Monday, March 31, 2014

IRS2Go 4.0 Smartphone App Downloads Surpass 2.3 Million

The Internal Revenue Service today announced that more than 2.3 million users have downloaded or updated IRS’s smartphone application IRS2Go 4.0 so far this year. The app’s latest version was launched earlier this year for the 2014 filing season.  

Since its inception in 2011, the total number of downloads, including updates, of its IRS2Go smartphone application has surpassed 5.5 million across both Apple and Android devices.
“IRS2Go’s updated features make it easier than ever for people to check on their refunds and get important tax information,” said IRS Commissioner John Koskinen. “The surge in downloads reflects our interest in providing our nation’s taxpayers with these types of tools to provide helpful, up-to-date tax return information.”   

Over half of all visitors to the Where’s My Refund page on IRS.gov were mobile users. Additionally, IRS2Go accounted for 22 percent of the total Where’s My Refund tool requests in February. 

IRS2Go 4.0 is available in both English and Spanish and provides features to help taxpayers check on the status of their tax refunds, obtain tax records, find free tax preparation providers and stay connected with the IRS through social media channels such as YouTube and Twitter.
iPhone and iTouch users can update or download the free IRS2Go application by visiting the iTunes App Store. Android users can visit Google Play to download the free IRS2Go app.
For more information on IRS2Go, products and services through social mediachannels and other media products, visit www.IRS.gov.
Posted on 2:01 PM | Categories:

MYOB Essentials – The 8 necessities of online accounting

Aishah Mustapha for MYOB writes: Excited is probably an understatement for how we feel about today’s announcement.


After working on it extensively and keeping it under wraps last year and then announcing it last month at our roadshow, we’re finally releasing MYOB Essentials – online accounting made easy.
The making of MYOB Essentials focuses on 3 pillars: easy, on-the-go and better value for our clients.MYOB-Essentails-blog


Behind the scenes, the product development team was obsessed with customer feedback. Every button, every menu option and pretty much everything you see on display in MYOB Essentials were tested by user focus groups and went through numerous iterations.
The result?
MYOB Essentials Dashboard
MYOB Essentials Dashboard
MYOB Essentials not only covers all the essentials a small business needs, but does it at an extremely affordable price with no hidden costs and no locked-in contract. It is also browser based, which means you can access it from any device with an Internet browser.*
The MYOB Essentials range caters to a wide range of audience, from those running one-man shows to those running a business with staff. Here’s a taste of what you get:

MYOB Essentials covers the 8 necessities of online accounting
Necessity #1 – A snapshot of your business
The homepage shows the dashboard, which is designed to be simple, clean and captures the business’ financial standings.
Necessity #2 – Sales including quotes, and invoices
Create quotes, turn them into invoices and stay on top of your GST and BAS obligations easily.
Necessity #3 – Expenses
 MYOB Essentials lets you keep track of all the things you have to pay such as rent and supplier bills, and tells you when they are due.
Necessity #4 – Bank feeds
Bank feeds allows you to connect your bank account to MYOB Essentials. Every bank transaction will be synced into MYOB Essentials automatically. The transactions will then be matched to your sales, expense or any rules that you set.
Necessity #5 – Contacts
Keep track of all your business contacts in one place, especially those that owe you money.
Necessity #6 – Payroll
If you hire people, maintaining payroll will be a breeze with MYOB Essentials
Necessity #7 –  Fulfilling GST and BAS obligations
Preparing your BAS is super easy as MYOB Essentials can generate a GST report for you anytime, whether you submit your BAS quarterly or monthly.
Necessity #8 –  Reports
MYOB Essentials offer 30 reports on your business including GST, BAS, and Profit and Loss.
It doesn’t end there. MYOB Essentials will have a range of add-ons, if you need more functions or have specific needs. Our developers are busy working in the background to introduce these add-ons for MYOB Essentials, just as we did with AccountRight.
Posted on 1:34 PM | Categories:

Small Businesses Get Time Back With Square's Accounting Integrations / Square's Partner Platform Expands to Include Both QuickBooks and Xero

Today Square launched its software partner platform, collaborating with third parties to build new applications that complement Square's suite of business services. The launch extends Works with Square, a program launched earlier this year to connect customers with more tools for their businesses.
Square is committed to building powerful solutions that are affordable and accessible to all businesses. After launching an integration withQuickBooks in November, today Square expands their platform with a new integration with Xero. Both integrations are simplifying operations for small businesses in the U.S. With data flowing automatically from point of sale to back-office accounting software, sellers save time spent manually inputting sales.
The new Xero integration is Square's second available in the U.S. Since November, thousands of sellers have been saving time and improving accuracy with Square's integration with QuickBooks, seamlessly importing their Square sales data into QuickBooks each day. "The Square/QuickBooks integration couldn't have come at a better time for our growing business. It has been nothing short of a miracle and has given us so much time back," says Jess Hughes of Tad Hughes Custom Fit Studio in Houston.
Starting today, sellers can link their Square and Xero accounts in minutes and pull past Square sales data into Xero. Once connected, each day's transactions automatically import, summarize, and populate the appropriate account within Xero's general ledger, providing an accrual accounting view of cash flow. A once tedious process now made simple.
"I used to spend my Sunday afternoons manually dragging, dropping and categorizing my weekly Square transactions into Xero," says Andy Ciordia of The Secret Chocolatier. "This integration gives me my weekends back -- I have more time for my family and my business."
Sellers of all sizes are increasingly adopting Square's business tools for their affordability and ease of use. From the full point of sale app Square Register, to the included sales reports and business analytics, to the Square Market eCommerce platform, Square's products focus on making it easier for sellers to run and grow their businesses.
Last week Square Japan also integrated Japanese accounting software freee, enabling sellers to connect their accounts and streamline their sales and accounting.
About Square, Inc.Square makes commerce easy for everyone. From accepting credit cards, to managing a full point of sale, and selling online, Square offers simple and affordable tools for businesses starting and growing. Square Reader, the free credit card reader for the iPhone, iPad, and Android devices, allows businesses to accept credit cards anywhere, anytime, for one low, transparent rate. Square's suite of business tools includeSquare Register, an analytics dashboard, Square Market, Square Wallet, and Square Stand. Square also created the easiest way to send and receive money with Square Cash. Founded in 2009, and headquartered in San Francisco, Square is currently available in the United States, Canada, and Japan.
Posted on 10:45 AM | Categories:

The many faces of the Accounting Professional in the US

Hector Garcia for Quick Bookkeeping writes:  Depending on the accounting professional you are, you may call your self any the following: Bookkeeper, Accountant, Controller, Tax Preparer, or CPA.
First, let me point out that there is titles based on function, and titles based on certifications or licenses.  I believe it is a mayor disservice to clients when this is not clear and out on the open on the “status” of the accounting professional.
Please do not get me wrong, the license or certification that the accounting professional does not make the accountant good or better than another, it just identifies the legal limits on which their function will reach… I’ll discuss this later on.
For now, I would like to identify the most common group of accounting professionals that are one of these:
  • Bookkeeper: this is the most misunderstood function in the profession.  While some bookkeepers perform very basic functions such as writing checks and receiving payments in an accounting system; there are very experienced bookkeepers that will company prepare financial statements that are non-materially different from a CPA prepared financial statements.  Some Bookkeepers will prefer to call themselves “Accountants” because of their knowledge and experience of accounting rules.
  • Accountant (Non-CPA): typically a person that has an undergraduate degree in accounting.  Or if not, has the equivalent working experience.  An Accountant will typically apply Accounting rules that adjust the Bookkeeper’s work to comply with General Accepted Accounting Principles; however and non-CPA accountant may not sign the reports and attest to their fairness
  • Controller: Controller is a Bookkeeper or Accountant that typically has responsibility over the control of the financial reporting and accounting procedures, this is a title mostly given to a Management level accounting individual that reports directly to the CFO or Director of Finances within an organization.
  • Tax Preparer: typically means they prepare taxes as a profession.  At the very least, this person would have a registered PTIN (Preparer’s Tax Identification Number) with the IRS.  This person is registered with the IRS and pays its annual dues to be able to sign a tax return as a preparer
Before I move on to the “certified” or “licensed” titles, I will disclose that I have been practicing as a Non-CPA Accountant or Bookkeeper for longer I have been practicing as a CPA.  So I am not trying to imply that that the current title or status of practitioner affects their work; I for one thought myself of a “Professional Accountant” before becoming a CPA, because of the functions I performed and the satisfied clients I had for 6 years as a practitioner.
So, on to the Major Designations:
  • Enrolled Agent (EA): This certification is actually older that the CPA itself; dating back from 1884.  An Enrolled Agent is typically a tax practitioner that will represent a taxpayer in front of he IRS during the preparation or even after if there is issues or audit.  EA’s required 72 hours of continuing education every 3 years, they are regulated by the IRS at the federal level, unlike CPA’s that are regulated by the state they practice in.  It is virtually impossible to become a EA if their if convicted of a felony in ANY state.  There is approximately 48,000 EA’s in US.
  • Certified Public Accountant (CPA): designation is maintained by the AICPA, examination and continued education is managed by NASBA, and official licensing is awarded by each state. In most states, a CPA has at least 150 college credits with a minimum amount in account, which is the equivalent of a bachelor’s degree in accounting and a post-graduate degree with concentration in Accounting.  Most CPA’s would have a Master’s Degree in Taxation or Accounting; many have MBA’s with concentration in Accounting.  A CPA must pass a 4-part examination that is a process of 1 year of study and testing to most candidates, less than 10% pass all four exams on the first try.  CPA’s are required to do 80 hours of continuing education every 2 years.
Functional Designations:
  • Registered Tax Return Preparer (RTRP): voluntary certification obtained from the IRS that requires the practitioner to pass an exam and have 15 hours of tax continuing education per year.  It is very difficult to obtain this if the practitioner has had a felony of any type.  RTRPs are bout 20,000 in the US.
  • Certified Bookkeeper (CB): There are about 30,000 CB’s in the US.  This designation is protected and managed by AIPB.org, a private organization not affiliated to any government body.  The testing process of the CB is rigorous and some consider it to be a “mini-CPA” exam.  A CB has demonstrated to have deep understanding of both bookkeeping and accounting functions.
  • Certified Management Accountant (CMA): is the most respected Accounting certification after the CPA.  The exam and Continued education requirements are almost as rigorous as the CPA.  There is about 40,000 CMA’s according to IMANET.org.
  • Chartered Financial Analyst (CFA): this is NOT an accounting designation, it is a FINANCIAL designation, most CFA’s would know basic accounting, at least being able to interpret a financial statement very well.  There are 98,000 CFA’s according to CFAINSTITUTE.org
  • Certified QuickBooks ProAdvisor: this is an accounting professional that specialized in working with, installing, or supporting QuickBooks accounting software either as a principal function or in combination of other.  There are 65,000 ProAdvisors according to Intuit.com; nut the number of CERTIFIED ProAdvisors is unknown; as some ProAdvisors join the program because the great benefits of having the software and support for a very low annual fee.
Combinations:
  • CPA’s will rarely also have a CB, EA, or RTRP combination, as the CPA tends to overshadows all other accounting and tax related designations.  However, there are many CPA’s that are also Certified QuickBooks ProAdvisors.
  • Many CB’s will be RTRP or EA, because that would be a Bookkeeper that also focuses on Tax Preparation as well
  • Most non-CPA’s Certified QuickBooks ProAdvisors are also “Bookkeepers”, “Accountants” and/or “Tax Preparers”.   An accountant or tax preparer that can also work with QuickBooks well is a big asset to many small businesses.
Billing Rates paid by the average small business to a 3rd party (non-employee) practitioner:
  • CPA’s are normally charging $200 (give or take $50) per hour for accounting work such as Financial Statement and Tax Preparation.  Attest work like Reviews and Audits tend to have a higher rate due to the higher risk involved on the work.
  • CB, CMA, or “Accountant” are typically charging $100 (give or take $50) per hour for Bookkeeping and Financial Statement Preparation.  Typically this type of Accountant has higher fees when is highly skilled with a software package such as QuickBooks.
  • Enrolled Agents typically start their tax preparation fees at $250.
  • Tax Preparer or PTIN holders are charging typically $175 per tax return.  Fees tend to go up based on complexity of tax return.
  • Bookkeepers that are not carry any designation or QuickBooks Certification are typically charging $35 to $65 per hour for contracted Bookkeeping work
  • Certified QuickBooks ProAdvisors that do not have Accounting certifications but are highly skilled in the program and can train/support small businesses are able to get $75 to $125 per hour in some cases.
Limitations:
  • CPA’s tend to have the least amount of limitations in the profession.  They can instantly represent tax payers in front of the IRS without having to pass any sort of IRs examinations like EA’s.  CPA’s can also sign Reviewed and Audited Financial Statements which are required by most banks before issuing larger loans.  CPA’s registered with the SEC can present audited financial statements to the public that will reply on that information for investing.
  • EA’s have virtually unlimited practicing power for Tax Returns and other IRS matters.  Which is a benefit enjoyed by CPA’s and attorneys.
  • RTRP’s can prepare tax returns but have limited representation rights with the IRS and in must cases required the tax payer present.

