Sunday, March 2, 2014

Single-Vendor Accountants Losing Their Status With Clients: Intuit Managing Director

Sholto MacPherson for BoxFreeIT writes: Accounting firms that pushed accounting software from one software company were facing a backlash from clients who wanted to choose their own program, said Brad Paterson, Intuit’s managing director and vice president for the Asia Pacific region.
“In most cases in Australia the small business is coming to an accountant saying, I want to use this product. Some are saying what should I use, but most are saying, I have done my research, I have made the decision and want to ratify it. It’s a self-service market today,” Paterson told BoxFreeIT during a recent visit to Australia to promote cloud accounting program QuickBooks Online.
“Accounting firms that only support one product are losing their status with clients” who preferred a brand agnostic or “customer first” approach, Paterson said. Software companies had pressured firms into making sales to maintain a wholesale price and some firms had pressured clients to change software when they weren’t ready, Paterson said.
The situation was unique. Australia was the most competitive market for accounting software among the 100 countries in which Intuit was active, Paterson said. While accountants and bookkeepers in the US tended to recommend accounting software from one company, Australian firms were supporting multiple products.
“That’s where Australia leads the world because in other parts of the world accountants support just one” program, Paterson said.
Accountants and bookkeepers had told Intuit they weren’t keen on selling accounting software and were surprisingly interested in training and certification.
“They told us, ‘we want to be comfortable with your product, and that means being certified. We don’t want to have to sell software and services,’” Paterson said.
“No-one is saying to us, give us a margin incentive better than MYOB or Xero. If they say that to us we walk away from them,” Paterson said.
Intuit had seen a “monumental uptick” in inquiries from businesses and was running two to three webinars a week, Paterson claimed. That Monday 100 people had attended a webinar and received certification in QuickBooks Online, he said.
Intuit had trained 21 bookkeepers to train other bookkeepers and accountants, and planned to have 60 trainers by the end of the year.
“Bookkeepers are building a business out of becoming trainers and educators and teachers. It’s a new revenue stream,” Paterson said. “Together we are helping educate business and that’s why bookkeepers are almost a linchpin to our strategy.
“I believe if we educate the market and we continue to maintain the best product, and we lead with mobile, we don’t need to worry about wholesale price. (The strategy is) paying dividends,” Paterson said.
Sholto Macpherson is a business technology journalist specialising in cloud software. He lives and works in Sydney, Australia.  You can follow him on Twitter Here
Posted on 12:21 PM | Categories:

Rod Drury, CEO Xero on Google, mobile and Apple / Talks with Diginomica (Click To View)

Rod Drury for Xero Blog writes: "Great to catch up with Dennis Howlett in San Francisco this week and chat about tech. We talk about the impact of Google, mobility and what is Apple doing with these rich iPad productivity apps. Dennis’s latest thing is Diginomica.com which is a great read for people that love the technology industry"  (click to view the discussion)

Posted on 8:42 AM | Categories:

Who Can Help You Earn More Profit: A Tax Software or an Accountant? / Tax software vs an Accountant

VIOLA ALLEN for sys-con media writes: Whenever a new task comes up in an organization which is of utmost importance, the responsible authorities end up in a dilemma of whether to accomplish the task by themselves or to recruit a relevant expert who is proficient in the task. Earlier, Certified Public Accountants and other professionals used to manage the accounting and taxation activities, but with the advent of online solutions, there are a number of businesses which are migrating from the traditional mode of tax filing to online filing solutions. Whatever it is, CPAs and tax professionals are very much into the business in spite of regular improvements in the online solutions.


