Intuit Posts Season Results for TurboTax; Online Units Grew 14 Percent

Intuit Inc. (INTU) (Nasdaq: INTU) today released the second and final update for its fiscal year 2014 consumer tax offerings. Sales of TurboTax Online units grew 14 percent versus the comparable prior-year period. Year to date through April 16, total federal units grew 10 percent. 

Season-to-date TurboTax Federal Unit Data

			Season through April 16, 2013			Season Through April 16, 2014			Percent Change Year-Over-Year
TurboTax Desktop			5,792,000			5,691,000			-2%
TurboTax Online			18,460,000			20,980,000			14%
Sub-total TurboTax Units			24,252,000			26,671,000			10%
TurboTax Free File Alliance			1,072,000			1,154,000			8%
Total TurboTax Units			25,324,000			27,825,000			10%
TurboTax Accepted eFiles (through April 18)			26,632,000			28,992,000			9%

Note: Unit data through April 16, 2014. 

We delivered a strong tax season, growing the do-it-yourself software category and gaining share, said Sasan Goodarzi, senior vice president and general manager of Intuits consumer tax group. Our multi-year strategy is working. We innovated across the end-to-end TurboTax experience, increasing net promoter scores, improving retention and delighting new customers with simple returns. We're inspired by the results, and have exciting work underway to accelerate momentum in the next chapter of our multi-year journey. 

As of April 18, total self-prepared e-files received by the Internal Revenue Service were up more than 6 percent. On a comparable basis, TurboTax accepted e-files were up 9 percent. TurboTax gained approximately 2 points of share in the online software category this tax season.

Intuit expects full-year Consumer Tax revenue growth of approximately 6 percent, versus previous guidance of 4 to 5 percent growth. 

Intuit also reiterated revenue growth guidance of 6 to 8 percent for the total company.

Intuit Inc. creates business and financial management solutions that simplify the business of life for small businesses, consumers and accounting professionals. 

Its flagship products and services include QuickBooks®, Quicken® and TurboTax®, which make it easier to manage small businesses and payroll processing, personal finance, and tax preparation and filing. Mint.com provides a fresh, easy and intelligent way for people to manage their money, while Demandforce® offers marketing and communication tools for small businesses. ProSeries® and Lacerte® are Intuit's leading tax preparation offerings for professional accountants. 

Founded in 1983, Intuit had revenue of $4.2 billion in its fiscal year 2013. The company has approximately 8,000 employees with major offices in the United States , Canada , the United Kingdom , India and other locations. More information can be found at www.intuit.com.

Intuit and the Intuit logo, among others, are registered trademarks and/or registered service marks of Intuit Inc. in the United States and other countries. 

Cautions About Forward-looking Statements 

This press release contains forward-looking statements, including forecasts of Intuits future expected financial results; expectations regarding Intuits growth; expectations regarding Intuits product launches and marketing campaigns and their impacts on Intuits business; and Intuits prospects for the business in fiscal 2014. 

Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ materially from the expectations expressed in the forward-looking statements. These factors include, without limitation, the following: inherent difficulty in predicting consumer behavior; difficulties in receiving, processing, or filing customer tax submissions; consumers may not respond as we expected to our advertising and promotional activities; product introductions and price competition from our competitors can have unpredictable negative effects on our revenue, profitability and market position; governmental encroachment in our tax businesses or other governmental activities or public policy affecting the preparation and filing of tax returns could negatively affect our operating results and market position; we may not be able to successfully innovate and introduce new offerings and business models to meet our growth and profitability objectives, and current and future offerings may not adequately address customer needs and may not achieve broad market acceptance, which could harm our operating results and financial condition; business interruption or failure of our information technology and communication systems may impair the availability of our products and services, which may damage our reputation and harm our future financial results; as we upgrade and consolidate our customer facing applications and supporting information technology infrastructure, any problems with these implementations could interfere with our ability to deliver our offerings; any failure to properly use and protect personal customer information and data could harm our revenue, earnings and reputation; if we are unable to develop, manage and maintain critical third party business relationships, our business may be adversely affected; increased government regulation of our businesses may harm our operating results; if we fail to process transactions effectively or fail to adequately protect against potential fraudulent activities, our revenue and earnings may be harmed; any significant offering quality problems or delays in our offerings could harm our revenue, earnings and reputation; our participation in the Free File Alliance may result in lost revenue opportunities and cannibalization of our traditional paid franchise; the continuing global economic downturn may continue to impact consumer and small business spending, financial institutions and tax filings, which could negatively affect our revenue and profitability; year-over-year changes in the total number of tax filings that are submitted to government agencies due to economic conditions or otherwise may result in lost revenue opportunities; our revenue and earnings are highly seasonal and the timing of our revenue between quarters is difficult to predict, which may cause significant quarterly fluctuations in our financial results; our financial position may not make repurchasing shares advisable or we may issue additional shares in an acquisition causing our number of outstanding shares to grow; our inability to adequately protect our intellectual property rights may weaken our competitive position and reduce our revenue and earnings; our acquisition and divestiture activities may disrupt our ongoing business, may involve increased expenses and may present risks not contemplated at the time of the transactions; our use of significant amounts of debt to finance acquisitions or other activities could harm our financial condition and results of operation; and litigation involving intellectual property, antitrust, shareholder and other matters may increase our costs. More details about these and other risks that may impact our business are included in our Form 10-K for fiscal 2013 and in our other SEC (SCUR) filings. 

You can locate these reports through our website at http://investors.intuit.com. Forward-looking statements are based on information as of April 18, 2014, and we do not undertake any duty to update any forward-looking statement or other information in these materials.

Unit Data and Estimates Used 

The TurboTax unit numbers reported are based on weekly reports received by Intuit from its retailers and distributors as well as the number of units provided directly by Intuit. The numbers included in these updates are preliminary and include estimates, including estimates of sales by merchants that do not report their sales to Intuit. Although Intuit takes steps to verify the reliability of the unit data, Intuit believes that errors in the data reported by its retailers and distributors may impact its reported retail unit numbers on an immaterial basis.

Tax planning strategies for the self employed

Marguerita M. Cheng CFP® for Marketing Intelligence Center writes: Self-employment represents the opportunity to control your income and your schedule. An added bonus of your newfound freedom and flexibility is more regular interaction with your tax advisor.  If you're self-employed, you must also pay both the employer and employee share of FICA taxes, not to mention assume responsibility for your own retirement plan.

However, self-employed individuals can deduct half of this self-employment tax as a business expense.

Now that the 2013 tax filing season is behind us, here are some tax planning strategies that you can implement for the remainder of 2014. As always, be certain to consult a qualified tax advisor to discuss your specific situation.

(1) Understand self-employment tax 

It is critical that you understand and comply with your federal tax responsibilities. The federal government uses self-employment tax to fund Social Security and Medicare benefits. You must pay this tax even if you earn a modest amount of self-employment income. If you file a Schedule C as a sole proprietor, independent contractor, or statutory employee, the net profit listed on your Schedule C (or Schedule C-EZ) represents your self-employment income and must be included on Schedule SE, which is filed with your federal Form 1040. Schedule SE is used to calculate and report the amount of self-employment tax. In 2014, the maximum amount of income subject to Social Security taxes, otherwise referred to as the “wage base” increased by 2.9% to $117,000 from $113,700. For 2014, the Social Security tax rate, which is shared equally between employers and employees, remains 12.4%.  In other words, individuals at the highest income level will pay $7,254 in Social Security taxes in 2014 as compared to $7,049.40 in 2013. As mentioned above, although self-employed individuals pay both the employer and employee tax for a maximum Social Security tax of $14,508, they can deduct half of their FICA taxes as a business expense on their federal income tax return.

It is important not to overlook Medicare taxes. Employees and employers also each pay a 1.45% Medicare tax on all wages with no cap on earnings or income. Self-employed individuals pay a combined Medicare tax of 2.9%

(2) Make your timely estimated tax payments 

Employees typically have income tax, Social Security tax, and Medicare tax withheld from their paychecks. However, for self-employed individuals, odds are that no one is withholding federal and state taxes from your income. Consequently, you'll need to send quarterly estimated tax payments (using IRS Form 1040-ES) to satisfy your federal income tax and self-employment tax obligations. You may have to make state estimated tax payments, as well. If you neglect to send quarterly estimated tax payments, you may be subject to penalties, interest, and a big tax bill at the end of the year. For more information regarding estimated tax payments, refer to IRS Publication 505.

