Intuit Buys Lettuce Apps For $30M To Add Inventory And Order Management To Quickbooks

 Ingrid Lunden for TechCrunch writes: Some consolidation afoot in world of cloud-based enterprise services. Intuit has made another acquisition to help position itself as the go-to place for small and medium businesses to run their offices in the cloud: it has bought Lettuce, a platform for companies to manage both orders and inventory online. Lettuce is not disclosing the terms of the deal in its announcement, but we have confirmed with sources that the price tag was $30 million, a figure first reported in Pando Daily.

A spokesperson for Intuit said the company was not releasing terms of the deal “as it isn’t material to their business.” This is the company’s 17th acquisition.

Unlike some acquisitions that see the buyer shut down the newly owned product, either in a talent acquisition or with the intention of using some of the tech in a new service altogether, in this case Intuit will be continuing to operate Lettuce as a standalone app. It will also integrate it further into its flagship SMB office accounting product, Quickbooks (there had already been an integration; now it gets deeper).

“We are so excited to join Intuit and take our product to the next level. With Intuit’s reach, we will now be able to help millions of SMBs solve the same problems we felt when we originally designed Lettuce for our previous inventory based dog toy company,” CEO and founder Raad Mobrem tells me. “Lettuce is all about solving a huge inventory and order management void with incredibly simple and well designed cloud software. And the need was definitely there.”

He says the company was growing 30-40% month over month and “our churn was incredibly low.” There were “thousands” of customers, he tells me.

He adds that they will be staying in Venice Beach, Calif., where they were founded. “I am very excited about the entire deal and look forward to helping Intuit continue in innovating cloud/mobile services for the future,” he says.

In the blog post announcing the news, he explains a bit more about the transition:

“While this is a big step for Lettuce, it doesn’t mean that much will change,” he writes. “Since the beginning, we’ve worked hard to improve the way you manage your orders and inventory so you can eliminate time-consuming, tedious tasks and spend more time doing the things you love. We plan on continuing down this path and once the transaction is closed, with Intuit’s support, we plan to accelerate this tremendously.”

When we wrote about Lettuce’s $2.1 million funding round back in 2012 from investors like 500 Startups and Crosscut Ventures, we noted that the company had by that point processed some $2 million in orders.   [snip]    click here to read the rest of the article at TechCrunch.

For Small Business Week, IRS Spotlights Two Webinars, Health Care Tax Benefits, Simplified Home Office Deduction, Relief for Reclassifying Workers

The Internal Revenue Service is marking Small Business Week, May 12 to 16, by holding two free webinars for small businesses and encouraging them to check out several key tax benefits and a special relief program for employers who reclassify their workers as employees.

The webinars will cover payments to independent contractors and filing requirements for Form 1099 on Tuesday, May 13, and avoiding common mistakes on Thursday, May 15. Both webinars will begin at 2 p.m. Eastern Time and last an hour. To register for either event or view archived versions of past webinars, visit the Webinars for Small Businesses page on IRS.gov.

It’s not too early for small business owners to begin planning to take advantage of various tax-saving opportunities when they file their 2014 federal income tax returns. In addition, substantial relief from past payroll tax obligations is available to eligible employers who agree to reclassify their workers as employees in the future. Here are further details.

Credit Helps Small Employers Provide Health Care Coverage

Small employers that pay at least half of the premiums for employee health insurance coverage under a qualifying arrangement may be eligible for the small business health care tax credit. First available in 2010, the credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.

Eligible small employers can claim the credit for 2010 through 2013 and for two additional years beginning in 2014. Targeted to small employers that primarily employ low-and moderate-income workers, the maximum credit, in tax-years 2010 through 2013, is 35 percent of premiums paid by small businesses and 25 percent of premiums paid by tax-exempt organizations.

In 2014, the maximum credit rate rises to 50 percent for small businesses and 35 percent for tax-exempt organizations. In addition, the small employer must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program (SHOP) Marketplace (or through a direct enrollment process if available).

Small businesses claim the credit on their income tax return using Form 8941. Tax-exempt organizations also use Form 8941 and then claim the credit on Form 990-T.

The Small Business Health Care Tax Credit page on IRS.gov is packed with information and resources designed to help small employers see if they qualify for the credit and then figure it correctly. Learn more about health care options for small employers at HealthCare.gov.

Health Insurance Deduction Helps Many Self-Employed People

Many business owners qualify for the self-employed health insurance deduction. Available regardless of whether a taxpayer itemizes their deductions on Schedule A, eligible taxpayers claim this deduction on Form 1040 Line 29.

Premiums paid for medical, dental and qualified long-term care insurance covering the taxpayer, spouse and dependents are generally eligible for this deduction. Premiums paid for coverage of an adult child, under age 27 also qualify, even if the child is not the taxpayer’s dependent.

The insurance plan must be set up under the taxpayer’s business, and the taxpayer cannot be eligible to participate in an employer-sponsored health plan. Other special rules apply. Details, including a worksheet, are in IRS Publication 535, Business Expenses.

Simplified Option Available for Claiming the Home Office Deduction

Starting in tax year 2013, people with home-based businesses can choose a new simplified option for figuring the deduction for business use of a home, commonly referred to as the home office deduction. The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually.

Normally, home-based businesses are required to fill out a 43-line form (Form 8829) often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions. Instead, taxpayers claiming the optional deduction need only complete a short worksheet in the tax instructions and enter the result on their return.

Self-employed individuals claim the home office deduction on Schedule C Line 30, farmers claim it on Schedule F Line 32 and eligible employees claim it on Schedule A Line 21.

Though homeowners using the new option cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A. These deductions need not be allocated between personal and business use, as is required under the regular method.

Business expenses unrelated to the home, such as advertising, supplies and wages paid to employees, are still fully deductible. Long-standing restrictions on the home office deduction, such as the requirement that a home office be used regularly and exclusively for business and the limit tied to the income derived from the particular business, still apply under the new option.

Further details on the home office deduction and the new option can be found in IRS Publication 587.

Many Employers Can Qualify for Substantial Payroll Tax Relief

Many businesses can now resolve past worker classification issues at a low cost by voluntarily reclassifying their workers. Better yet, they don’t have to wait for an IRS audit to do so.

By prospectively reclassifying workers, making a minimal payment and meeting a few other requirements, eligible businesses can achieve greater certainty for themselves, their workers and the government. More than 1,500 employers have applied to participate in the IRS Voluntary Classification Settlement Program(VCSP) since it was launched in September 2011.

The VCSP is available to many businesses, tax-exempt organizations and government entities that currently treat their workers or a class or group of workers as nonemployees or independent contractors, and now want to correctly treat these workers as employees in the future. To be eligible, an employer must:

• Consistently have treated the workers in the past as nonemployees,
• Have filed all required Forms 1099 for the workers for the previous three years
• Not currently be under audit for employment taxes by the IRS
• Not currently be under audit by the Department of Labor or a state agency on the classification of these workers. If either IRS or Labor previously audited the employer on the classification of the workers, the employer must have complied with the results of the audit and not currently be contesting the classification in court. 

Interested employers can apply for the program by filing Form 8952. Employers accepted into the program will pay an amount effectively equaling just over one percent of the wages paid to the reclassified workers for the past year. It’s that simple. Moreover, employers will not be audited on payroll taxes related to these workers for prior years.

Details on these and other tax benefits are on IRS.gov. In addition, the Small Business Tax Center (www.irs.gov/smallbiz) has links to a variety of useful tax tools for small business, including the Virtual Small Business Tax Workshop, a downloadable tax calendar, common forms and their instructions and help on everything from how to get an Employer Identification Number (EIN) online to how to engage with the IRS in the event of an audit.

New solution makes tax filing easier for bitcoin users / Cloud-based solution from Avalara, Inc. helps companies that accept bitcoins comply with tax laws

Rich Steves for InsideCounsel.com writes: The rise in popularity of the crypto-currency bitcoin has been a boon for many, but has carried with it a number of issues. Setting aside the public’s association of bitcoin with illegal activity, issues with theft andbankruptcy and ongoing debates about bitcoin regulation, there is also the issue of the taxability of the virtual currency. 

This spring, the Internal Revenue Service declared that bitcoins should be treated as property for income tax purposes, which caused a bit of a headache for individuals who transact in large amounts of the currency. But, for merchants who accept bitcoins, there are tax issues as well. For example, how does one comply with sales tax regulations? 

One solution to that dilemma has come from Avalara, Inc., a company that offers a cloud-based solution that calculates sales tax for businesses, even when those sales are conducted using bitcoins.

Sales tax regulations can be complex to begin with, but adding in a wild card like bitcoin can add new wrinkles. The solution, according to a spokesperson from Avalara, is designed to make compliance with tax regulations as simple as possible. 

Avalara is clearly trying to get ahead of the curve here, as bitcoin is at a bit of a crossroads. If it can shake some of the issues that have plagued it recently, the currency is poised to become a huge factor in the economy of the future. If that happens, then Avalara’s solution should be well received by companies that wish to welcome the currency but wish to make their accounting matters as simple as possible.

You can follow the author Rich Steeves on Twitter by clicking here.

The New Focus of Estate Planning

Bob Carlson for Investing Daily writes: Estate planning’s been in turmoil for more than a decade, but the tax law is settled and the new rules and strategies are clearer. The turmoil began with the 2001 tax law that made multiple changes over 10 years and then scheduled a reversion to the 2000 law. Then, a 2010 deal temporarily eliminated the estate tax for most of us for two years. That change, with some modifications, became permanent in 2013.

Less than one half of one percent of estates of adults who pass away in 2014 will incur the federal estate tax, estimates the Tax Policy Center. That’s because each person has a $5.34 million lifetime estate and gift tax exemption that will increase with inflation each year. In addition, the portability rules allow married couples a true doubling of the individual exclusion.

Don’t conclude, as many have, that you don’t have to worry about taxes in estate planning because of the estate tax break. Taxes should figure in your estate plan as much as ever but in a different way. Your plan should focus on two areas other than federal estate taxes.

The first area is the non-tax features of the plan. You need a financial power of attorney, advance medical directive, trusts to protect assets from waste or creditors, and other protections for your wealth. I’ve had detailed discussions of these and other non-tax factors in the past.

The second area, which we’ll delve into in this visit, is a fresh and different focus on tax planning.

Instead of being focused on the federal estate tax, most of us now should focus on reducing capital gains and income taxes over the long term. We also need to plan for state taxes on income, capital gains, estates, and inheritances.

Here’s the key tax issue now. When property is included in your estate, most of the time the tax basis of the property is increased to its current fair market value. For example, let’s say you purchased mutual fund shares for $10,000 years ago and they now are worth $20,000. If you sell today, you’ll pay capital gains taxes on that $10,000 gain. If you give the property to your children to remove it from your estate, which used to be the recommended strategy, they’ll take the same $10,000 tax basis you had and eventually have to pay capital gains taxes on that gain when they sell.

Continue to hold the fund shares, however, and they’ll be included in your estate. The tax basis will increase to their fair market value at that time. The estate or your heirs who inherit can sell them immediately and owe no capital gains taxes. They receive the full value of the shares, not an after-tax value. Or they can continue to hold the shares. Eventually when they sell, they’ll owe taxes only on the appreciation that occurred while they owned the shares.

Bottom line: The longtime rule to remove assets from the estate through direct gifts or transfers to trusts might not be the best advice today. It might be better to hold appreciated assets. You’ll avoid federal estate taxes unless your estate is very valuable, and you’ll avoid capital gains taxes on the appreciation.

Your estate’s tax planning strategy should consider all the taxes that might be imposed on an asset. There is the federal capital gains tax, plus any similar tax your state imposes. There also are the stealth and add-on taxes that increase as income rises, including the 3.8% net investment income tax and Medicare premium surtax, taxation of Social Security benefits, reductions in itemized deductions and personal exemptions, and the alternative minimum tax. All of these might be avoided by your family when you hold appreciated assets and have them included in your estate, so the family can increase the basis and avoid capital gains taxes.

Even wealthy people who might have part of their estates subject to the federal estate tax should reconsider the extent to which they want to remove assets from their estates. These other taxes cumulatively could total more than the maximum 40% federal estate tax, especially if your state doesn’t have its own version of the estate tax.

Holding assets in the estate isn’t the ideal strategy in every case. If your state is one of the 19 plus the District of Columbia that has some form of estate or inheritance tax, you need to compare the state tax from holding the asset in your estate to the income tax that would be owed if you transferred the asset now to a loved one.

Remember to consider the income tax rate your beneficiary would pay, not that you would pay. For example, if you live in a state with an estate or inheritance tax but your children live in a state without an income or capital gains tax, you might save money by giving appreciated property to them now instead of holding it in your estate.

The tax planning is more complicated now. You need to evaluate each of the potential taxes that would fall on each asset before deciding whether or not to give property now.

Prime candidates to be held in your estate are appreciated investments and your personal residence.Depreciated investment and business real estate also would avoid income and capital gains taxes by remaining in your estate. Appreciated art, gold, and collectibles are likely to be worth holding in the estate because they are subject to a 28% maximum capital gains tax. Any patents, trademarks, and copyrights created by you also are good to hold in the estate, because your tax basis is likely to be zero but a beneficiary of the estate might be able to increase the basis.

On the other hand, there’s no tax reason to hold cash. Also, variable annuities and qualified retirement plans (including IRAs and 401(k)s) don’t receive an increased basis after the owner’s death. All the distributions will be treated as ordinary income whether taken by you or your beneficiary. You might save money by taking distributions and paying those taxes now instead of later.

The new law also created some unexpected costs for people who executed estate plans under the old law.

Suppose you planned under the previous law by transferring assets to an irrevocable trust to remove them from your estate. The trust and beneficiaries have the same tax basis in the assets that you had. That was fine under the old law, because the potential estate taxes were higher than capital gains taxes. But now the trust can be viewed as an unnecessary expense. It doesn’t save estate taxes and doesn’t allow your heirs to increase the tax basis of the assets.

You might be able to take actions to reduce taxes in these cases, if the trust terms allow it.

One strategy is to exchange assets with the trust. Take highly appreciated assets out of the trust and replace them with other assets of equal value that don’t have as much built-in gains. Estate planners call this decanting.

It also might be possible to change the trust terms so that you are considered the owner and the assets are included in your estate for tax purposes only. New trusts can be written to ensure the assets are included in your taxable estate. The most common way to do this is to retain a general power of appointment over the assets so that you can change the beneficiary at any time.

Today’s estate tax law requires a different approach to planning. Strategies that once were cutting edge now might be unnecessary or costly. Review your existing plan and meet with your planner to adjust it for the latest law.

Bob Carlson is editor of the monthly newsletter and web site, Retirement Watch and managing member of Carlson Wealth Advisors, L.L.C.

Financial Planning: Inherited annuities can be taxing

Ken  Petersen for the Monterey Herald writes: Question:  When my mother died, I learned that her bank had sold her two annuities. I am the beneficiary of one of them and a local charity is the beneficiary of the other. What are annuities, and what are the income tax ramifications when they are inherited, both for me and the charity?

Answer:  Annuities are insurance products sold by licensed insurance agents working in banks, brokerage firms and insurance agencies. Sales of individual annuities reached $230 billion in 2013, according to LIMRA International, a worldwide association that provides research to insurance and financial services companies.

There are two broad categories of individual commercial annuities, fixed and variable. There are numerous variations and options for each type, which can be very confusing. In simple terms, when you purchase a fixed annuity you pay the insurance company a certain amount of money in exchange for a fixed rate of return. If you purchase a variable annuity, then you can select investments inside the annuity that are similar to mutual funds. The return on your investment depends upon the performance of those funds. For both fixed and variable annuities, you can buy an immediate version or a deferred version. Immediate annuities begin making payouts right away over whatever time period you select at time of purchase. Typical time periods include your single life, your joint life with your spouse, or a certain number of years. When the selected time period is over, the annuity payout ends and the annuity contract has no value. Deferred annuities do not begin payouts right away. Instead, they accumulate value. At some time in the future, when you are ready for income, you can end the "accumulation" phase and begin taking guaranteed payments.

Tax deferral is a big advantage of an annuity. Like money in a retirement account or IRA but unlike most conventional investments, the money that an annuity earns compounds with no immediate tax consequence. You don't pay income tax until you withdraw the money. Also, like retirement accounts and IRAs, when you die your beneficiaries inherit your annuity's tax basis and become responsible for any income tax due on withdrawals. The taxable portion of an inherited annuity (technically referred to as IRD or "Income in Respect of a Decedent") is the value of the annuity contract less the cost basis (usually the amount invested) in the contract. If the beneficiary is a qualified charitable organization, it does not pay any income tax.

A popular estate planning technique is to leave conventional assets like stocks and real estate, which receive a step-up in cost basis at death, to your children or other loved ones and to designate a charity as the beneficiary of a retirement plan, IRA or annuity. If you want to leave part of an IRA or annuity to your children you can try to split it into two or more accounts. IRAs are easy to split. Annuities can be more of a challenge. After a split, you can designate a charity as beneficiary on one of them and your children on the others. When you leave an IRA or annuity to a charity, you remove its value from your taxable estate and save your loved ones from some potentially onerous income tax consequences.

Kenneth B. Petersen is an investment adviser and principal of Monterey Private Wealth Inc. in Monterey. 

Mobile POS, NCR Silver™ Makes Accounting Easy with Simple Tools and QuickBooks® Integration

NCR Corporation (NCR), the global leader in consumer transaction technologies, today announced that the NCR Silver iPad® point-of-sale (POS) system for small business has been integrated with Retail Intel, a cloud-based service that automatically pulls sales data directly from the NCR Silver platform to QuickBooks®.

By eliminating the need for time-consuming daily journal entries, the integration will save businesses countless hours on manual tasks and significantly improve operational efficiency and accuracy.

This new solution adds to NCR Silver's existing market-leading features, which save small businesses time and money, including:

Shift Management and Cash Reconciliation, which work seamlessly allowing small businesses to track cash flow across multiple devices. Owners can easily view reports from anywhere using Silver's online and mobile dashboards.

Time Clock, which makes it easy for employees to clock in and out from the POS or any other mobile device running NCR Silver—this allows merchants to keep accurate employee timecards and easily export them for payroll processing.

Multiple Tax Options, which help streamline accounting processes. Silver provides flexibility to configure tax rates, including jurisdictions, as well as multiple tax locations for mobile businesses too. Viewing and exporting detailed tax reports is convenient. Simply set a timeframe and run a report.

Operators wanting more from their POS will find that these simple and easy-to-use accounting tools make NCR Silver a perfect fit for any small business.

"We're working hard to continue to help our customers get more out of their point of sale," said Justin Hotard, general manager, NCR Silver. "By adding tools to the NCR Silver platform that help our merchants manage their everyday operations, we provide the peace of mind that every small business owner needs."