What benefits does a Tax Software yields?
1. Cost
There is no doubt that an online tax filing software package is comparatively cheaper than hiring a personal CPA or Tax filing expert to manage your tax-related operations. There are some websites which offer the tax filing services for free while there are others which charge $10 to $120 for the software package. On the contrary, even if you appoint a Tax expert who is ready to work at low fees, he would also be charging at least $100 from you. Besides this, the most economic CPA would also charge almost double the amount that you invest in an online solution.
2. Speed
Tax software compiles all your documents in a single unit in an hour or so, thus helping you in managing and completing your own tax operations in very less time. On the other hand, even the most trained and experienced CPAs and Tax experts will be able to do the compilation work in several days. After the compilation of documents is complete, they will then be performing the filing task, which might take a week or so.
3. Easy to work
Tax preparation software helps in accomplishing the filing task in almost negligible time with very little efforts. For professionals and small businesses that have limited source of income and make few investments and undergo only a few minor deductions, Tax management via software is the best option as it is almost of negligible use to sit with an accountant to deal with these issues.
What benefits does a Professional Accountant yields?
1. More User-friendly approach
A personal accountant is almost similar to a family doctor. Just as a family doctor with whom you have been associated all these years knows your entire medical history, similarly a personal accountant who has been managing your accounts and taxes since many years, is well aware of your financial condition and your subsequent future plans. Many tax professionals who have been dealing with tax filing all their life, often say that a personal tax expert can extend more suggestions to encourage tax savings as compared to a software-based solution. The amount that you might save from such suggestions of a personal tax expert often exceeds the fee of the taxation specialist. A software will never advice you to save taxes by making investments on the education of your children, however, a personal accountant will extend many such advices to you.
2. More sophisticated software solution
Generally the CPAs and Tax professionals have very sophisticated software to manage tax filing. These software cost around $2000 to $7000, or even more. These software are more authentic and genuine as compared to what is available to people in general. Such advanced software have the capability of easily arranging your details and documents in negligible time in order to fill your forms automatically and correctly. Since the software which the professionals use renders most of the data entry and management tasks automated, the chances of human errors which might occur during tax filing is significantly reduced.
3. Accountants are available to sort your queries throughout the year
Unlike a software-based tax filing solution, an accountant is always available to you all the year round to sort your queries. You can get all your answers not only during the phase of taxation, but also in other months as well.
4. CPA helps in saving time
There are many businessmen who are well-versed with the entire process of tax filling. Numerous big business giants, who manage large business setups, are quite skilled and file the tax themselves. But, isn't it a wastage of time on their part? They can save this time and use it in managing their business. A skilled tax preparer or a CPA is so much accustomed with the system that he hardly takes few hours to complete the entire tax filing procedure whereas other learned men would take many days to complete the same task.
Conclusion
It is solely your thinking to choose between taxation software and a tax professional. If you are familiar with the rules and laws of taxation, you can better understand the gravity of this decision. While you choose between the two solution, keep in mind how complicated your tax operations are. Those whose business setups are small and make small investments can manage their taxes by themselves through personalized software and save a lot, whereas those who have a large business setup need to employ an accountant in order to save taxes.
Posted on 8:40 AM | Categories:

Are Your Pets Tax Deductions? In Most Cases, No, Though There Are Exceptions

Carolyn T Geer for the Wall St Journal writes:  We've been keeping our veterinarian in business lately. First Sammy, our nine-year-old golden retriever, needed surgery. (She's fine now.) Then Inky, our curious cat, burned his paw. (He'll be fine, too.)
At our last visit, as we were writing our fourth (or was it the fifth?) consecutive check to the veterinary hospital, there was much joking about how vet bills should be tax-deductible. After all, pets are dependents, too, right? (Guffaws all around.)
Now, halfway through tax-filing season, comes news that pets are high on the list of unusual deductions taxpayers try to claim. From routine pet expenses to the costs of adopting a pet to, yes, pets as "dependents," tax accountants have heard it all this year, according to the Minnesota Society of Certified Public Accountants, which surveys its members annually about the most outlandish tax deductions proposed by clients.
Most of these doggy deductions don't hunt, but, believe it or not, some do. Could there be a spot for Sammy and Inky on our 1040?
Taxpayers typically itemize deductions on Schedule A of the 1040 form when their (legitimate) itemized deductions total more than their standard deduction. That hurdle rose last year after Congress imposed new limits and phase-outs for itemized deductions. 
For example, your own unreimbursed medical expenses are deductible only to the extent that they exceed 10% of your adjusted gross income, up from 7.5% previously. (People age 65 and older can use the old threshold through 2016.)
Other deductions may be reduced if your AGI exceeds $300,000 for married people filing jointly or $250,000 for singles.
Still, if you have sizable uninsured medical expenses or casualty or theft losses, make generous charitable contributions, incur large business expenses that aren't reimbursed by your employer, pay mortgage interest, or live in a high-tax state, you definitely want to run the numbers.  [SNIP....the Carolyn T Geer article continues at the Wall St. Journal.  Click here to continue reading the article at the Wall St Journal].
Posted on 8:40 AM | Categories:

401k / Roth IRA for foreigners?

Over at Bogleheads we came across the following discussion:

401k / Roth IRA for foreigners?Postby drftr » Fri Feb 28, 2014 3:14 am

Hi,



I wondered if tax deferred accounts are available to non-American non-US citizens. I'm from The Netherlands and have my money mostly invested in the US. I hope there's some benefits to be had from 401(k) / Roth IRAs but this may only be available for American tax payers. Just in case these ARE available, would benefits be the same for Americans and non-Americans?