 So… When do you need a CPA or Enrolled Agent?
Being a CPA or an EA does NOT guarantee a good tax professional.  However, it does represent a designation that was hard to obtain and has a lot to loose it the practitioner would get disbarred for ethics or gross negligence.
You want to hire a CPA or EA to prepare your taxes if you want guarantee that the practitioner will have the capacity to represent you in case or an error or a tax audit.
It is important to point out that there are many unenrolled tax preparers that do great work out there, just limited when it comes to representation of the taxpayer in an audit or dispute.  But there is nothing wrong with hiring and retaining an unenrolled Tax Prepare with a proper PTIN.
If you are working with a government contract, bank, or investment institution that requires “Compiled Financial Statements” that means that you need a CPA to prepare them; even more so if the financial statements must be “Reviewed” or “Audited” which are CPA terms.

How to choose?
In my experience, successful small business tend to retain 3 to 4 Accounting professionals:
  • Internal Bookkeeper an Internal Comptroller that performs bank reconciliation functions and basic cash-basis financial statements
  • External Accountant Consultant that is typically performing the function of both an accountant and a software consultant.  Making sure that the accounting software (typically QuickBooks) is outputting the desired results and detects potential accounting errors generated from software/system glitches or wrong-use.
  • CPA or EA for Annual and Quarterly Tax Preparation and general high level business consulting.
  • (IF REQUIRED) CPA for Audited Financial Statements.  Auditors cannot perform any other work for the business to retain independence.
Posted on 10:41 AM | Categories:

Deduction of tax preparation fees in the US (timing)

Over at Bogleheads we came across the following discussion:  Deduction of tax preparation fees in the US (timing)Postby wuschelbeutel » 

Sun Mar 30, 2014 8:49 pm


At the end of 2013, I used my credit card to build up a retainer for my tax attorney (the credit card bill was paid off in 2014). However, this retainer was partially charged by the lawyer in 2014 (he didn't charge from it in 2013). I think I can't deduct the entire retainer (since the entire sum wasn't used for services), but can I deduct the part of the retainer that was taken out by the lawyer in 2014 from my 2013 taxes?


If the answer is no, can I deduct it from my 2014 taxes (when I fill it out a year from now), even though the retainer was created in 2013?


To already preempt the "Why don't you ask your tax lawyer?": By answering he probably bill me for the amount I could potentially save from a deduction.
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Re: Deduction of tax preparation fees in the US (timing)Postby Gill » Sun Mar 30, 2014 9:17 pm

wuschelbeutel wrote:To already preempt the "Why don't you ask your tax lawyer?": By answering he probably bill me for the amount I could potentially save from a deduction.


Your thinking doesn't make sense. You've retained a tax attorney and are asking this question here? He can answer you in two minutes. Even at a $1,000 an hour that's only $33.
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Re: Deduction of tax preparation fees in the US (timing)Postby JW Nearly Retired » Sun Mar 30, 2014 9:19 pm

Will you itemize your tax deductions or just take the standard deduction for 2013? Looking at some of your past posts I might guess the latter which would make your retainer deductibility question moot.
If you will itemize in 2014 I think you would be safe to deduct it for 2014 taxes, but this deduction (Sched A line 22) will only be useful to the extent this category of deductions exceeds 2% of your AGI.
JW
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Re: Deduction of tax preparation fees in the US (timing)Postby Iorek » Sun Mar 30, 2014 9:27 pm

I don't think I have ever had misc itemized deductions above the floor, but I would think you could deduct on your 2014 taxes the amount that "used up" during 2014. I am guessing you still have some right to a refund of the remaining funds if you were to end your client relationship-- if not then you might have an argument for deducting it in 2013, but I wouldn't do that w/o checking with your lawyer (esp. as you don't want to create situation where the two of you are treating the retainer in an inconsistent manner).
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Re: Deduction of tax preparation fees in the US (timing)Postby livesoft » Sun Mar 30, 2014 9:27 pm

Is this for a business and you intend to deduct the expense on Schedule C?


If not for a business then you will need to do the Schedule A thing and hope that either (a) your tax prep fees were so outrageous that they exceeded 2% of your AGI by a large amount or (b) you already had enough miscellaneous itemized deductions to fill up the 2% floor, so that your tax prep fees have a chance of being deductible. One year I reached the (b), but I have never reached the (a) reason.
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: Deduction of tax preparation fees in the US (timing)Postby wuschelbeutel » Sun Mar 30, 2014 10:08 pm

Thanks for your comments and confirming that I can deduct from my 2014 taxes.


Gill wrote:
wuschelbeutel wrote:To already preempt the "Why don't you ask your tax lawyer?": By answering he probably bill me for the amount I could potentially save from a deduction.


Your thinking doesn't make sense. You've retained a tax attorney and are asking this question here? He can answer you in two minutes. Even at a $1,000 an hour that's only $33.



The resolution is much more coarse than 2min. Lawyers usually use the 6-minute rule. This one seems to use the 12-minute rule though.


JW Nearly Retired wrote:Will you itemize your tax deductions or just take the standard deduction for 2013? Looking at some of your past posts I might guess the latter which would make your retainer deductibility question moot.
If you will itemize in 2014 I think you would be safe to deduct it for 2014 taxes, but this deduction (Sched A line 22) will only be useful to the extent this category of deductions exceeds 2% of your AGI.
JW



Yes, you're right. There is no way I can reach $6k of deductions for 2013 (to beat the standard deduction), unless I can claim the earned Income Tax Credit, but I haven't looked into that. I'm sure I'll beat 6k in tax lawyer fees for 2014 though and that's a very big chunk of my salary.


Iorek wrote:I don't think I have ever had misc itemized deductions above the floor, but I would think you could deduct on your 2014 taxes the amount that "used up" during 2014. I am guessing you still have some right to a refund of the remaining funds if you were to end your client relationship-- if not then you might have an argument for deducting it in 2013, but I wouldn't do that w/o checking with your lawyer (esp. as you don't want to create situation where the two of you are treating the retainer in an inconsistent manner).



I really hope I don't lose my retainer in an illegitimate way (the retainer always has to be above a certain threshold at this firm).


livesoft wrote:Is this for a business and you intend to deduct the expense on Schedule C?


If not for a business then you will need to do the Schedule A thing and hope that either (a) your tax prep fees were so outrageous that they exceeded 2% of your AGI by a large amount or (b) you already had enough miscellaneous itemized deductions to fill up the 2% floor, so that your tax prep fees have a chance of being deductible. One year I reached the (b), but I have never reached the (a) reason.



No, not a business. I barely make above minimum wage right now, so I'm not worried about (b) and the fact that I have a tax lawyer represent me and do my work should also ensure (a).
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Re: Deduction of tax preparation fees in the US (timing)Postby cheese_breath » Sun Mar 30, 2014 11:36 pm

If it's not too personal, I'm wondering what you do that you barely make above minimum wage but need a tax attorney for.
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Re: Deduction of tax preparation fees in the US (timing)Postby mnaspbh » Mon Mar 31, 2014 12:26 am

cheese_breath wrote:If it's not too personal, I'm wondering what you do that you barely make above minimum wage but need a tax attorney for.



Based on some of the OP's past posts, he's said he's German but working in the US, and has had some income from international sources. That could make for a very complex tax situation, regardless of income level.
Posted on 10:41 AM | Categories: