What to do if you can’t pay your taxes

Bill Bischoff for US News Report writes:  As the filing deadline for last year’s 1040 looms ominously, you have two rational choices: Ship your 2014 return off by April 15 or get a filing extension by that date. This advice holds true even if you know you don’t owe any taxes — more so if you do but realize you can’t pay up on time. 

‘But I know I don’t owe’
Let’s say you are certain there are no additional federal income taxes due for last year. Maybe you had negative taxable income or coughed up your share via withholding or estimated payments. Now you are missing some records; are too darned busy at work; or have some other convincing (to you) reason for putting off filing. And you don’t want to bother with getting an extension either. No problem, since you don’t owe — right? Wrong. 

While it’s true there will be no IRS interest or penalties (these are based on your unpaid liability, which you say is zero), blowing off filing or extending is still a bad idea. Here’s why. 

• You may be due a refund. Filing a return gets your money back. No return, no refund.
• Until a return is filed, the three-year statute-of-limitations period for the commencement of an IRS audit never gets started. The IRS could then audit your 2014 tax situation five years (or more) from now and hit you with a tax bill plus interest and penalties. By then, you may not be able to prove you actually owed nothing. In contrast, when you do the smart thing and file a 2014 return showing zero tax due, the government must generally begin any audit within three years. Once the three-year window closes, your 2014 tax year is generally water under the bridge, even if the return had some warts. (We hope that was enough mixed metaphors for you.)
• If you had a tax loss in 2014, you may be able to carry it back as far as your 2012 tax year and claim refunds of taxes paid in 2012 and/or 2013. However, until you file a 2014 return, your tax loss doesn’t officially exist, and no refund claims are possible.
• There are other more esoteric reasons that apply to taxpayers in specific situations.

The bottom line is, you need to either file by April 15 or, perhaps more realistically, get an extension and file later when you have more time.
The IRS will automatically approve any request for a six-month filing extension to Oct. 15. Simply file Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return) by April 15. Completing it takes about two minutes. (Honestly.)
You don’t need to have a reason for asking for the extension, and signatures are not required. For example, if your spouse is vacationing in Greece or unavailable to sign for any reason, that’s no problem. The only requirement is the total 2014 income tax liability and any amount still owing (which could be zero) must be estimated with reasonable accuracy on Form 4868. 

‘I owe but don’t have the dough’ 
 
This is absolutely no excuse for not filing or failing to get an extension. Here’s why.

• If you file by April 15 but can’t pay, you should arrange for an installment agreement, as explained below.
• If you are not ready to file, just send in Form 4868 on or before the magic date.

Either way, you’ll successfully dodge the expensive (and totally unnecessary) 5% per month “failure-to-file” penalty — even though you didn’t pay on time. The only cost for taking this action is an IRS interest charge at a relatively reasonable rate (currently 0.75% per month, which amounts to a 9% annual rate) until you pay up. (The interest rate can change quarterly, so it may be higher or lower by the time you read this.) SNIP, the article continues @ US News Report, click here to continue reading....

Cloud-Based Billing Solutions in 2015 : Gigaom Research Report

 David S. Linthicum for Gigaom Research writes:  Executive Summary

Traditional paper invoices are surprisingly common, even in 2015. But such manual workflows make accounting governance and tracking difficult, and can lead to lost revenue and customer dissatisfaction.

Cloud-based billing solutions offer all the features of an enterprise billing application but without the IT involvement and budget. With subscription pricing, businesses can choose the features or bundle together what they need and avoid waves of hardware and software procurements. In addition to the cost savings and robust feature sets, this form of Software as a Service (SaaS) delivers rapid deployment and continuous upgrades. And for companies with complex pricing models, multitiered sales, distribution channels, and shrinking margins, a cloud-based billing solution offers a competitive advantage.

Types of cloud-based billing solutions increase each year. Small businesses have the choice of cloud-delivered accounting packages with billing capabilities such as FreshBooks, Bill.com, and Intuit’s QuickBooks. Common enterprise options, meanwhile, include RedKnee, NetSuite, Monexa, Aria Systems, Metra Tech, and Zuora. As adoption grows, accounting SaaS will follow the path of other players such as Saleforce.com, which evolved from a small startup to becoming the enterprise standard CRM.

This provides an overview of the cloud-based billing solutions market, its beneficial features, and what organizations should avoid. It also covers the existing players and how a company can compare requirements to their own capabilities.

Key highlights from this report include:

• Cloud-based billing systems are viable options for most enterprises, large and small, so long as they are willing to shift to an on-demand model. Those options can provide continuous system improvements, and are easier to configure and operate than traditional on premise options.
• Cost should be a core consideration. Since these are subscription services, prices can shift up significantly in the future. To hold down costs, enterprises should consider long-term contracts with key providers. If significant integration is required, it will be more advantageous to sacrifice the flexibility to change providers more frequently.
• Security and integration are typically afterthoughts with these products but should be prioritized before selecting a provider. Integration costs must be considered to maintain the return on investment.
• The value of cloud-based billing systems for the customer must be determined. Billing errors and system limitation have been replete with customer satisfaction issues. Customers will choose vendors that simplify doing business.
• Organizations should perform a point of contact with the target provider before putting a solution into operation. Many will find that a number of solutions do not live up to expectations and requirements. Flaws should be identified early in the process.
• Worth continual evaluation is the value that this technology brings to business. Cloud-based billing systems are much easier to change out. This feature should be used to an organization’s advantage.

Visit Gigaom Research to get the full report FREE @ Gigaom Research,

" all-in-one accounting and tax service for small business" InDinero raises $7 million in funding

inDinero today announces its re-launch as the premiere all-in-one accounting and tax service for small business. Backed by $7M in new capital and $10M overall from 50+ different angel investors and small funds, inDinero can now replace all three back office disciplines (accounting, tax and payroll) for one flat fee. Co-founders Jessica Mah and Andy Su remain the only official board members as no board seats or observer rights were given out. Notable investors in this round include Kevin Hartz, Bobby Yazdani, Hank Vigil, Fritz Lanman, Coyote Ridge Ventures, SaaS Capital, Streamlined Ventures, among many others.

inDinero’s re-launch just says “No” to the old SaaS scalability model by providing customers with the brightest minds in accounting to walk them through all of their financial needs. Running at near break-even, inDinero is padding their bank account with the new funds as they plan to double headcount and office locations over the next 18 months. Focusing primarily on customers with 2-100 employees, inDinero is making it easier for small business to grow faster.

“Now we’re a pain killer for any small business that wants to focus on themselves instead of having to build out their own accounting staff,” said Jessica Mah, CEO at inDinero. “The Mint.com for businesses idea was horrible, and now we are doing so much more by actually doing the accounting and taxes. A business no longer needs to hire a bookkeeper and tax person anymore; inDinero just takes care of it all.”

Unconventional and Innovative

With $10M now in total funding, inDinero has been gathering and managing various waves of cash since 2010 and last year even turned away many larger offers from VCs. inDinero’s pioneering concept of “pseudo bootstrapping” allows it to remain independent while prioritizing revenue and profits and to only accept appropriate levels of funding. “We are a 30 year old company in the making,” said Mah.

“There’s no reason for us to take on more capital than necessary and at what cost?” In addition to its funding methodology, inDinero’s innovative SwS approach is making a huge impact on the startup world. Now a growing business can hold off on hiring an in-house controller well into the 100th employee mark. inDinero also makes sure its developers work right along side of its own tax, accounting and payroll experts so that real time best practices reach customers seamlessly.

“As a rapidly growing business, we face a lot of challenges and having inDinero’s support and good humor has been indispensable,” stated Kate Bertash, operations services manager at Move Loot. “Now we enter a new phase of our company after raising our Series A and we are definitely more prepared going into it with inDinero’s help.”

Covet Thy Customer

Back in 2010 it was hot and seemingly lucrative to be every businesses’ sexy little financial dashboard. But at $20 per month, it became clear that doing so little for so many was not going to be a sustainable and growing business model. inDinero customers were even begging for more services stating that if you are already keeping track of my money, you might as well file my taxes and do my payroll while you are at it; oh, and charge me more for it all. However, inDinero could not just become a more user-friendly version of Intuit. Instead, inDinero began hiring the best and brightest minds in the accounting world to help customers in need and take great care of them as if they were their own dedicated accountants. Now inDinero charges customers between a few hundred to several thousands of dollars per month and customers are glad to make the change. Finally, inDinero realized they are the ideal solution for the growing startup company. By clearly identifying their target customer, inDinero is helping growing startups to grow even faster.

“inDinero solved a huge problem for us and saved me hundreds of hours of work and worry,” stated Brian Bosche’, CEO and co-founder at TernPro. “I don’t know what I would have done without inDinero, and I hope more businesses like theirs can make it easier for startups to focus on building products and customers versus worrying about accounting, payroll and taxes.”

About inDinero

inDinero is the leading financial software with services (SwS) solution for small businesses to automate accounting, tax and payroll activities for a flat fee. inDinero has over 80 employees with offices in San Francisco, Portland, and Manila. For more information go to www.inDinero.com or call 855-463-4637.

TurboTax overall, including the desktop wing, grew 11 percent annually with nearly 15.6 million units sold through last weekend.

Rachel King for ZD Net reports: "All the way up to Saturday, February 14, TurboTax Online sales grew 19 percent year-over-year with more than 11.4 million units sold.

TurboTax overall, including the desktop wing, grew 11 percent annually with nearly 15.6 million units sold through last weekend.

With a nod at the ongoing investigations at suspicious state-level tax returns stemming from TurboTax filings, Sasan Goodarzi, senior vice president and general manager of Intuit's consumer tax group, said in prepared remarks, "We've worked through some early challenges, but we are pleased with our progress at this point in the season."

Intuit's loss widens, but less than expected / revenue rose 3.3%

Intuit (NASDAQ: INTU) reported Q2 EPS of ($0.06), $0.07 better than the analyst estimate of ($0.13). Revenue for the quarter came in at $808 million versus the consensus estimate of $786.6 million.

Intuit sees Q3 2015 EPS of $2.70-$2.75, versus the consensus of $2.88. Intuit sees Q3 2015 revenue of $2.075-2.15 billion, versus the consensus of $2.23 billion.

Intuit sees FY2015 EPS of $2.45-$2.50, versus the consensus of $2.47. Intuit sees FY2015 revenue of $4.275-4.375 billion, versus the consensus of $4.34 billion.

“We delivered a strong quarter, exceeding our company financial targets across the board,” said Brad Smith, Intuit’s president and chief executive officer. “Our Small Business online ecosystem momentum continues to build, with steady subscriber growth again this quarter. On the heels of this performance, we’ve raised our QuickBooks Online subscriber guidance for this fiscal year.

“Overall, early indicators and unit results show our tax strategy is on track. While we faced some initial challenges as a result of a change to our desktop product lineup, we took swift action in response to our customers’ feedback. While doing so, we continue to take proactive measures to navigate a heightened sense of concern about tax fraud in the American tax system.

“Beyond these challenges, we are inspired by the opportunities in front of us and we remain deeply committed to accelerating both customer and revenue growth across the company,” said Smith.
_________
Per MarketWatch:

 

Intuit Inc. said its revenue rose 3.3% in the January quarter, helped by subscriber growth, while the company said it continues to take measures to navigate a heightened sense of concern about tax fraud.

Earlier this month--and after the quarter ended--a wave of fraudulent tax-return filings caused the company's TurboTax business to halt the transmission of e-filed state tax returns for about 24 hours. Intuit has said it thinks there was no breach of the company's computer systems and that information used to file the fraudulent returns was obtained from other sources outside the tax preparation process.

"Overall, early indicators and unit results show our tax strategy is on track," Chief Executive Brad Smith said in a prepared statement. "While we faced some initial challenges as a result of a change to our desktop product lineup, we took swift action in response to our customers' feedback. While doing so, we continue to take proactive measures to navigate a heightened sense of concern about tax fraud in the American tax system.

Revenue in the latest period edged up to $808 million, exceeding the company's expectations for revenue of $780 million to $800 million.

Intuit, also known for Quicken and QuickBooks, has diversified through a variety of acquisitions. In June, the company bought mobile payment provider Check for about $360 million. Previously, it struck deals for document service DocStoc and tax-return helper GoodApril.

For the current quarter, the company forecast per-share earnings of $2.70 to $2.75 and revenue of $2.075 billion to $2.15 billion. Analysts polled by Thomson Reuters expected a per-share profit decline of 19% to $2.88 and revenue decrease of 7% to $2.23 billion.

For the period ended Jan. 31, Intuit reported a loss of $66 million, or 23 cents a share, compared with a year-earlier loss of $37 million, or 13 cents a share. Excluding stock-based compensation and other items, the per-share loss from continuing operations was six cents, compared with a year-earlier earnings of two cents. The company expected a loss excluding items of 11 cents to 13 cents a share.

Start-up Kit Offers easy to manage CRM For Small Business / KitCRM ; SMS / Text based CRM

Businesses usually need a CRM system to run their businesses. In today’s cut-throat competitive world businesses especially small businesses need to manage their resources better in order to succeed. Kit perfectly fills in the gap.

Kit is a lot different from the existing lot. All the CRM software in the market today is more or less similar to Salesforce. Now KitCRM performs all the functions of regular CRM software but uses text messages (SMS) to do so. Let’s have a look at how this is done.

Marketing is much simplified using KitCRM saving a lot of time for small business owners. All you need to do is configure KitCRM with your business accounts like shopify, Facebook etc. Once this is done you can simply run your business with SMS’s to run sponsored ad campaign within your budget, take stock of sales, and communicate with customers and a lot more.

Reports can be generated by sending a simple SMS. Something like total sales in a day, best sellers or even slow moving goods or contacting customers or even receiving a detailed sales report can be done very easily.

 

KitCRM, with its easy to use technology definitely competes with traditional CRM systems for small businesses. Anyone with a smartphone can maintain their customer relationships with their fingertips. It’s as simple as that. Pricing starts at as little as $10 per month and the company also offers a 14day trail.

What Married Taxpayers Lose By Filing Separately

Lisa Hay for Betterment & the HuffPo writes: For all married couples, there is an annual choice to make when selecting your filing status: married filing jointly (MFJ) or married filing separately (MFS)?

As with most tax-related questions, the answer is that it depends.
It's important to note that married filing separately is not the same as filing as a single person. In most cases, it doesn't make sense to file separately because a married couple will usually end up paying more total tax with two returns.

But, there are exceptions to every rule--and this one is no different. There are cases when filing separately makes more sense in order to maximize a deduction or to separate tax liability. That means it is important to look at your individual situation each year when deciding how to file.

What You Lose By Filing Separately
Filing separately can disqualify or limit your use of potentially valuable tax breaks, including (but not limited to):

• The child and dependent care tax credit
• The adoption credit
• The Earned Income Credit
• Tax-free exclusion of U.S. bond interest
• Tax-free exclusion of Social Security benefits
• The credit for the elderly and disabled
• The deduction for college tuition expenses
• The student loan interest deduction
• The American Opportunity Credit and Lifetime Learning Credit for higher education expenses
• The deduction of net capital losses
• Traditional IRA deductions
• Roth IRA contributions

So, why would it make sense to file separately?
What You Gain By Filing Separately
There are some situations in which filing separately can actually result in tax savings. A few common scenarios include:

Separation of Your Tax Liability From Your Spouse's
It may be preferable to file separately when you need to separate your tax liability from your spouse's. Signing a joint tax return makes you both responsible for the accuracy and completeness of the return and obligates you for any current or future tax liability or penalties. If you file separately, you will only be responsible for the accuracy and payment of taxes for your own return.

Lower Overall Tax Bill If One Spouse Has a Significant Itemized Deduction
If you and/or your spouse both have taxable income and at least one of you (ideally the person with the lower income) has significant itemized deductions that are limited by adjusted gross income (AGI), you should run the numbers to calculate the potential advantages of filing separately.

Common itemized deductions limited by AGI are:

• Medical expenses, deductible only to the extent they exceed 10% of AGI--7.5% if you're age 65 or older
• Personal casualty losses, deductible only to the extent they exceed 10% of AGI
• Miscellaneous itemized expenses, such as unreimbursed employee business expenses, fees for tax advice and preparation, and investment expenses, deductible only to the extent they exceed 2% of AGI
• Charitable contributions, deductible up to 20%, 30%, or 50% of AGI, depending on the type of gift
• For example, AGI determines if a couple can deduct unreimbursed healthcare costs and casualty losses on Schedule A. However, out-of-pocket medical expenses must exceed 10% of AGI to qualify as a deduction. Casualty losses must also total more than 10% of AGI. (See IRS guidelines on medical deductions.)

The spouse with the substantial medical expenses calculates deductibility against only his lower AGI when filing separate returns. As each spouse's AGI--and AGI limits--are lower on separate returns, allowable deductions for these types of expenses may be considerably higher if you file separately. When one spouse can lower taxable income this way, married filing separately might reduce a couple's overall tax liability.

State Considerations
State income taxes can also impact your decision. In some states, considering the total federal and state tax liability together may change the numbers in favor of filing separately. When one or both spouses live in a community property state, special rules apply for allocating income and deductions between each spouse's tax return. Each spouse generally reports half of the total income and half of the deductions on each tax return. Community property states are: Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, and Wisconsin.