Background info: I mostly invest in dividend paying equities through TD Ameritrade just to get income. This means that I buy stocks and don't plan to sell them within the next few decades if at all. I just want to live of the hopefully ever growing dividend payments. So I can imagine holding the equities in a tax deferred account and have regular dividend payments straight into my US bank account. But I'm not sure if the world works this way...



Any advice/insight is highly appreciated!



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Re: 401k / Roth IRA for foreigners?Postby dgdevil » Fri Feb 28, 2014 8:53 am

The world is not spinning in your favor, alas. 401(k) is provided by an employer, and IRA eligibility is determined by earned income, which does not include dividends.



http://www.irs.gov/Retirement-Plans/Pla ... nt-Plans-1



USA and NL have a tax treaty, so at least you're not paying excessive tax.

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Re: 401k / Roth IRA for foreigners?Postby an_asker » Fri Feb 28, 2014 10:27 am

drftr:



Where do you live and work - USA or Netherlands? I am asking because I was unaware that folks living in a different country can have accounts in the USA and play the USA stock market like 'natives'



I guess you always learn something new (if you make the effort!)!

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Re: 401k / Roth IRA for foreigners?Postby drftr » Sat Mar 01, 2014 3:29 am:-)



I'm a Dutch citizen. However, since I'm travelling this wonderful planet continuously there's not much of a link with good old Holland except for paying taxes and doing a project every couple of years. For this reason I thought moving my banking business to the US where I do my investments through TD Ameritrade (and TreasuryDirect once 30 year bond rates move to 5% or so).



Since I plan to redesign my investment portfolio more or less like Harry Browne's Permanent Portfolio (but with short term sovereign bonds and/or CDs from emerging markets, held in local currencies in local accounts) I thought it would make sense to see how I can maximize gains when applying tax rules - both in the US and in The Netherlands. It would be a pity to find out that I should have done things differently AFTER building the new portfolio, wouldn't it? For this reason I'm trying to find out whether it's good / not so good / bad to open bank accounts in the US - tax sheltered or not. So any help / advice is more than welcome!



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Re: 401k / Roth IRA for foreigners?Postby Karamatsu » Sat Mar 01, 2014 5:56 am

I don't think you would be able to open an IRA account in your situation. For that matter, you probably won't be able to open a Treasury Direct account, either. My impression is that both require an actual US social security number (not an ITIN).

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Re: 401k / Roth IRA for foreigners?Postby travltoo » Sat Mar 01, 2014 10:51 am

The link below discusses the advantages / disadvantages of foreign nationals participating in 401k plans



http://www.us.kpmg.com/microsite/tax/ies/tea/spring2006/article4.asp

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Re: 401k / Roth IRA for foreigners?Postby dgdevil » Sat Mar 01, 2014 2:59 pm

Karamatsu wrote:I don't think you would be able to open an IRA account in your situation. For that matter, you probably won't be able to open a Treasury Direct account, either. My impression is that both require an actual US social security number (not an ITIN).




S/S number easily obtained at SSA branch if one has a nonimmigrant work visa. When it comes to tax havens, it's hard to beat the Dutch!


Posted on 8:40 AM | Categories:

Girl Scout Cookies - why not tax-deductible?

We came across the following discussion over at Bogleheads

Girl Scout Cookies - why not tax-deductible?Postby dgdevil » Sat Mar 01, 2014 7:38 pm

The FAQ on the Girl Scouts home page claims cookies are not tax-deductible because the $4 per box ($5 in northern California) is fair-market value.




But they also say that each box costs 96 cents to produce, which is closer to like items at the supermarket - $1 to $2 at my rough guess. The rest goes to scouting programs.




Let's face it - $4 is quite hefty, esp. for plain varieties. So shouldn't we be able to claim a buck or two per box at tax time? Anyone tried?
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Re: Girl Scout Cookies - why not tax-deductible?Postby livesoft » Sat Mar 01, 2014 7:43 pm

How many boxes of cookies does one have to buy in order to make this worthwhile? These things should be in the round-off error of your charitable giving.


Of course, you can buy them, then donate them to a charitable homeless shelter or food bank.
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Re: Girl Scout Cookies - why not tax-deductible?Postby Rainier » Sat Mar 01, 2014 7:55 pm

Go for it, deduct it. You know the risks.
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Re: Girl Scout Cookies - why not tax-deductible?Postby sscritic » Sat Mar 01, 2014 7:57 pm

dgdevil wrote:The FAQ on the Girl Scouts home page claims cookies are not tax-deductible because the $4 per box ($5 in northern California) is fair-market value.




But they also say that each box costs 96 cents to produce, which is closer to like items at the supermarket - $1 to $2 at my rough guess. The rest goes to scouting programs.




Let's face it - $4 is quite hefty, esp. for plain varieties. So shouldn't we be able to claim a buck or two per box at tax time? Anyone tried?


You left out the minimum wage that has to be paid to the girls scouts standing outside your grocery store. Actually, let's be fair to them and give them the $15 an hour that so many are asking for. Just as your grocery store has to cover labor costs, so should you in figuring fair-market value. Now what is the cost of your box of Thin Mints?
San Francisco’s minimum wage is indexed to inflation and now stands at $10.74.
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Re: Girl Scout Cookies - why not tax-deductible?Postby bayview » Sat Mar 01, 2014 8:12 pm

Don't mess with my Thin Mints! :wink: 


In a less frivolous vein, I was once a Service Unit (think a collection of troops, geographically defined) Cookie Manager. I vividly remember counting out over $10K cash on my living room couch from one day's worth of sales. Any trained drug dog would have hit on the twenties stacked up on the cushions.


One of the most interesting and useful lessons from cookie sales was to make people understand that the first x number of boxes had $0 return. They were simply repaying the local council for the wholesale price. Only after that number of boxes were sold (and the money collected and turned in) did the troops start realizing a profit. I don't know how many of the girls grasped this, which is one of the realities of youth fund-raising: unless the adults in charge do what they ought to be doing, and have the kids set troop goals for trips and other adventures, figure out how much it will cost, and help them devise tactics to reach those goals, they wind up being free labor. :( 


I think that back when I was doing cookies, we sold them for $3.50/box while paying $3.20/box to the local council, which used the profits to run the local camp, subsidize troops in low-income areas, and pay staff. If you have a great location for your booth sales and move a lot of cookies, you can make a ton of money, but if your location isn't great, or you're relying solely on door-to-door, you may barely break even.


So to get back to the original post, if you want to try to declare your contribution, I think that you would have to do this on the profit margin that the troop realizes, rather than on the entire cost of the box of cookies. Yes, Little Brownie Bakers may be producing them for a buck a box, but the troop and the girls selling the cookies are paying a bunch more than that.


Just a thought as everyone scoops up their Thin Mints and Samoas and Boy Scout popcorn and church/temple calendars and holiday wrapping paper and whatnot. If the adult leaders are doing their jobs, these kids have set a plan, come up with a budget, and are trying to raise money to meet that goal. It does happen! (I often ask the girls selling the cookies what their plan is for the profits. It's pretty enlightening. I've met troops who were going to My Chalet in Switzerland, and by golly, they did it.)
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Re: Girl Scout Cookies - why not tax-deductible?Postby sscritic » Sat Mar 01, 2014 8:20 pm

bayview wrote:In a less frivolous vein, I was once a Service Unit (think a collection of troops, geographically defined) Cookie Manager. I vividly remember counting out over $10K cash on my living room couch from one day's worth of sales.


While I never saw the stash of cash, my daughter's garage was filled to the brim with cartons of cookie boxes. Everyday she would make a run to distribute them and then come back with another load of cartons to refill the garage. Now, as a well known cookie monster, I had these thoughts of making off with a carton or two, but stealing from girl scouts is too much even for me. Besides, my daughter probably would have had to make up for the missing cartons.
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Re: Girl Scout Cookies - why not tax-deductible?Postby bayview » Sat Mar 01, 2014 8:28 pm

sscritic wrote:
bayview wrote:In a less frivolous vein, I was once a Service Unit (think a collection of troops, geographically defined) Cookie Manager. I vividly remember counting out over $10K cash on my living room couch from one day's worth of sales.


While I never saw the stash of cash, my daughter's garage was filled to the brim with cartons of cookie boxes. Everyday she would make a run to distribute them and then come back with another load of cartons to refill the garage. Now, as a well known cookie monster, I had these thoughts of making off with a carton or two, but stealing from girl scouts is too much even for me. Besides, my daughter probably would have had to make up for the missing cartons.


Yup.
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Re: Girl Scout Cookies - why not tax-deductible?Postby hq38sq43 » Sat Mar 01, 2014 8:53 pm

The seller's cost is irrelevant to tax deduction. The difference, if any, between what you pay for the cookies and their "fair market value" is your deduction, if any. Probably not worth fretting about. Buy the cookies, enjoy them, and forget about tax deduction.


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Re: Girl Scout Cookies - why not tax-deductible?Postby livesoft » Sat Mar 01, 2014 9:08 pm

So buy 20 boxes and give away 5 boxes to charity. That gives you a $1 a box tax deduction. Legitimately.
It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.
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Re: Girl Scout Cookies - why not tax-deductible?Postby tomd37 » Sat Mar 01, 2014 9:14 pm

hq38sq43 hit the nail "in your coffin" square on its head according to IRS rules.
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Re: Girl Scout Cookies - why not tax-deductible?Postby market timer » Sat Mar 01, 2014 10:00 pm

I think the arbitrage here may be to bake your own cookies for 96 cents per box and donate them at FMV of $4. Works for people in the 25% bracket or higher.
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Re: Girl Scout Cookies - why not tax-deductible?Postby dgdevil » Sat Mar 01, 2014 11:46 pm

livesoft wrote:How many boxes of cookies does one have to buy in order to make this worthwhile?



Depends on whether I've just exited a pot dispensary.


Silly me, I thought mine was an original thought, but the NYT covered the same ground last year and concluded a deduction was justifiable.


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Re: Girl Scout Cookies - why not tax-deductible?Postby sscritic » Sat Mar 01, 2014 11:54 pm

dgdevil wrote:Silly me, I thought mine was an original thought, but the NYT covered the same ground last year and concluded a deduction was justifiable.


Hmm, my reading skills aren't as refined as yours. I don't see the conclusion that you do.
It occurred to us at Bucks, though, that some store cookies were similar to Girl Scout cookies and might be priced differently. If you are really determined to get a tax deduction, why not, perhaps, compare the price of the store cookies with a box of actual Girl Scout cookies and then follow the general rule of subtracting the fair market value to arrive at a deduction? If the price for the store version is $3 and the Girl Scout version is $5, you can perhaps argue that the fair market value is $3, and you are making a deductible donation of $2. (It probably wouldn’t be worthwhile, though, unless the price difference is really substantial, or you bought a lot of Girl Scout cookies.)


Ms. Tompkins dismissed that approach in a follow-up e-mail. “There really is no valid comparison here,” she wrote. “In other words ‘similar’ is not the same.”


She continued, “Girl Scout cookies are manufactured as authorized by Girl Scouts of the U.S.A. and are not sold in stores. Each Girl Scout council independently sets their own retail price. ”


I think we need a discussion of the wash sale rules about now. If the cookies aren't substantially identical, then there is no wash sale, I mean deduction.


P.S. There is no more weasely word than perhaps. Perhaps is not conclusive. [Compare the root of conclude with the root of conclusive.]
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Re: Girl Scout Cookies - why not tax-deductible?Postby Ged » Sat Mar 01, 2014 11:57 pm

If you want a deduction donate cash. The cookies aren't good for you anyway.
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Re: Girl Scout Cookies - why not tax-deductible?Postby dgdevil » Sun Mar 02, 2014 12:07 am

Ged wrote:If you want a deduction donate cash. The cookies aren't good for you anyway.



Which is why I'd question donating them to a foodbank.


@sscritic - Yes, points taken.
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Re: Girl Scout Cookies - why not tax-deductible?Postby Robert44 » Sun Mar 02, 2014 12:31 am

Our troops in St. Louis let you buy cookies and donate them to the troops overseas. Since we watch calories, that is what we do.
WE are not that cheap that we worry about a tax deduction for buying Girl scout cookies. You can only deduct the mark up, not the actual cost of the cookies.
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Re: Girl Scout Cookies - why not tax-deductible?Postby cheese_breath » Sun Mar 02, 2014 12:44 am

Robert44 wrote:You can only deduct the mark up, not the actual cost of the cookies.


What markup?
dgdevil wrote:The FAQ on the Girl Scouts home page claims cookies are not tax-deductible because the $4 per box ($5 in northern California) is fair-market value.


Unless you pay more than $4 per box (more than $5 in northern California) you're paying fair market value so there is nothing to deduct. You don't get to deduct the difference between production cost and fair market value.
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Re: Girl Scout Cookies - why not tax-deductible?Postby mnvalue » Sun Mar 02, 2014 12:56 am

Another option is to simply stop buying the cookies and donate cash instead.
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Re: Girl Scout Cookies - why not tax-deductible?Postby beachmom » Sun Mar 02, 2014 12:59 am

If you want to support Girl Scouts and get a tax deduction simply give them cash or write a check. Not as much fun as cookies but way more efficient. Our troop always keeps a jar for donations out. Ironically some folks apologize for not buying cookies and put $1 in our jar. Well our troop gets to keep 50¢ per box sold so the $1 twice as good for us.

BTW the cookies are still $3.50 a box here in the rural Southeast.

Posted on 8:39 AM | Categories: