Wednesday, May 21, 2014

Work from Home? You May Qualify for These Tax Deductions

 jvicious for SkipTheDrive.com writes: If you regularly work from home, you not only save gas money, but you may be able to save on your taxes, too. While not all taxpayers who occasionally work from a home office will qualify, it’s worth looking into the potential savings you’ll find with these tax deductions.
Tax Deductions Aren’t Limited to the Self-Employed Many people assume tax deductions are intended to benefit small business owners who run companies out of their homes, but self-employed taxpayers, freelance workers, and employees may qualify.According to the IRS, there are six things you should keep in mind when considering the Home Office Deduction:
  • You must use a portion of your home exclusively and regularly to conduct business.
  • With storage, rental, and daycare businesses, you must use the areas regularly but not necessarily exclusively.
  • The amount of your deduction is based on the percentage of your home used for your business, and is limited if your gross income is less than your total business expenses.
  • Special rules apply if you are providing daycare or storing inventory or samples.
  • Self-employed taxpayers should use Form 8829 to calculate their deduction, which is then reported on your 1040 Form on line 30, section C.
  • Additional rules apply for employees who telecommute, especially if they must do so for the convenience of their employer.
It’s Getting Easier to Claim Your Work from Home Deduction Some of those who telecommute hesitate to claim the deduction because the form itself is daunting. With 43 lines, Form 8829, Expenses for Business Use of Your Home, seems insurmountable, especially when the IRS expects you to allocate expenses, depreciation, and carryovers from other deductions. In fact, it could be reason enough to hire a professional to complete your taxes. Thankfully, starting in 2013, the IRS allows those who work from home to claim a deduction of $5 per square foot of space used, up to a total of 300 square feet (or $1,500 total) without doing any complex calculations. The tradeoff? The IRS notes the average work from home deduction is $3,000, which means you may leave money on the table for that convenience.
Make Sure Your Home Office Isn’t a Multi-Use Space Whether you’re a stay-at-home mom or a home-based sales rep, you know the value of the square footage in your living space. While it may make the family happier to occasionally use your home office as a game room or bedroom for overnight visitors, the IRS generally expects the space you claim will be exclusively used either as a principal place for you to conduct business, or as a place where you routinely meet with customers or other clients. Less stringent rules apply if you work remotely out of a separate structure at your home, such as a converted detached garage.   Not only can you make a great living working from home, you may also find substantial savings with these tax deductions and by cutting out expenses, such as gas and parking, which are associated with a more traditional work environment. That’s all the more reason to explore your freelance and work from home opportunities today.
Posted on 12:43 PM | Categories:

IRS and Free File Alliance Sign One-Year Renewal of Partnership

The Internal Revenue Service and the Free File Alliance, have signed a one-year extension for their partnership that makes free tax software available to the nation’s taxpayers.

Free File is the free federal tax preparation and e-file service offered through brand-name software or online fillable forms. The software is available for taxpayers who earn $58,000 or less, which is 70 percent of taxpayers. Free File Fillable Forms is available to taxpayers who earn more than $58,000 and who are comfortable preparing their own federal return.
More than 3 million taxpayers have used Free File so far this year – a nearly 10 percent increase and the first double-digit increase in program usage in several years. Much of this increase is attributable to a new look and feel for the IRS Free File web site, redesigned to make it easier for taxpayers to find the information they need and route to the software they want.

"Free File has helped millions of taxpayers prepare their taxes, and we look forward to continuing this important program," said IRS Commissioner John Koskinen. "The Free File program saw increased use this year, a reflection of the value of this innovative effort."
The extension agreement includes specific language that a full renegotiation of the five-year Agreement/Memorandum of Understanding will begin in June. The IRS and the Free File Alliance currently intend to enter into a multi-year agreement prior to the expiration of this extension.

The current five year agreement expires in October.  The one-year extension provides the IRS and FFI time to shape a longer term agreement to include innovations to the twelve year old Free File program in order to grow e-file, improve quality and reduce taxpayer burden.    
Free File has played a key role in IRS’ strategy for growing e-file.  Nearly 43 million taxpayers have used Free File since it debuted in 2003. Using a conservative $30 tax prep fee, this means Free File users have saved nearly $1.3 billion.

Free File is still available through October 15 for extension filers atwww.irs.gov/freefile.
Posted on 12:32 PM | Categories:

Paychex Accounting Online

Kathy Yakal for GadgetGigs.com writes: Paychex Accounting Online was only released in late 2013, but the two integrated applications that comprise it have been around for a lot longer. The core accounting application is Canadian service Kashoo, which is now available as an integrated bundle with Paychex Online Payroll. The Paychex brand is more than 40 years old, however, and is quite familiar to the business community. Its payroll, human resources, and benefits-outsourcing solutions are well respected and used by more than a half-million U.S. businesses. Kashoo, on the other hand, is comparatively new; it’s a solid double-entry accounting website that’s easy to understand and use. But Paychex Accounting Online (from $27 per month, plus fees) lacks many of the features found in its competitors, such as purchase orders, comprehensive contact records, item tracking, and transaction categorization.

The hybrid approach is a great example of the evolving nature of small business accounting as it moves into the cloud. Some companies, like Intuit and Xero, provide a core accounting solution and a payroll processing application that are integrated seamlessly. Other organizations are partnering with one another and integrating related sites, as is the case with Paychex Accounting Online. This has been happening for years already, the best example probably being the Intuit App Center, which has hundreds of add-ons that extend the usefulness of QuickBooks desktop and QuickBooks Online Plus, in areas like CRM, billing and invoicing, and time/expense management.


Receivables and PayablesPaychex Accounting Online would best serve small businesses with modest accounts receivable and payable needs, but which need true double-entry accounting without having to understand the background debits and credits. It comes with a customizable Chart of Accounts (best customized by an accounting professional, who you can invite to watch over your activity) and standard financial reports: Balance Sheet, Profit and Loss, and Trial Balance. You can export these to PDF, Excel, CSV, and HTML formats. You can enter transaction adjustments, but dealing with debits and credits is best left to your accounting professional.
The site doesn’t use the term “accounts receivable.” Rather, you click on the “Income” tab to open your options there. You can enter miscellaneous income, an invoice, or a payment. A record template for your customers contains very simple contact information, with a few other drop-down lists for variables like Terms and IncomeAccount. The invoice template is roughly comparable to those offered by competitors in that it includes the basic fields for things like sales tax, terms, and due date. And you can email them to customers.
But you can’t assign invoices to categories like salesperson, division, or location, nor can your customers return a payment via credit card (there’s no support for merchant accounts). There’s no tracking of inventory levels (though a basic item record is available) nor alternative pricing (discounts, etc.). The only report offered here is Aged Receivables, whose only customization option is the end date.
The level of detail and customization is similar for accounts payable, or “Expenses.” You can fill in a form outlining an expense or bill, and record payments. Vendor record templates will serve simple businesses well, but they’re not as detailed as Xero’s, for example. Aged Payables is the sole report available here.
Banking in the CloudThe best online accounting and personal finance solutions (in fact, most of them, period) let you connect to the financial institutions where you have accounts and download transactions. Paychex Accounting Online is no exception. You simply select the name of your bank or credit card company and enter your login credentials for those sites. Paychex Accounting Online then makes a connection and does the initial download. You can also upload bank statements manually.
You can, of course, enter income and transactions manually, too. And you can transfer funds among accounts. But Paychex Accounting Online doesn’t offer the more sophisticated, ongoing bank reconciliation feature that Xero and QuickBooks Online Plusdo. It works similarly to reconciling on paper. You have to put a check mark in front of all transactions on the site that appear on your paper statement, plus mark off your online transactions on your bank statement. This seems like duplicate data entry, which online accounting was supposed to avoid.
A Logical WorkflowPaychex Accounting Online was clearly designed with the non-accounting professional in mind. Its user interface is clean and uncluttered, and uses language that laypeople would understand. The left vertical pane contains text links to every element of the site. First, of course, is the Dashboard, which is a little atypical for this type of website. The center of the screen, which normally holds key business numbers, contains two tabbed windows: one for entering income and another for expenses.
This layout is similar to what you see when you click on the individual Income and Expense links, though the Dashboard doesn’t display transaction history in the lower part of the screen. Your real-time business data–primarily account balances–appears in the right vertical pane. And there are no charts or graphs.
Links to other areas of the site appear in the left vertical pane. Unlike online accounting solutions that are more complex, Paychex Accounting Online is uncomplicated enough that everything is spelled out in this pane, even the individual reports (which are few). Click on a link, and the main working screen for that activity appears, rather than presenting another menu of sub-links.
The Paychex ConnectionWhile competing online accounting sites have slowly built their own well-integrated payroll applications, Paychex went the other direction. It built a new solution by facilitating the integration of Paychex Online Payroll with existing accounting service Kashoo, as mentioned earlier. You enter payroll information in the Paychex application and then import it manually to the accounting side. Payroll tax calculation and filing/payment are supported. Paychex does not publish prices; rather, you must ask for a quote.
Paychex Accounting Online is not a difficult site to learn fairly quickly, but anyone new to accounting will likely require some clarification and assistance, despite the app’s standard English approach to it UI—it’s just the nature of the accounting beast. The site supports users with a variety of help resources, including videos, webinars, online articles, chat and phone. Mobile access is available for both applications on iOS devices, but Android support is limited to the payroll app itself.
It’s good to see financial solution providers teaming up to give businesses application bundles that make sense. If you already use Paychex payroll services and want to marry them to very basic double-entry accounting functions, Paychex Accounting Online is certainly worth considering. At this point, though, if your company needs more functionality than Paychex Accounting Online offers, as well as complete, smoothly-integrated payroll processing, QuickBooks Online Plus, PCMag’s Editors’ Choice for online accounting, is a better choice.
Posted on 7:06 AM | Categories:

MYOB upps cloud stakes with purchase of Online Document Collaboration Start Up Dovetail. / Dovetail to enhance MYOB client portal & document management offering

Dovetail to enhance MYOB client portal & document management offering
Australia’s leading business solutions provider MYOB has announced the purchase of Dovetail, an innovative start-up that provides online document collaboration solutions for accountants.
The deal is a key move to strengthen MYOB’s connected accounting vision by making cloud accounting easier for accountants and their clients.
General Manager Accountants Division Adam Ferguson says the acquisition will deliver tremendous value to both accountants and their clients, “MYOB’s focus has been on bringing accountants and clients closer together with the vision of the common ledger, which enables real-time collaboration on financial data in the cloud.
“The purchase of Dovetail is the next step in our vision of helping accountants move online, and working closer together with their clients. This will enable MYOB to deliver an enhanced collaboration platform for accountants. The platform will extend the accountants capabilities beyond financial data management to deliver an integrated, collaborative experience through intuitive workflows, document management, work approvals and more. The outcome of this integrated workflow is improved accuracy, superior turn-around time, reduced data-entry, increased client participation, and increased revenue for the practice,” he says.
“Together, MYOB and Dovetail have a distinct competitive advantage in delivering our connected accounting vision to bring more accountants online. We service more than 1.2 million client businesses and over 40,000 accountants and other partners across Australia and New Zealand. We invest more than $35 million a year in market-leading research and development because we’re committed to understanding the needs of accountants and their clients. We work alongside them to make their business life as easy as possible.”
Craig Stanmore, CEO & Director of Jaques Stanmore Financial Group says an online collaboration platform would significantly enhance their client relationships, saying, “As an accountant the relationship with our clients is paramount. An online collaboration platform is a tool that will exponentially increase contact points with clients.
“From their perspective, providing them with one place of reference for most of their business financial interactions will simplify their financial world, saving them time and allowing them to focus more on their business and ultimately their goals. From our perspective as an accountant, the increase in connection to our clients will lead to more client engagement allowing us to seamlessly partner with the client to achieve their goals. This also gives us the opportunity to transform our service offering from ‘informing and compliance’ to ‘advisory and coaching’ assisting clients toward growth and their aspirations.”
Aimee Campbell, Associate at Brentnalls SA says, “Using an online collaboration platform will allow our clients to have greater access to their information in a real-time environment, which will help us to assist them in gaining a better understanding of their business, which is our aim.”
MYOB is already developing online versions of its existing MYOB practice solutions for accountants, and in the last year launched a range of online solutions that accountants can take advantage of:
  • MYOB Practice Cloud Partner Program, which enables accounting firms to move their MYOB Accountants Enterprise and Accountants Office practice solutions to the cloud via accredited Australian IT/cloud hosting providers.
  • MYOB Accountants Office OnTheGo and MYOB Accountants Enterprise OnTheGo – a browser-based interface that enables accountants to access their practice management data from anywhere via a web browser, including mobile devices.
  • MYOB Essentials Cashbook – an online solution that enables accountants to allocate a client’s financial transactions for accounting purposes while managing the level of client involvement.
The company will continue to enhance its existing product suite with online offerings for accountants in practice as it expands its software development and in-field teams (the latter increasing on what is already the industry’s largest).
Dovetail was founded in 2011 by Rob Cameron, who worked for MYOB in 2006 as a product strategy manager for five years within the accountants division. As a qualified accountant, Cameron’s extensive industry experience includes establishing ‘Innovate’, a provider of document management solutions such as Level 31, and consulting for accounting and business advisory firm PKF Australia. As a senior product manager for MYOB, Cameron will work across the business in developing integrated solutions for accountants and their clients.
Posted on 7:05 AM | Categories: