What to do if you're affected by TurboTax changes Feeling gouged? Here are your options.

Tobie Stanger  for Consumer Reports writes: TurboTax has changed the features on its downloadable software and CD-Roms, effectively boosting the price significantly to complete certain IRS schedules, and causing a small firestorm among customers. The changes:

• TurboTax Basic (downloadable without state tax forms on Amazon for $9.99) no longer includes IRS Schedule A, which covers itemized deductions like home mortgages. They’ll have to buy TurboTax Deluxe (downloadable from Amazon for $38.69).
• TurboTax Deluxe no longer supports Schedules D, which covers capital gains and losses, or Schedule E, which covers supplemental income and loss. Customers will have to purchase TurboTax Premier (downloadable with state tax forms from Amazon for $74.99).
• Folks who need Schedule C, which covers self-employment income, will have to use TurboTax Home & Business (downloadable with state tax forms at Amazon for $84.99).

What you can do if you've already purchased TurboTax

Contact TurboTax at www.turbotax.com/support and ask for a refund. When I asked a spokeswoman whether customers could get a refund, she said: “We’re working with customers who contact us on a one-on-one basis to resolve their unique situation to their satisfaction. And we always stand behind our 100% satisfaction guarantee if a customer requests a refund.”

Switch to H&R Block’s tax software. Block is offering free tax prep and filing using comparable H&R Block software to disgruntled TurboTax clients.

Other options:

Use a free online provider such as TaxACT. The federal portion of TaxACT is always free, and supportsSchedules C, D and E. You’ll have to pay to file your state tax form, but TaxACT’s state pricing is quite competitive: $9.99 for the version that accompanies its free edition. As with all online tax-prep products, you can try it out for free; you’ll only pay for the state version of TaxACT when you’re ready to file.

Fill out the TurboTax forms without guidance (not recommended). You can override the TurboTax software and fill in the tax forms yourself without the guided tour; TurboTax Deluxe, Premier and Home & Business all will allow you to do that, but you’ll then have to print and mail your return, which defeats the purpose of guided tax software and gives you none of the benefits of electronic filing.

Consumer Reports' Income Tax Guide provides news and advice to help you save the most on your federal and state taxes.

Intuit, the maker of TurboTax, defends its changes by noting that it merely puts its software offerings in line with what it offers to online customers, who make up the bulk of its business. This year, the spokesperson noted, customers who purchase Premier or Home & Business will get free, personalized, “expert answers to your toughest tax questions,” by CPAs and enrolled agents. Those experts are available via phone and chat.

An Intuit representative told me a couple of months ago that very few people buy TurboTax downloads or CDs anymore. The spokeswoman’s statement today suggested to me that Intuit would like to move toward a totally online service: “As more customers move from TurboTax desktop to Online to mobile solutions, this change creates a more consistent experience across TurboTax products and platforms,” she said.

Cloud Accounting Startup Xero Moves Into Payroll With New Product In The US / Xero Launches Integrated Payroll for Small Businesses in Major US States

• Fully Featured, Affordable Payroll Within Xero Accounting Software With No Additional Fees
• Saves Small Businesses Hundreds to Thousands of Dollars Per Year
• File and Pay Taxes, and Employees Using One Platform
• 
  

Xero (@Xero) today launched its integrated payroll offering to support small businesses in the three top employer states in the US: California, Florida, and Texas. Xero's award-winning accounting platform now provides integrated payroll for electronic filing and payment for state and federal payroll taxes in these states. Xero aims to roll out payroll support to small businesses in all 50 states by the end of the year.

This launch demonstrates Xero's momentum in realizing its vision as an integrated platform for small businesses worldwide. It builds on Xero's success in offering payroll in other countries where it processes billions of dollars each month for tens of thousands of businesses. Over 40 percent of Xero's customers already use payroll software in countries where it is available.

Unlike complex and costly add-ons or services, Xero offers accounting and payroll as one easy-to-use solution for just $30 a month. Small businesses in the three states, along with their accountants and bookkeepers, can now use Payroll in Xero to save the hundreds to thousands of dollars each year.

