because now I can look at all my activity data and financial data in one place, all using the same awesome user interface that InsightSquared is known for.  I'm a huge fan!"
Serf Mendonca, IT Manager at Clarity Consultants:
"The QuickBooks product has helped us improve our revenue projections. It's allowed us to quickly compare our projections to actuals and fine tune them. Overall, this product has given management new and visually appealing ways to analyze critical financial data."
Fred Shilmover, CEO of InsightSquared:
"Our new QuickBooks product is an innovation that gives a competitive advantage to data-driven business users.  We've empowered small and mid-size businesses to make the right decisions in ways never before thought possible."
About InsightSquared  InsightSquared is the innovative leader in Business Analytics and modern business intelligence for sales and marketing. Unlike legacy Business Intelligenceplatforms, InsightSquared can be deployed affordably in less than a day without any integration costs and comes preloaded with reports that real business people can use. Hundreds of companies and thousands of users around the world use InsightSquared's award-winning analytics to maximize sales performance, increase team productivity and close more deals. Based in Cambridge, Mass., InsightSquared was recently named one of the "Best Places to Work in Massachusetts" by the Boston Business Journal and "Top Places to Work 2013" by The Boston Globe.  InsightSquared is also a winner of the "2014 Product Innovation Award" from the Business Intelligence Group.  For more information, visit www.insightsquared.com.
Connect with InsightSquared:
Posted on 11:22 AM | Categories:

FINSYNC launches new accounting software / combines financial management and accounting software services with built-in business intelligence to create a virtual CFO for small business owners.

FINSYNC, Inc., a new software service, over two years in the making, is now inviting new business members to sign up. FINSYNC was engineered from the ground up to empower small business owners with the ability to take control of their business like never before. Built-in services include applications for invoicing, inventory management, bill pay, and payroll processing. With these services connected and in sync, bookkeeping happens automatically as sales and other financial transactions occur.
"Effectively run businesses need the right information at the right time and quick access to cash and credit," saidTucker Mathis, FINSYNC, CEO. "In 2011 we saw many businesses struggling to obtain timely financial results and metrics resulting in problems costing time and money. There were opportunity costs involved as well; banks weren't lending to businesses with untimely and inadequate financial statements."
"The problem wasn't a shortage of options for accounting software; the problem was accounting software wasn't designed for a business owner / CEO. Accounting software, as we knew it, was an amalgamation of different parts that didn't communicate easily with one another. This often pushed the typical CEO to outsource data entry and bookkeeping. When it came time to make a decision about new inventory, increasing a customer's line of credit, hiring new employees, or borrowing money, the CEO became dependent on third party reports, which rarely came on time and with meaningful metrics and forecasts."
FINSYNC delivers a holistic view of real-time financial results and uses built-in business intelligence to drive actionable insights that help CEOs make better, more timely and more profitable business decisions. FINSYNC is fully integrated for an alternative to traditional business accounting software services made up of disparate silos. To learn more, please visit www.finsync.com.



FINSYNC combines financial management and accounting software services with built-in business intelligence so individuals and businesses can more efficiently manage cash flow and have help making better, more informed financial decisions. FINSYNC is fully integrated for an alternative to traditional personal financial management and business accounting software services made up of disparate silos.
Posted on 10:19 AM | Categories:

Tax Essentials: Above-the-Line Deductions

Robert D Flace for Mainstreet.com writes:  In my "Tax Tip "These Are the Most Important Numbers on Your Tax Return," I introduced you to "above the line" deductions, aka "Adjustments to Income," which reduce your Adjusted Gross Income. Let's take a look at some of these deductions.

EDUCATOR EXPENSES:
Teachers, counselors, principals and aides of students in kindergarten through 12th grade, who have worked at least 900 hours during the school year, can deduct up to $250 of unreimbursed out-of-pocket expenses for books, supplies, computer software, equipment, and other classroom materials. If both husband and wife are qualified educators, they each get up to $250. Educators who spend more than $250, as most do, can deduct the excess as an "Employee Business Expense" on Schedule A if their total miscellaneous deductions exceed 2% of Adjusted Gross Income (AGI).
This deduction has been extended through 2013 only, and expired on December 31, 2013. Congress has not yet extended it for 2014 and beyond.
TUITION AND FEES:
Most undergraduate college students get the best tax benefit by claiming the American Opportunity Credit. Graduate students can claim either a Lifetime Learning Credit or the special Tuition and Fees Deduction.
Joint filers with an AGI of $130,000 or less, and single filers with AGI of $65,000 or less, can deduct up to $4,000 in qualifying expenses for tuition and fees and required books, supplies and equipment. The deduction is limited to $2,000 for married couples with an AGI of between $130,001 and $160,000 and singles with AGI between 65,001 and $80,000.  This deduction also expired on December 31, 2013 and has not yet been extended it for 2014 and beyond.
MOVING EXPENSES:
Did you move because of a new job or a new job location? You can deduct the out of pocket costs of moving your household goods (including your pet) to your new location and travel expenses (including overnight lodging, but not meals) while on the road for one trip for yourself and each member of your household. You can claim a standard mileage allowance of 24 cents per mile if you drive. If you and your spouse each have a car, and you each drive your car to your new location, you can both claim the mileage allowance for the trip. You can also deduct storage and insurance of your household goods for up to 30 days after leaving your former residence if you move within the U.S.
You must meet a distance test and a time test. The distance between your new job and former residence must be at least 50 miles more than the distance between your old job and former residence. If you are an employee you must work full-time at your new location for at least 39 weeks in the 12 months following the move. If you are self-employed you must meet the same test, and also work full-time for a total of at least 78 weeks during 24 months following the move. Any combination of full-time employment and self-employment will satisfy this test.
If you are married, only one spouse must satisfy the time test.
ALIMONY:
You can deduct alimony paid to a former spouse under a divorce decree. To be deductible the payments must be in cash (or check) and required as a condition of the divorce agreement. You and your "ex" must not live together in the same household, and payments must end upon the death of the "ex".
The deduction is not limited to support payments. You can also claim any payments required under the terms of the agreement that you make to a third party on behalf of your former spouse. This includes payments for medical expenses, health insurance premiums, housing costs, taxes, tuition, and life insurance premiums (if the former spouse owns the policy).
The above rules also apply to separate maintenance payments made under a separation agreement. Child support is not deductible.
STUDENT LOAN INTEREST:
You can claim up to $2,500 in interest paid on qualified student loans used to pay for post-secondary education - college or vocational school - for yourself, your spouse, or a dependent.
In order to claim a deduction you must be legally obligated to repay the loan and you must actually make the payments. If the student and the parents are both legally obligated to repay the loan, for example a parent has co-signed the loan, the deduction is claimed by whoever actually makes the payments.
If you are claimed as a dependent on your parents', or anyone else's, tax return you cannot deduct student loan interest on your return.
The amount you can deduct is phased out as your "modified" Adjusted Gross Income (MAGI) goes from $60,000 to $75,000 if you are single, or from $125,000 to $155,000 on a joint return. You cannot claim the deduction if you are married filing separately.
Interest on a loan from a related party or from a qualified employer plan, such as a 401(k), are not deductible.
LEGAL FEES:
Generally if you receive a legal judgment or settlement that does not relate to actions involving physical injuries you must report the entire amount in gross income on Line 21 of your Form 1040 and deduct related contingent legal fees and expenses as a Miscellaneous Expense on Schedule A, subject to the 2% of AGI exclusion.
But legal fees and expenses related to taxable awards, judgments and settlements from unlawful discrimination lawsuits can be deducted in full as an Adjustment to Income. This also applies to legal fees relating to IRS whistle-blower awards and monies received from certain claims against the federal government and private causes of action under the Medicare Secondary Payer law.
There is no separate line on the Form 1040 for this deduction. You add the amount of legal fees and expenses in the amount reported on Line 36 and enter the code UDC if related to unlawful discrimination or WBF if related to IRS whistle-blower awards on the dotted line to the left of the amount.
Posted on 10:19 AM | Categories:

Estate planning with a non-citizen spouse / How those married to foreign nationals can avoid the estate tax

Bill Bischoff for Marketwatch writes: These days, it is not uncommon for U.S. citizens who live in this country to be married to non-citizen spouses who also live here. Or two non-citizens may get married while living here. In tax lingo, non-citizens who are permanent U.S. residents are termed resident aliens. Unfortunately, standard estate tax planning advice that works for most married couples will not necessarily work when one or both spouses are resident aliens. Here’s what you need to know if this is your situation.
Federal estate tax basics
In general, American citizens and resident aliens alike are covered by the same set of federal estate tax rules. If you die in 2014 with a taxable estate worth over $5.34 million, the IRS wants 40% of the excess.
Thankfully, the federal estate tax can often be minimized or avoided with advance planning. The most common drill is to bequeath (give away at death) some of your assets to your children and grandchildren (either directly or via trust arrangements) while bequeathing the remainder to your surviving spouse.
For example, say you are a married American citizen or a resident alien with an estate worth $7 million. You can completely avoid the federal estate tax by bequeathing $5.34 million to your children and bequeathing the remaining $1.66 million to your surviving spouse—as long as your spouse is a U.S. citizen. In fact, you can bequeath an unlimited amount to your spouse federal-estate-tax-free if he or she is a citizen.
Alternatively, you can gift away an unlimited amount to your spouse before you die—provided he or she is a U.S. citizen—without any federal gift tax bill.
This privilege of being able to make these unlimited tax-free wealth transfers to your spouse is called the unlimited marital deduction. Taking advantage of this privilege is the key element of most estate and gift tax planning strategies.
The potential problem with a non-citizen spouse
Unfortunately when your spouse is not a U.S. citizen, the unlimited marital deduction privilege is unavailable. That is true regardless of whether or not you yourself are an American citizen. Going back to the preceding example, let’s say that you pass away this year and bequeath $5.34 million to your children and the remaining $1.66 million to your non-citizen spouse. The amount going to your kids is federal-estate-tax-free thanks to your $5.34 million federal estate tax exemption. But there’s no shelter for the amount going to your non-citizen spouse. So the federal estate tax hit is $664,000 (40% x $1.66 million). Ouch! If you bequeath your entire $7 million estate to your non-citizen spouse, the federal estate tax bill is the same $664,000, because the first $5.34 million is sheltered by your federal estate tax exemption while the remaining $1.66 million is unsheltered and taxed at 40%. Ouch again! This is bad news if you’ve been (wrongly) assuming that you qualify for the unlimited marital deduction privilege.
What to do
There are several ways to get around the non-citizen spouse estate-tax dilemma. Here are some tax-saving moves to consider.
First, you can make sure you marry an American citizen. This is a potential solution if you are currently single, but obviously not very practical if you are already married to a non-citizen.
Second, your spouse can become a citizen. That can take place after you’ve died but by no later than the due date for filing the federal estate tax return for your estate (the deadline is generally nine months after your death). As long as your spouse attains citizen status before the deadline, the unlimited marital deduction deal is available, which means your spouse can be left an unlimited amount free of any federal estate tax hit. However, your spouse may not want to become a U.S. citizen for various reasons. For example becoming an American citizen might require renouncing one’s home country citizenship, which could affect the right to own property in that country.
Another idea is to gradually reduce your taxable estate by making substantial gifts to your non-citizen spouse while you are still alive. Such gifts are eligible for a larger-than-normal annual exclusion. For example, the exclusion for 2014 is $145,000 (compared with the standard $14,000 exclusion for 2014 gifts to other folks). By taking advantage of the larger-than-normal annual exclusion, you can gradually transfer wealth to your non-citizen spouse without incurring any federal gift tax and at the same time whittle your taxable estate down to the point where it will be sheltered by your federal estate tax exclusion ($5.34 million for 2014).
A fourth potential solution involves setting up a qualified domestic trust (QDOT). The QDOT can be formed under the terms of your will, by the executor of your estate after you have passed on, or by your surviving spouse. Basically the assets inherited by your spouse go into the QDOT. Then the federal estate tax on the value of those assets is deferred until your spouse takes money out of the QDOT or dies. At that point, the QDOT assets are added back to your estate for tax purposes, and the deferred federal estate tax bill comes due. In other words, the QDOT arrangement only defers the federal estate tax hit. It doesn't reduce the amount that ultimately must be paid to the U.S. Treasury. However, if your surviving spouse becomes a citizen, he or she can then take all the assets in the QDOT, and the deferred tax bill will go up in smoke. In effect, your spouse is treated as if he or she had been a citizen all along.
The bottom line
The non-citizen spouse estate tax threat can potentially affect many well-off couples. Thankfully, the threat can often be mostly or completely disarmed with advance planning. You may need assistance from an experienced estate planning pro to get the job done right. 
Posted on 10:19 AM | Categories:

Preparing for Tax Season- What’s new, what’s changed and what’s been extended for 2013

 Tanina Frouge Linden, CFP® for Nerd Wallet writes: The American Taxpayer Relief Act (“ATRA”) was the fiscal cliff deal legislation passed in the wee hours of January 1, 2013. It is making itself felt by taxpayers as they prepare to file their 2013 taxes. The legislation extended many provisions of the tax code that were set to expire at the end of 2012. It also added some new rates for income and dividends and new surcharges on investment income. It also brought back less-than-popular phase-outs on itemized deductions and personal exemptions that will affect some taxpayers.
How will the new rules affect you and what you owe Uncle Sam?
Rates on Ordinary Income
For most individuals, the federal income tax rates for 2013 will be the same as last year: 10%, 15%, 25%, 28%, 33% and 35%. The top tax rate will increase to 39.6% for singles with taxable income above $400,000, married filing jointly couples with income above $450,000, those filing “head of household” with income above $425,000 and married individuals who file separately with income above $225,000. Tax brackets are based upon taxable income after all deductions, not on adjusted gross income (AGI).
Long-Term Gains and Dividends
Taxes on capital gains and qualified dividends for most investors will also remain the same – 15%.  Qualified dividend treatment, which was due to expire in 2012, was also made permanent.  However, like the tax rates on ordinary income, the maximum rate on capital gains and dividends will increase to 20% for the top tax bracket (the new 39.6% bracket with the $400,000/$450,000/$425,000 thresholds noted above).
In addition, to foot the bill for Obamacare, those making more than $250,000/$200,000 will also pay an additional 3.8% Medicare surtax on investment income, including both dividends and capital gains.  For individual taxpayers, the surtax is based on the lesser of (1) net investment income, or (2) the amount by which modified adjusted gross income (MAGI) exceeds the threshold amount.
For these higher earners, the result is a 23.8% federal tax rate on long-term gains and dividends.  However, immense as that may sound, many experts think that these investors dodged a major bullet.  If a fiscal cliff deal had not been reached, dividends were slated to be taxed at ordinary income rates, resulting in a top rate of more than 43%, including the health care surcharge.
The Pease limitation and Personal Exemption Phase-out (PEP) – They’re Baaaaack!
Are you impacted? The answer is “maybe”. The Pease Limitation, the phase-out of itemized deductions, returned for 2013. It reduces total itemized deductions by 3% of excess income over a certain AGI threshold. Taxpayers who will be affected are those with adjusted gross incomes of $250,000 for individuals, $300,000 for married couples and $275,000 for those filing head of household.
The personal exemption phase-out (PEP), which impacts the much beloved personal exemption, also has returned.  Most taxpayers are entitled to claim a personal exemption for themselves and any dependents they support, thereby reducing their taxable income and the taxes they pay.   The personal exemption amount is indexed annually for inflation and is $3,900 for 2013.  The PEP, however, reduces personal exemptions by 2% of the total exemption amount for each $2,500 of income over the AGI thresholds mentioned above.  These amounts are also indexed for inflation.
The net impact of the PEP and Pease limitations is that each “rule” increases an individual’s marginal tax rate by about 1%. However, the reduction cannot exceed 80% of the total affected deductions.
Home Office Deduction Simplified
The IRS has changed the requirements on the home office deduction for the 2013 tax year. Under the new rule, taxpayers have the option to take a “standard” home office deduction of $5 for every square foot of office space up to 300 square feet as opposed to the old way of trying to figure out what percentage of your home was used as home office space.
Forgiven Principal Residence Mortgage Debt
For federal income tax purposes, a forgiven debt generally is considered taxable income. In 2007, in response to the mortgage crisis, Congress exempted up to $2 million per couple of COD (cancellation of debt) income from mortgage debt on a principal residence.  From 2007 through 2012, this COD was treated as tax-free.  This generous exemption was extended through 2013.
State and Local Sales Tax Deduction
ATRA also restores the option of claiming an itemized deduction for state and local sales taxes instead of state income taxes on your Schedule A.  Like many other deductions, it expired at the end of 2011 but has been extended through 2013.
K-12 Educators’ Expenses
The $250 deduction for school-related expenses paid by teachers and other K-12 educators has been extended through 2013.
Energy-Efficient Home Improvement Credit
The tax credit of up to $500 for certain energy-saving improvements to a principal residence has been extended through 2013.
Higher Education Tuition Deduction Extended
The ability to deduct tuition and fees for higher education has also been extended through 2013.
Gift and Estate Tax Exemptions
For 2013 and beyond, ATRA permanently installed a unified federal estate and gift tax exemption of $5 million (adjusted annually for inflation) and a 40% maximum tax rate (up from 35%).  Exemption portability, the right to leave your unused estate and gift tax exemption to your surviving spouse, was also made permanent.
The gift exemption, known as the annual exclusion, was also indexed for inflation.  It is $14,000 for 2013, up from $13,000 in 2012, and is set to increase in $1,000 increments every few years.  Couples that “gift split” can now give $28,000 per recipient annually.
Before We Go
In summary, the tax picture for 2013 returns is not too drastically different for many people. Next year looks to have all the increases and less deductions but as the tax landscape is constantly changing, 2014 is still anyone’s guess.
The deadline to file individual tax returns for the year 2013 or to request an automatic extension (Form 4868) is Tuesday, April 15, 2014.  State tax deadlines vary, so check with your state’s Department of Taxation for that information.
At this time of year, we hope that you have found this paper to be helpful but it should not be construed or interpreted to be advice for your specific tax situation.  Please check with your tax advisor or accountant to ensure any advice works for your particular circumstances.
Posted on 10:18 AM | Categories:

Tax Savings for Young People / By keeping track of moving expenses, using a Roth IRA to save for your first home and timing your wedding, you can save come tax time.

Editors of Kiplinger's Personal Finance magazine / DailyFinance writes:   Young taxpayers should plan these moves throughout the year to reduce their taxable income and earn more tax deductions. Here are the areas where you should look for tax savings:

AT WORK

Give yourself a raise. If you got a big tax refund this year, it meant that you're having too much tax taken out of your paycheck every payday. Filing a new W-4 form with your employer (talk to your payroll office) will insure that you get more of your money when you earn it. If you're just average, you deserve about $225 a month extra. Try our easy withholding calculator now to see if you deserve more allowances.

Switch to a Roth 401(k). If your employer offers the new breed of 401(k), seriously consider opting for it. Unlike the regular 401(k), you don't get a tax break when your money goes into a Roth, but younger workers are often in lower tax brackets ... so the break isn't so impressive anyway. Also unlike a regular 401(k), money coming out of a Roth 401(k) in retirement will be tax-free ... at a time you may well be in a higher bracket).

Be smart if you're a teacher or aide. Keep receipts for what you spend out of pocket for books, supplies and other classroom materials. You can deduct up to $250 of such out-of-pocket expenses -- even if you don't itemize.

Tally job-hunting expenses. If you count yourself among the millions of Americans who are unemployed, make sure you keep track of your job-hunting costs. As long as you're looking for a new position in the same line of work (your first job doesn't qualify), you can deduct job-hunting costs including travel expenses such as the cost of food, lodging and transportation, if your search takes you away from home overnight. Such costs are miscellaneous expenses, deductible to the extent all such costs exceed 2 percent of your adjusted gross income.

Keep track of the cost of moving to a new job. If the new job is at least 50 miles farther from your old home than your old job was, you can deduct the cost of the move ... even if you don't itemize expenses. If it's your first job, the mileage test is met if the new job is at least 50 miles away from your old home. You can deduct the cost of moving yourself and your belongings. If you drive your own car, you can deduct 24 cents per mile for a 2013 move, plus parking and tolls.

Go for a health tax break. Be aggressive if your employer offers a medical reimbursement account -- sometimes called a flex plan. These plans let you divert part of your salary to an account which you can then tap to pay medical bills. The advantage? You avoid both income and Social Security tax on the money, and that can save you 20 percent to 35 percent or more compared with spending after-tax money. The maximum you can contribute to a health care flex plan is $2,500.

AT HOME

Use a Roth IRA to save for your first home. A Roth IRA can be a powerful tool when you're saving for your first home. All contributions can come out of a Roth at any time, tax- and penalty-free. And, after the account has been opened for five years, up to $10,000 of earnings can be withdrawn tax- and penalty-free for the purchase of your first home. Say $5,000 goes into a Roth each year for five years for a total contribution of $25,000. Assuming the account earns an average of 8 percent a year, at the end of five years, the Roth would hold about $31,680 - all of which could be withdrawn tax- and penalty-free for a down payment.

FAMILY PLANNING

Deduct interest paid by Mom and Dad. Until recently, parents had a good reason not to help their children pay off student loans. If the parents were not liable for the debt, then no one got to deduct the interest. Now, however, when parents pay, it's treated as if they gave the money to the real debtor, who then paid off the loan. The child gets the tax deduction, as long as the parents can't claim him or her as a dependent, even if he or she doesn't itemize.

Time your wedding. If you're planning a wedding near year-end, put the romance aside for a moment to consider the tax consequences. The tax law still includes a "marriage penalty" that forces some pairs to pay more combined tax as a married couple than as singles. For others, tying the knot saves on taxes. Consider whether Uncle Sam would prefer a December or January ceremony. And, whether you have one job between you or two or more, revise withholding at work to reflect the tax bill you'll owe as a couple.

INHERITANCE

Roll over an inherited 401(k). A recent change in the rules allows a beneficiary of a 401(k) plan to roll over the account into an IRA and stretch payouts (and the tax bill on them) over his or her lifetime. This can be a tremendous advantage over the old rules that generally required such accounts be cashed out, and all taxes paid, within five years. To qualify for this break, you must name a person or persons (not your estate) as your beneficiary. If your 401(k) goes through your estate, the old five-year rule applies.

RETIREMENT SAVINGS

Make your IRA contributions sooner rather than later. The sooner your money is in the account, the sooner it begins to earn tax-deferred or, if you use a Roth IRA, tax-free returns. Over a long career, this can make an enormous difference.

Grab a 50 percent credit for saving. One of the most generous tax credits available effectively rebates up to 50 percent of what low-income workers sock away for retirement. If your income is below $25,000 on a single return or $50,000 on a joint return, you can get a credit of between 10 percent and 50 percent of up to $2,000 you stash in an IRA or company retirement plan.

Deduct expenses even if you don't itemize. Taxpayers who claim the standard deduction often complain that itemizers get the better deal. But that's not true. The only reason to claim the no-questions-asked standard deduction is if it's bigger than the total of all the costs you could deduct if you itemized. And, you can deduct a lot of things even if you don't itemize, including student loan interest, certain expenses for reservists and performing artists, contributions to health savings accounts and contributions to IRAs.

 You can visit Kiplinger here.
Posted on 10:18 AM | Categories:

Important Reminders about Tip Income

If you get tips on the job from customers, the IRS has a few important reminders:
  • Tips are taxable.  You must pay federal income tax on any tips you receive. The value of non-cash tips, such as tickets, passes or other items of value are also subject to income tax.
  • Include all tips on your return.  You must include the total of all tips you received during the year on your income tax return. This includes tips directly from customers, tips added to credit cards and your share of tips received under a tip-splitting agreement with other employees.
  • Report tips to your employer.  If you receive $20 or more in tips in any one month, from any one job, you must report your tips for that month to your employer. The report should only include cash, check, debit and credit card tips you receive. Your employer is required to withhold federal income, Social Security and Medicare taxes on the reported tips. Do not report the value of any noncash tips to your employer. 
  • Keep a daily log of tips.  Use Publication 1244, Employee's Daily Record of Tips and Report to Employer, to record your tips.
For more information, see Publication 1244 or Publication 531, Reporting Tip Income. You can get them on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Additional IRS Resources:
Posted on 10:18 AM | Categories:

10 Tax Solutions for Small Businesses

Sara Angeles for BusinessNewsDaily writes: Small business owners shouldn't have to do their taxes on their own. Tax solutions provide a do-it-yourself way to easily prepare and file taxes — without all the guesswork. If you don't have an accountant, or tax services are way out of your budget, there are several tax apps, software and other tools specifically created with small business tax needs in mind. Here are 10 tax solutions to get you started.

1. TaxJar

TaxJar aims to make e-commerce sales taxes easy for businessesthat sell online and collect sales tax from customers everywhere. It offers automated sales tax reporting, taking the hassle out of breaking down sales taxes by jurisdiction. It also shows  if you've been collecting the right amount of taxes by comparing the amounts you should have collected versus those in your books. TaxJar can also pull up data from multiple e-commerce channels like Amazon, Shopify, Etsy, Bigcommerce, eBay and PayPal, so you have all the information you need come tax time. Other features include state-based data for business that need to file in multiple states and transaction histories to stay compliant in the event of an audit. TaxJar plans start at $9.95 a month for up to 1,000 transactions a month.   