(3) Employ family members to save taxes

Hiring a family member to work for your business can result in tax savings by shifting business income to a relative. Reasonable compensation paid to an employee is a tax-deductible business expense, which can reduce the amount of taxable business income attributed to you. The IRS can question compensation paid to a family member, especially if the amount seems unreasonable or inconsistent, considering the services actually performed. Also, prior to hiring a family member who's a minor, verify that your business complies with child labor laws.

As a business owner, you're responsible for paying FICA (Social Security and Medicare) taxes on wages paid to your employees. The payment of these taxes will be a tax-deductible business expense.  However, if your business is a sole proprietorship and you hire your child who is under age 18, the wages that you pay your child won't be subject to FICA taxes.

As is the case with wages paid to all employees, wages paid to family members are subject to withholding of federal income and employment taxes, as well as certain other taxes in some states.

 (4) Establish an employer-sponsored retirement plan for tax (and nontax) reasons

Just because you're self-employed does not mean you skimp on retirement savings. You can establish an employer-sponsored retirement plan. With such a plan, your business may be allowed an immediate federal income tax deduction for contributing pretax dollars into a retirement account. Contributions and earnings will not be subject to federal income tax until withdrawn (as a tradeoff, tax-deferred funds withdrawn from these plans prior to age 59½ are generally subject to a 10% premature distribution penalty tax--as well as ordinary income tax--unless an exception applies). You can also establish a 401(k) plan that allows Roth contributions. With Roth contributions, there is no immediate tax benefit (after-tax dollars are contributed), but future qualified distributions may be free from federal income tax, provided certain criteria are satisfied. Consider evaluating the following retirement plan options:

• Simplified employee pension (SEP) IRA
• SIMPLE IRA
• SIMPLE 401(k)
• Individual 401(k), Single 401(k) or Solo 401(k)

The type of retirement plan that you should establish depends on your specific situation. Explore all of your options and consider the complexity of each plan. Please note that if your business has employees, you may have to provide retirement plan contributions for them. For additional information about retirement plan options, consult your qualified tax advisor or refer to IRS Publication 560.

(4) Take full advantage of all business deductions to lower taxable income

Because deductions lower your taxable income, confirm that your business is taking advantage of any business deductions to which it is entitled.  You may be able to deduct rent or home office expenses, as well as office equipment, furniture, supplies, and utilities. For business expenses to qualify as deductible, they must be considered both ordinary (common and accepted in your trade or business) and necessary (appropriate and helpful for your trade or business).

If you're concerned about lowering your taxable income this year, consider the following options:

• Deduct the business expenses associated with your motor vehicle, using either the standard mileage allowance or your actual business-related vehicle expenses to calculate your deduction
• Purchase supplies for your business late this year that you would normally order early next year
• Purchase depreciable business equipment, furnishings, and vehicles this year
• Deduct the appropriate portion of business meals, travel, and entertainment expenses
• Write off any bad business debts

(5) Deduct health-care related expenses

If you qualify, you may be able to benefit from the self-employed health insurance deduction, which would allow you to deduct up to 100% of the cost of health insurance that you provide for yourself, your spouse, and your dependents. This deduction is an “above-the-line” deductible expense. In other words, it is taken on the front of federal Form 1040 when calculating adjusted gross income, so it is available to all self-employed individuals regardless of whether or not they itemize.

Contributions to a health savings account (HSA) are also an "above-the-line” deductible expense. An HSA is a tax-exempt trust or custodial account established with a high-deductible health plan to earmark funds for health-care expenses. If you withdraw funds to pay for the qualified medical expenses of you, your spouse, or your dependents, the funds are not included in your adjusted gross income. Distributions from an HSA not used to pay for qualified medical expenses are included in your adjusted gross income, and are subject to an additional 20% penalty tax unless an exception applies.

About the author: Marguerita M. Cheng is the Chief Executive Officer at Blue Ocean Global Wealth. Marguerita has been quoted and featured in numerous national publications. Marguerita is a monthly columnist for the Washington Business Journal and Be Inkandescent Magazine. She is a CFP® professional, a Chartered Retirement Planning CounselorSM, and a Certified Divorce Financial Analyst.

Tax Planning for Beginners

TurboTax writes: Your tax refund is based on how much tax you pay in excess of the tax you owe. Basic tax planning strategies aimed at reducing the amount of your taxable income may increase the gap and thus your refund. In some cases, these strategies benefit you in other ways, offsetting future costs for health care or providing for retirement. Though some aspects of tax law can be complicated, even a beginner can focus on taxable income reduction.

Planning your deduction method

When completing your tax return, you have a choice between standard or itemized tax deduction methods to determine taxable income. The standard deduction is a dollar amount set by the government that you can claim without accounting for the expenses that typically make up a taxpayer's allowed deductions. Itemized deductions are actual expenditure you make for deductible expenses. Your actual purchases in a tax year may amount to more than the standard deduction amount. If that's the case, you'll likely pay less tax or get a larger refund using the itemized deduction method. However, the itemized method requires support in the form of receipts and other documents to demonstrate these amounts were actually spent. Consider a filing system to save receipts. Even if you choose to claim the standard deduction, having receipts on file will help you make an informed choice at tax time.

Retirement savings strategies

"Savings plans such as qualified individual retirement arrangements save you tax in the current year, investment earnings grow tax-free year to year, and provide income for retirement, when you may be taxed in a lower bracket," says James Windsor, certified public accountant from Ann Arbor, Mich. Many taxpayers turn to retirement plans for both the tax reductions now and income later. With a tax rate of 25 percent, for example, contributing $15,000 to a retirement plan may save you $3,750 on your current tax return. Investment earnings on money in your account are not taxed until withdrawal. Maximizing your annual contributions to retirement accounts may be an effective cornerstone for your basic tax planning strategy.

Other tax-sheltered savings

While the size of allowable contributions to retirement plans is attractive to many taxpayers, there are other savings plans that also defer tax and, in some cases, help you avoid tax altogether.

• 529 college savings plans -- Though these plans are funded by after-tax dollars, qualifying withdrawals are tax-free. You can choose prepaid tuition plans or education savings plans.
• Health coverage savings plans -- These include health savings accounts, medical savings accounts and flexible spending arrangements. Plans are funded by you, your employer or a combination, though in each case, both contributions and withdrawals for qualifying expenses are tax-free.
• Dependent care savings accounts -- These are flexible spending arrangements similar to health FSAs but focused on helping pay for childcare expenses while you’re working and held in a separate fund. Contributions and qualifying withdrawals are tax-free.

Withdrawals from any of these plans that are not made for qualifying expenses may be taxable at your rate at the time of withdrawal.

Using tax credits

Another way to reduce the tax you owe is to use tax credits that apply to your situation. Refundable tax credits not only reduce your tax but can be used to create a surplus, resulting in a refund.

• Low-income earners may qualify for the earned income tax credit. Eligibility depends on your earnings, filing status and number of dependent children.
• The child and dependent care credit applies when you must pay for care for children or disabled dependents so that you can work or look for work.
• You may qualify for the child tax credit of up to $1,000 for dependent children under 17 who qualify.
• Modest income earners below certain income levels may qualify for the retirement savings contributions credit, which is over and above other tax savings earned from contributions to IRAs or other retirement plans.
• The American Opportunity tax credit can offset some costs of post-secondary education during the first four years of college or university. The maximum credit is $2,500 per qualifying student, and 40 percent of the credit is refundable.

Tax Planning for High Income Tax Payers

Famiglio & Associates writes: We know that you have worked hard for your money and would like to reap the benefits to the greatest extent possible. Your ultimate goal is to sustain a successful wealth-building strategy while avoiding unnecessary and expensive tax consequences. We are interested in helping you achieve these objectives.

For the last few years, there has been talk of major tax reform that would place an increased tax burden on higher income individuals. Included in these discussions is the so-called “Buffet Rule,” which would impose a minimum tax rate of 30 percent on adjusted gross income (AGI) over $1 million. Most tax professionals predict that tax reform has little chance of becoming law in 2014, but it is wise to weigh your options carefully with higher tax rates looming on the horizon.

Although there is more certainty afforded for 2014 tax planning due to the many permanent tax incentives provided by the 2012 Taxpayer Relief Act, higher income individuals like you must carefully structure your financial transactions in order to minimize your tax burden.

Some of the issues that may impact your tax planning strategy for 2014 include:

• your marginal tax rate;
• personal exemption and itemized deduction phaseouts;
• additional 0.9 percent Medicare tax on wages and self-employment income over threshold amounts;
• net investment income tax of 3.8 percent for taxpayers with modified AGI exceeding threshold amounts;
• increased capital gain rate of 20 percent for taxpayers in the highest tax bracket;
• a decreased gain exclusion (from 100 percent to 50 percent) for small business stock acquired in 2014 or later and held for more than 5 years;
• the individual mandate to carry minimum essential health coverage;
• foreign account disclosure and reporting requirements and related enforcement penalties;
• in-service rollovers to designated Roth accounts without the imposition of a 10-percent additional tax on early distributions;
• unless retroactively extended by Congress, the exclusion from income of  IRA distributions to charity of up to $100,000 is not available for 2014;
• strict rules about deducting passive activity losses (PALs); and
• alternative minimum tax (AMT).

As you can see, the more complex issues faced by higher-income individuals create a challenging planning environment for the 2014 tax filing season. We would like to meet with you to discuss the options that are best suited to meet your personal financial goals while minimizing your tax liability. Please contact our office at your earliest convenience to make an appointment.

How to setup Quickbooks PC for Lettuce / simple online inventory and order management system for Quickbooks

Chris Bengston for Lettuce writes: In order to make your import from Quickbooks into Lettuce as easy as possible, we highly recommend going through these instructions beforehand.  It will verify that your items are formatted correctly, that your settings are compatible with Lettuce, and that you have all the necessary line items for Lettuce to create invoices correctly within your file.

Important: please verify that you are logged in as an Administrator and in single-user mode before continuing!

Note:  click images to enlarge

Optimize Quickbooks 2009-2012 for Lettuce

First, open QuickBooks and go to Edit > Preferences

Within preferences, select Items & Inventory from the left side and make sure that “Inventory and purchase orders are active” is checked on the company preferences tab.

Next, find Sales Tax on the left side of the preferences menu and make sure that you answered “yes” to“Do you charge sales tax?”

NOTE: If you’re a wholesaler only, you’ll still want to answer “yes” here.  After doing so, simply select the drop – down menu under Your most common sales tax item and add a new tax item called “Wholesale – no sales tax.”

Close out of the preferences menu and open Items & Services on the main screen.

Verify that your items have their information in the right fields

 Put the SKU number in the Item Name/Number field

 Put the name of your item in the Description on Sales Transactions field (Description field for Non-Inventory Parts)

 Input the cost to you of each item (Inventory Parts only)

 Input the Sales Price to your customers of each item

 Make sure that QuickBooks has selected Inventory Asset as the Asset Account (Inventory Parts only)

 Set the Reorder Point (Inventory Parts only)

 Input the inventory on hand (for Inventory Parts only)

Create necessary Line Items

There are three items that are necessary for Lettuce to be able to push Invoices correctly into Quickbooks:  a Shipping charge, a generic Discount, and a Shipping Discount.  Within your items list (Items and Services from the main screen, or "Lists"- Item List), either verify you have the following items or create them by clicking Item->New in the lower left hand corner of the item list window.

Discount (item type Discount), account set to your sales Income account.

Shipping and Handling (item type Other Charge), account set to your shipping and delivery income account.

Shipping Discount (item type Discount), account set to your shipping and delivery income account.

Please note that all of these are generic- you shouldn't set any specific dollar amount or percentage for any of these items.  If you have items for these fields already, please create new ones to match the items above, and change the name slightly.  For instance, if you have a Shipping item already, but it's a "service" instead of an "other charge," create a new one with a slightly different name that's an "other charge."  The specific names above don't have to be used, as long as the item type and accounts are set up correctly!

Set up the Intuit Sync manager (Required!)

Please refer to the Setup the Intuit Sync Manager tutorial in order to set up your intuit sync manager.  Once your file is uploaded to the Intuit cloud, you can integrate your Quickbooks file with Lettuce using the same login information that you use for the sync manager.