Comments on the launch

• "Xero's global platform and approach allow us to develop and learn from other countries and we're excited to launch these innovations in the vast US market. We're building on our success in Australia where we process over AU$1.5 billion of payroll transactions monthly to over 375,000 employees. Plus we're building on the recent acquisition of Monchilla in the US and the scaling of our development teams globally. This is the start of a wave of product innovations launching early this year. These innovations will deliver on our vision of a fully integrated platform for small businesses to work and collaborate on," said Rod Drury, Xero CEO.
• "Switching to Payroll in Xero from manual payroll processing has already saved me over 45 hours in time a month. The launch of electronic filing and payment will add even further savings as it means that I'll never need to worry about costly state or federal penalties again," said Xero customer, Steve Chaney, CPA, Managing Partner, Chaney & Associates.

Avoid costly fines and penaltiesThere are approximately 5.1 million small business employer firms in the US with fewer than 20 employees. More than a third of all small businesses are regularly fined for payroll-related mistakes. Last year, the IRS issued nearly 7 million penalties, totaling $4.5 billion, to U.S. businesses for making payroll errors. Xero's electronic filing and payment will allow the 1.3 million small business employers* in California, Florida and Texas to easily meet their tax obligations without fear of missing key deadlines and incurring costly fines.

Xero's all-in-one solution shows true real-time view of financesWith the integration of its online accounting platform with payroll, Xero is unique in the market for its ability to track employee's vacation balances on the balance sheet as a liability. This means that when small businesses run payroll, Xero's accounting dashboard automatically updates to show a true real-time view of their cashflow balance minus employee salaries and wages and allowing for vacation balances. Payroll in Xero includes other key features such as integrated timesheets, full Paid Time Off (PTO) management, a self-service portal and flexible payroll schedules, all at no extra cost.

Attractive, All-Inclusive Pricing For $30 a month on a standard plan, small businesses get a fully featured accounting and payroll solution to support 5 employees. This includes direct deposit, timesheets, federal and state (CA, FL, TX) electronic tax services, and general ledger integration. Payroll in Xero is the most competitively priced all-in-one payroll and accounting solution on the market. The cost is $40 to $50 less than other "do-it-yourself" payroll options and $150 to $450 less than full service or "do-it-for-you" payroll providers.

Backed by No Wait SupportXero's award-winning support is different from the call center model. Users simply log any issues or queries inside the application and a qualified Xero specialist makes contact to resolve any problems. This means small business owners don't waste time waiting on the phone to talk to an inexperienced call center person. Actual Xero staff provide support in their country of business ensuring relevance for the user. Over the past year, Xero has continued to scale its US-based customer support teams in San Francisco and Denver.

Additional Information:

• Learn more about Payroll in Xero
• Watch the Payroll in Xero video
• View the Pain of Payroll infographic and how to get relief
• Sign up for a webinar on Payroll in Xero for Small Businesses and Accountants on Jan 19, 2015
• Follow @Xero on Twitter
• Like Xero on Facebook
• Visit Xero's blog

About XeroXero is beautiful, easy-to-use online accounting and payroll software for small businesses and their advisors. The company has over 400,000 paying customers in more than 180 countries. Xero seamlessly integrates with over 350 add-on business applications, and was recently ranked No. 1 by Forbes as the World's Most Innovative Growth Company.

Is Your Credit Card Interest Tax-Deductible?

Kimberly Rotter for Credit Sesame Daily writes: With tax-time right around the corner, many of us are looking for ways to reduce our liability to Uncle Sam. For consumers who carry a balance, credit card interest can be a significant expense throughout the year. Is credit card interest a line item we can use to lower our taxable income? Yes and no.

When credit card interest is tax deductible

On any credit card that is used solely for business purposes, the interest is tax deductible. Each purchase must qualify as a business expense under the IRS’s rules. Deduct purchases in the year the purchase is made. Deduct interest in the year you pay it.

When credit card interest isn’t tax deductible.

Credit card interest incurred for personal expenses is not tax deductible. The IRS calls this “personal interest” and offers no tax benefit.

Interest paid on a personal auto loan, on appliances or furniture, on medical procedures and on person-to-person loans is also considered personal interest and is not deductible. Interest paid on a mortgage, however, is deductible. And interest for an auto loan that is strictly for business use is also deductible.

When it gets messy

Like any other expense, if it is partly for business and partly for personal use, credit card interest is deductible in the same proportion as the amount used for business purposes. For example, if you take a loan and use 75 percent of the funds to buy business equipment and 25 percent of the funds to take a family vacation, 75 percent of the interest is deductible. On a credit card, a more common scenario is that a percentage of purchases are business-related and a percentage are personal.

If you use the same credit card for personal and business use, you are legally entitled to deduct the interest paid on business purchases. But a taxpayer who regularly comingles accounts and expenses will have a hard time calculating the correct amount of interest to deduct without fairly advanced math skills. Interest on personal expenses charged to a business card is not tax deductible just by virtue of being on a business card.

More tax deduction tips

Deductible non-business interest. The IRS allows individuals to deduct the interest paid on home loans (mortgages and home equity loans) and student loans. Also, interest paid on money borrowed for the purchase of investment property is tax deductible.

Fees and charges. The annual fee, ATM fees, foreign transaction fees, maintenance fees and many other bank and credit card fees are also tax deductible, so long as the account is used for business purposes.

Other business deductions. Self-employed people can deduct a number of expenses that employed taxpayers cannot, including mileage to and from work-related locations away from the home office, and even a portion of the home’s utility costs.

One final tip. The credit card does not have to be designated a business card by the card issuer in order to qualify as a business account in the eyes of the IRS. The consumer can call any credit card a business card. Keep receipts in case of an audit, and again, use the business card only for business expenses.

Talk to a licensed tax professional about what deductions are appropriate for you.

Do I have to file a tax return?

Barry Dolowich for the Monterey Herald writes:  Question:  After graduating college last spring, I earned about $7,000 during 2014. I also have a little stock income from some money my grandparents gave me years ago. Do I have to bother filing 2014 tax returns?

A A tax return must be filed for each year by a U.S. citizen or a resident alien who has at least a specified minimum amount of gross income. The income levels at which individuals must file income tax returns for 2014, even though no tax is owed, are generally as follows:

If you are under age 65 at Dec. 31, 2014, single individual $10,150; married individual filing separately $3,950; married couples filing jointly $20,300; head of household $13,050; qualifying widow(er) $16,350.

If you are age 65 or older at Dec. 31, 2014, single individual $11,700; married individual filing separately $3,800; married couples filing jointly-one over 65 $21,500; married couples filing jointly-both over 65 $22,700; head of household $14,600; qualifying widow(er) $17,550.

If on Dec. 31, 2014, a married couple did not share the same household or if some other taxpayer is entitled to a dependency exemption for either spouse (e.g., a married student who is supported by a parent). In such a case, a return for 2014 must be filed if gross income equals $3,950 or more.

If someone else can claim you as a dependent, you must file a return if you have any of the following:

• Earned income more than $6,200

• Unearned income more than $1,000

• Gross income more than the larger of $1,000 or earned income (up to $5,850) plus $350

Higher limitations apply if the dependent is age 65 or older, blind or both.

Even if the income levels noted above are not reached, an individual is required to file a return if (1) net earnings from self-employment in 2014 are at least $400, (2) FICA and/or Medicare taxes are due on tip income not reported to the employer or on group life insurance, (3) liability for alternative minimum tax is incurred, (4) tax on an IRA or a qualified retirement plan is due, (5) tax is due from the recapture of an investment credit, a low-income housing credit, etc., or recapture tax on the disposition of a home purchased with a federally subsidized mortgage, or (6) wages of $108.28 or more were earned from a church or qualified church-controlled organization that is exempt from employer FICA and Medicare taxes.

The income-level test applies to gross income and not to adjusted gross income. Also, any person required to file an income tax return must report on that return the amount of tax-exempt interest received during the year.

Tax refund alert — Many people that fall below the gross income levels listed above choose not to file, and thereby inadvertently forfeit potential refunds from Form W-2 withholding taxes or the earned income credit.

Tax filing alert — Many people sell stocks, bonds or mutual funds at a loss and incorrectly assume they may not be required to file a tax return because they do not owe tax. However, the IRS receives information on the sales proceeds and will assume a zero cost basis unless a tax return is filed reporting the sales transaction.

Tax Form 1040: The Basics U.S. Individual Income Tax Return

US Tax Center writes: For the majority of Americans, the most commonly used document for filing a tax return is IRS Tax Form 1040. This form is due by April 15each year.