2. TaxMate

TaxMate is a free mobile app that provides quick, quarterly estimates to avoid surprises during tax season. Users type in their state, filing status, number of dependents, income, expenses and payments made. The app automatically calculates federal and state taxes, giving users instant, real-time estimates. TaxMate is ready to use straight from any smartphone's browser — no signups or downloads required. [Accounting Solutions for Small Businesses]

3. GoDaddy Bookkeeping

GoDaddy Bookkeeping, formerly Outright, integrates your books with tax preparation. This Web-based bookkeeping tool automatically organizes sales and expense data into IRS categories, then fills out a worksheet you can use for your Schedule C. Other features include quarterly estimated and annual tax calculations, tax deadline alerts, data backup and more. A free account with automatic IRS categorization is available; a $9.99 a month paid account is required for full access to other tax features.

4. Snap Payroll

Snap Payroll makes it easy to keep up with payroll tax regulations. This free iOS app is automatically updated with the latest tax changes, eliminating the headaches of figuring out deductions on your own. Simply enter the hours worked and pay rate and the app calculates pay amounts and how much to withhold. Users can also save employee and payroll data, which includes paycheck histories with payee names, dates and paycheck amounts.

5. Payroll Tax Service by Wave

Payroll Tax Service by cloud-based accounting software Wave is a payroll- and tax- filing platform made for small businesses. In addition to payroll services, Wave also helps smallbusiness owners stay compliant with tax regulations. Wave also takes the worry out of when or how to file by automatically paying and filing federal and state payroll taxes. The service will also notify you before taking any action and will withdraw funds only when taxes are due. Payroll Tax Service by Wave starts at $25 a month, plus $4 a month per employee for the first 10 employees and $1 per employee thereafter.

6. TurboTax Home & Business

Turbo Tax Home & Business is an all-in-one solution that helps self-employed individuals and sole proprietors file their taxes with the most deductions possible. This online software both tells small business owners which expenses are tax-deductible and walks them through industry-specific tax write-offs that are often overlooked. It also takes into account vehicle tax deductions and simplifies asset depreciation to help determine which calculation methods are best for the highest deductions. A wide range of additional tax features are also available. TurboTax Home & Business costs $74.99 for federal and $36.99 for state. Free E-file is included in both packages.

7. H&R Block Premium & Business

H&R Block Premium & Business is a tax software made for small business owners. It guides users in preparing and filing partnership and LLC returns (Form 1065), as well as produces payroll forms for the IRS (Forms 940 and 941) and employer forms for employees (Forms W-2 and 1099). The software also lets businesses maximize tax benefits from business expenses, vehicle deductions and equipment and asset depreciation. Included are free, unlimited state program downloads and business e-file, federal and state forms. H&R Block also guarantees 100 percent accuracy, offers audit support and provides free advice from H&R block tax experts. The software can be downloaded for $79.95.

8. eTax.com

ETax.com is a tax-filing platform that guarantees maximum deductions and offers free tax return storage. It features a step-by-step wizard that helps users complete tax forms, as well as free federal E-filing and free customer support. Although eTax.com is directed more toward individual filers, its $49.95 Premium package includes advanced tax returns for small business Schedule C filers. For an additional $29.95, a review by a certified public accountant is available to check for common mistakes and to ensure all eligible deductions and credits are applied.

9. TaxACT Small Business

TaxAct Small Business is a do-it-yourself, Q&A-based tax preparation and filing software for all types of small businesses, such as sole proprietorships, single- and multimember LLCs and partnerships. It uses simple interview questions combined with a broad list of expenses to gather information, then automatically inputs your data into the correct tax forms and maximizes deductions. The TaxAct Small Business software is free to try over the Web or by download. Filing costs vary based on the type of business and filing — federal, state or both — and includes free phone support and price lock guarantee. 

10. Avalara AvaTax

Avalara AvaTax provides automated sales tax rates and calculations for businesses that have customers in the U.S. and all over the world. Rates are based on hundreds of thousands of taxability rules and precise geolocation in more than 10,000 jurisdictions. Its cloud-based databases are always accurate and up to date based on U.S. Postal Service-approved addresses. This means that wherever your customers are, you'll get the accurate tax rates automatically and easily. AvaTax also lets users generate detailed reports and integrates with a wide range of business apps, such as Salesforce, QuickBooks, Magento, NetSuite and Sage. Contact Avalara for pricing information.
Posted on 10:17 AM | Categories:

401k Money Saving Tips and a Fee Guide You Can Actually Understand

The Krazy Coupon Lady writes: Like many Americans today, I have a 401k fund. It’s neither large nor prosperous, but it’s there. This thought gives me comfort—sometimes. But then other times, I catch myself wondering what, exactly, is the point of a savings fund that seems more active in fee charges than fund deposits. Ten dollars here or twenty dollars there may not seem a lot, but over time those fees cut into the fund’s ability to accrue interest over time. This impact can be so critical—especially for savers at the low end of the savings spectrum (a.k.a., me)—that in 2012, the U.S. Department of Labor issued a set of fee guidelines all 401k plan administrators are now required to follow. Not surprisingly, these guidelines also seem rather more obscure than simplified.

In an article titled, 401(k) Fees Still Widely Misunderstood, Forbes magazine reported on how the guidelines have impacted fund-holders’ knowledge to date. The truth is, people are still quite confused about how much they pay, how much they should be paying and what (if any) say they have about what they pay in 401k plan fees. So I decided to take matters into my own hands and delved in to do some research. As usual, I found more than I bargained for. I hope what I’m learning will help you crack down on 401k fund fees too!

3 types of 401k plan fees

How fees are assessed:
  • Flat fee: As a flat fee assessed at intervals or annually against each participant’s account, which means you’ll pay the same no matter what you save or accrue.
  • Percentage of assets: As a percentage of assets, which typically means you’ll pay more when you save more.

1. Plan Administration Fees
These are the types of fees that are considered “administrative” in nature:
  • Accounting and legal services.
  • Trustee services.
  • Record keeping services.
  • Human resources (fund administrator overhead).
  • Fund management seminars and retirement planning software.
  • Phone and email customer service and support.
  • Access to online investing and real time fund performance and transaction data.
  • Online fund management software.
  • Small employer funds average total fees around 1.46%.
  • Large employer funds average total fees around 1.03%.

2. Investment Fees

These fees are associated with investment activities:
  • Sales charges, loads and commissions on sales.
  • Fund administration fees (this category often overlaps with “Human Resources” in Plan Administration Fees).

  • Investment-related services, including phone and email support, investment advice, investment products education (this category often overlaps with related categories in Plan Administration Fees).

  • Small employer funds average total fees around 1.37%.
  • Large employer funds average total fees around 1.0%.

3. Individual Service Fees

These fees relate to specialized offerings that can change from plan to plan and employer to employer. Here are some typical fees:

  • Fees paid if a plan participant takes a loan against 401k funds.
  • Fees paid if a plan participant changes certain investment decisions.
  • Fees paid for individualized financial planning assistance.

Tips to save on 401k fees


There are a variety of reasons for why your particular 401k plan may charge the specific fees it charges. For instance, certain fund managers may have made a name for themselves, and their administrative fees (salary, basically) are higher than lesser-known fund managers. Also, certain types of assets come with higher investment fees for making an investment or changing your investment decisions. Be sure to consider the following before investing your hard-earned cash.

Ask these questions

Investment experts encourage 401k plan participants to become “fee savvy” by asking these questions. For employer-sponsored 401k plans, the in-house plan administrator should be able to answer each of these questions for you.

  • What is the total annual fee assessed against my account (in flat fee and/or percentage of assets)?

  • What does that total annual fee cover (i.e., what do I get for what I’m paying)?
  • If I keep this plan until my target retirement date, how much—in total—will fees represent of what I’ve saved?

  • Is my fund “actively managed” or “passively managed” (the former usually comes with higher administration fees)?

  • How can I lower my fees by changing my investment strategy (i.e., some funds come with higher fees such as loads or commissions—try to avoid these and any specialized investments with additional fee burdens)?

  • What value am I getting for the additional individual service fees that I’m paying (i.e. does it cost me more to take a loan against my 401k than what I can hope to recoup)?

  • Are administrative and investment fees paid separately or are they bundled into one fee, and can I see a breakdown of all the fees charged to my account, fee by fee with descriptions?

What to shoot for

Kiplinger cites a total fee load of 1% or lower as reasonable for most 401k plans. You also want to be sure that you’re not paying your employer’s portion of the total annual plan fees associated with your 401k account. This is more typically an issue if you work for a smaller employer, who may not be able to pick up the costs of plan administration the way a larger company can.

The goal

Ultimately, your goal in doing all of this research is to determine if you pay less investing through your employer’s plan or by striking out on your own to find an inexpensive, value-rich 401k plan that will safeguard your financial future.

Posted on 10:17 AM | Categories:
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