While there are many supplements (i.e. schedules) for Form 1040 that calculate specific tax deductions and credits, most individuals will use Form 1040 as the basis of their income tax return.

Here is what’s covered on Tax Form 1040:

Basic Taxpayer Information

The first portion of Form 1040 is dedicated to collecting basic information about the taxpayer. This includes the name of the filer and their Social Security Number (SSN), plus the same for their spouse if they are filing jointly. In addition, you will need to provide other identifying information about yourself, including:

• Address: This must be a physical address, not just a mailing address.
• Filing Status: Indicate whether you are filing as single, married filing jointly, married filing separately, head of household, or qualifying widow/widower.
• Exemptions: List your personal exemptions, which includes one for yourself and your spouse (if married filing jointly), and one for each of your dependents.

Yearly Income Calculation

The next portion of Form 1040 calculates your income for the year. You will first report the income you received, and then make allowances for certain tax credits and deductions to arrive at your Adjusted Gross Income (AGI). For the income calculation, you must provide your total income from all sources, including:

• Wages
• Taxable interest and dividends
• Business income
• Alimony
• Unemployment compensation
• Pension, IRA distributions, or Social Security benefits

Note that many people do not have to make any adjustments to their total income, which means their AGI will be the same number.

Taxes, Credits, and Payments

Once your AGI is calculated, it is reduced by the amount of your standard deduction (or itemized deductions) and personal exemptions to arrive at your taxable income (Line 43 of Form 1040). Your tax liability is based on your taxable income.

After determining your taxable income, you must factor in any tax credits (e.g., the Child Tax Credit) and additional taxes (e.g., self-employment tax). Then you will calculate your “total tax” by multiplying your taxable income by the applicable tax rate.

Your total tax may be reduced by certain items in the “Payments” section of Form 1040. These can include the following:

• Federal income tax withheld
• Estimated tax payments
• Earned Income Credit (EIC)
• Additional Child Tax Credit
• American Opportunity Tax Credit (AOTC)
• Amount paid with request for extension to file

Tax Refund / Amount You Owe

The last section of Form 1040 establishes the total taxes owed or refund due. If a tax refund is due, you can provide your bank account information to receive your money from the IRS via Direct Deposit.

Finally, don’t forget to sign and date your tax return!

Resources

IRS Tax Form 1040 (U.S. Individual Income Tax Return): PDF

IRS Tax Form 1040 Instructions: PDF

IRS Publication 17 (Tax Guide 2014: Your Federal Income Tax): PDF

2015 Small Business Payroll Software with the Ability to Calculate Withholding, Create Pay Stubs, Print Checks and Generate W-2s Released by PayrollMate.com

2015 Payroll Mate® software is designed and priced to meet the payroll processing and tax compliance needs of small businesses including nonprofit organizations, startups, home-based businesses, young entrepreneurs, online businesses, self-employed & independent contractors, franchise businesses, women / veteran-owned businesses, farms, restaurants, churches, and many more. 

Free trial download of the 2015 system is available at http://www.Payroll-Mate.com/ . Users can purchase the software and receive it instantly.

Payroll Mate is simply one of the easiest to use computerized payroll system packages in the US market. The paycheck software steered away from over complicating the payroll management process and keeping the computer knowledge required to use the application to a minimum. The philosophy of Payroll Mate software makers is to keep things simple while providing a powerful and complete solution at an affordable price. Payroll Mate is trusted by thousands of businesses and tax professionals nationwide.

Payroll Mate currently supports the following federal and state payroll tax forms:

- Form 941: Employer's Quarterly Federal Tax Return.

- Form 940: Employer's Annual Federal Unemployment (FUTA) Tax Return.

- Form 944: Employer's Annual Federal Tax Return.

- Form W-2: Wage and Tax Statement.

- Form W-3: Transmittal of Wage and Tax Statements.

- California DE 9: Quarterly Contribution Return and Report of Wages.

- California DE 9C: Quarterly Contribution Return and Report of Wages -Continuation.

- Texas C-3: Employer's Quarterly Report.

- Texas C-4: Employer's Quarterly Report Continuation Sheet.

- New York NYS-45: Employer's Quarterly Tax and Wage Report.

- Illinois 941: Illinois Withholding Income Tax Return.

- Illinois UI-3/40: Unemployment Insurance Tax and Wage Reports.

- Florida Reemployment Tax RT-6.

For more details about Payroll Mate 2015 and to download free trial, visit http://www.Payroll-Mate.com/ .

Below is a summary of the features offered by Payroll Mate:

- Exports Payroll Data to QuickBooks software (can be used as QuickBooks Payroll Software).

- Exports Payroll checks to Quicken and accounting software like Microsoft Office accounting.

- Supports the following federal payroll forms: 941, 940, 944, W-2, W-3.

- Supports California, Texas, New York, Illinois and Florida State Forms

- Automatically calculates federal payroll tax and state payroll tax withholding.

- Supports different types of pay periods.

- Supports customizable income, tax and deductions categories.

- Supports income per mile and per piece.

- Supports fringe benefits.

- Generates comprehensive payroll reports.

- Handles payroll deductions.

- Exports payroll reports to Excel, CSV and PDF.

- FREE Payroll software demo helps businesses evaluate Payroll Mate before purchasing.

- Prints on Laser and Inkjet checks.

- Prints on preprinted red scannable W2 forms and W3 forms.

For more details visit http://www.Payroll-Mate.com/ 

CPA Website Design Basics: Acquiring New Clients

CPA Site Solutions writes: When you’re running a blog it’s easy to lose sight of your audience. As I settled down this week to discuss using internal links to direct traffic and search authority to certain pages I suddenly realized we haven’t talked about the basics in a LONG time. We’ll talk about links next week, but first… let’s let’s begin the year by reviewing some accounting website design fundamentals that we haven’t talked about in a while.

What Accounting Websites Can’t Do

No matter how great your website is it can never close the sale for you. You need to do that. And once you bring them on board you need to keep them there. This isn’t something that can be automated, but if you have the proper tools and you know how to use them, doing so becomesmuch easier.

What Your Website Can Do

Your website may not be able close sales for you, but it can certainly help make it easier. Once new clients are aboard it can also help you maintain your relationship by streamlining or even automating certain tasks. It can also help you cross-sell and up-sell off-season and upgraded services to your existing clients.

Closing a sale and maximizing customer retention is all about treating your clients like they matter and your website can help you do that.

It’s all about building Relationships

Your connections to your prospects and clients are personal relationships and need to be cultivated as such. This means finding things in common and nurturing those aspects of your relationship. It might be football, or music. It might be golf, the theater; it might even be something as simple as loving the same beer. It might be something intimate like frequenting the same place of worship or having kids in the same school. It could be literally anything. The only thing you can pretty much count on is it not being is accounting.

Find this connection, and then build the relationship from there. Once you have established it, don’t rest on your laurels. In time you will find new things in common and each time you will strengthen the bond with that client.

Using Websites to Cultivate Relationships

Content Management
The key here is having a website you can personalize and using it effectively. Add a Bio page and include personal information on it that your prospects might be able to connect to. It might seem counter-intuitive, but graduating first in your class is not likely to get you a lot of prospect calls. In fact it might even intimidate some people. Mentioning in your profile that you love golf or are a dedicated fan of a local sports franchise is much more likely to put prospects at ease and generate calls.

In order to do this you need to get a website that can be customized. A good accounting website must include an easy to use interface that will allow you to make these kinds of changes, upload pictures etc. This way you can not only make these changes yourself, your website can grow with your firm. You will be able to modify the site any time without having to pay costly design fees whenever your practice grows or your staff changes.

Don’t underestimate the value of pictures. A few strategically placed custom pictures can go a long way towards giving a prospect the sense of familiarity and comfort that will help him or her overcome their fear of change.

Interactive Financial Calculators
The awesome power of these neat little calculators as networking tools are almost universally unappreciated. Many websites for accountants don’t even offer them! Think about though… what better way to drive repeat traffic to your site and keep your brand in front of prospects than to offer them a huge library of free financial and tax planning tools. Even if they are happily involved with another CPA firm they will still use them, and in the long term when (for whatever reason) they need to break off their relationship with their current accountant you will very likely be the first person they call.

Email Marketing
An advanced email marketing system is a GREAT way to nurture relationships with clients and prospects alike. This isn’t just a Newsletter, although that’s an important part of it, but a system capable of importing client and prospect data including names and contact information andincorporating it into your mailings to make them feel more personal.

Think about it for a second!

You can create highly personalized emails sent directly to them by name, and even break your “blasts” up by subject (business owners, home owners, contractors, etc.) so recipients will only get emails related to their personal needs.

I think that’s enough for now. If you feel I missed anything or if you have any questions leave a comment below. Next we’ll talk about how your website can help you with client retention.

Intuit Launches QuickBooks Online Self-Employed to Serve Freelancers, Independent Contractors / 43% of US Workers Will be Self-employed by 2020, Led by Growth in On-demand Economy

Intuit Inc. (Nasdaq:INTU) is launching QuickBooks Online Self-Employed, a new product that makes it easy for the rapidly expanding population of freelancers and independent contractors to simplify their financial lives.

“That’s why we are expanding the QuickBooks Online (QBO) ecosystem with a new product that is tailor made to meet the needs of a new type of entrepreneur operating in a new economy.”

Research conducted as part of the Intuit 2020 Report, in partnership with Emergent Research, projects that 43 percent of the US workforce will operate as a self-employed business by 2020, led by an increase in the on-demand economy, such as ride-sharing, peer-to-peer rental, project-based job platforms, and online retail platforms. QuickBooks Online Self-Employed is specifically designed to make it easy for these freelancers to manage business and personal finances, handle taxes throughout the year, and meet compliance requirements.

“As the on-demand economy continues to expand, there will be unprecedented income opportunities for freelancers. But this work comes with a host of new challenges: co-mingled and confusing business expenses, quarterly and year-end tax headaches, and a general lack of visibility into their ‘real income’,” said Alex Chriss, vice president and general manager of Self-Employed Solutions at Intuit. “That’s why we are expanding the QuickBooks Online (QBO) ecosystem with a new product that is tailor made to meet the needs of a new type of entrepreneur operating in a new economy.”

“The on-demand economy gives entrepreneurs the option to operate independently while leveraging shared platforms and services,” said Steve King, partner at Emergent Research. “The transformative impact of this model of entrepreneurship is producing ripple effects across the labor force and the regulatory environment. QuickBooks Online Self-Employed is anticipating these trends and removing potential roadblocks for a rapidly expanding new class of worker.”

QuickBooks Online Self-Employed enables freelancers, independent contractors and home-based entrepreneurs to:

• Connect accounts: Import bank and credit card transactions to easily track income and expenses with no data entry required.
• Categorize by click: Mark a transaction as “business” by simply clicking a button, or swiping a finger across a mobile app, letting entrepreneurs instantly categorize IRS Schedule C deductions.
• Stack up savings: Track deductions all year round to help entrepreneurs save time and money.
• Simplify taxes: Calculate estimated quarterly and year-end taxes so there are no surprises in April.
• Count on security: Be confident that bank-grade encryption protects information, keeping it safe and secure.

Since launching in beta in the fall of 2014, QuickBooks Online Self-Employed has helped entrepreneurs track over $50 million in business expenses, helping them save money on their taxes and simplify their financial lives.

For more information about QuickBooks Online Self-Employed, please visit selfemployed.intuit.com. 

Quickbooks Online VP Hicks leaving INTUIT ?

Brayn Ray for DynamicsFocus.com writes: Terry Hicks is reportedly leaving Intuit after 15 years with the company. Perhaps more interesting is that Hicks has been VP and GM of QuickBooks Online since August 2013 and it would hard to name a job that has more prominence right now outside of the top executive ranks. 

Hicks has had some pretty hefty titles since joining the tax and accounting software company in February 2000. Intuit has been asked to comment, and so far has not responded. Reports are that SVP Dan Wernikoff sent a memo announcing Hicks' departure. He has had management jobs in areas that include QuickBooks, payroll, mobile ventures and small business product management. Before taking the QBO position, Hicks, was VP of global product strategy and management from July 2011 through May 2013 and he was VP and GM of global small business from July 2010 through July 2011. 

The rumor mill has not reported whether Hicks is leaving for another job or is being thanked by Intuit for his contributions. But that set of jobs looks like a pretty good start for someone who could end up running a company. With Intuit expecting to move from about 750,000 QB Online subscriber currently to 2 million in a couple of years, you'd assume that of top QBO person would be a job most people would want to keep unless something significantly better comes along.