The bottom line is that it's important to do the math both ways--filing separately and jointly-- to see which provides the overall lowest tax liability.

Xero responds to NZX price spike query

Holly Ryan for the New Zealand Herald writes:   Online accounting firm Xero has been issued with a price enquiry from the NZX this afternoon after its shares jumped from $16.40 to $19.00 in two days , -- an increase of 15.85 per cent.

Xero chief executive Rod Drury confirmed the company was in compliance with NZX rules and attributed the increase to possible investors from its UK and Australian markets as well as increased media coverage.

"Since Xerocon we've had a really good profile in the UK community and a lot of the investment community were watching what was going on," Drury said. "It was a massive conference and the tone of it was incredibly positive. We do have lots of overseas investors, and we get called everyday from analysts wanting to cover our stock because our growth rates are so high and we're really building quite a nice brand as a pretty sophisticated company globally," he said.

Xero shares reached a high of just under $45 last year before falling by 47 per cent over the rest of the year. Drury said public perception around US issues had held the company back.

"I think a lot of [software as a service] stocks got pulled back a few months ago and a lot have bounced back," Drury said. "I think we were being held back because of perceived US execution issues but people have seen us building on great people and the response from the UK shows that we're doing really well so hopefully that's all just coming back a bit."

In its formal response to the NZX, Xero said it continued to comply with its continuous disclosure obligations under the NZX Listing rules.

Xero's shares have exploded this week and regulator is asking why

Alex Heber for Business Insider Australia writes:   Xero’s shares have exploded this week and the NZ share market regulator has asked the cloud accounting company for an explanation.

The New Zealand Stock Exchange lodged a price enquiry following the share price jump which was up another 10.5% on the ASX today to $18.78. 

The letter from the NZX said between February 17 and 19 the price of Xero shares increased from $16.40 to $19, an increase of 15.85% or $2.60.

There haven’t been any major announcements from the company to the market.

Company CEO Rod Drury told Business Insider after he got the “speeding ticket” from the NZX they looked at the company share register and couldn’t spot anything “tricky”.

He said the volumes hadn’t been big but speculated a big week of presentations at Xerocon in the UK and roadshows in Australia could be behind the move.

Responding to the NZX Xero company secretary confirmed Xero has complied with its continuous disclosure obligations. 

Here’s the chart.

Tax costs for poorly timed stock transactions

Kay Bell for BankRate.com writes: You decided to harvest some capital losses by selling some stocks that took a nose dive. Now one of your former stocks has turned around and you want it back.

Don't be in too big of a hurry to call your broker. If you repurchase the stock too soon, you'll violate the wash sale rule. This regulation prohibits a shareholder from selling a holding at a loss, using that loss for a tax break and then turning right around and buying the same or similar stock.

It's designed to prevent the deduction of what the IRS calls "noneconomic losses." Essentially, in the eyes of the IRS, you never really sold the stock. Your repurchase indicates to the tax agency that you believe in the investment itself but the whole purpose behind the transaction was to generate a tax loss. "You just sold it to book that tax loss, and the Internal Revenue Service is not going to let you do that," says Jim Van Grevenhof, executive editor from the Tax & Accounting business of Thomson Reuters.

Most investors encounter the regulation when they reacquire a stock soon after selling, but it works the other way, too.

Specifically, the law says you may not take a tax loss on a security sale if you have obtained the same or a substantially identical security 30 days before or 30 days after a sale. So don't try to get around the rule by buying more of a stock just before you dump the poorly performing shares you already own.

No loss now, but later

When a stock transaction violates wash sale guidelines, the IRS will not let you take the tax break immediately. However, all is not lost.

For tax purposes, the deduction of your loss is postponed to a later date. That is, the disallowed loss is added to the cost of the new shares you bought. This gives you the tax basis for the holdings, which you'll use when you sell the reacquired securities.

For example, Joe bought 100 shares of Stock A for $1,000 and sold them for $750, producing a $250 loss. Fifteen days later, he bought 100 new shares of Stock A for $800. Because Joe bought identical stock, he can't immediately take the loss. But he can add the disallowed $250 to the $800 price of his new shares, producing a basis of $1,050 for the new shares. When Joe sells his reacquired Stock A shares, the adjusted basis will, depending on the sales price, produce a bigger loss to claim or reduce any taxable gains.

And don't try to skirt the rule by buying a call option on the stock. "Say I bought a stock at $30, it went down to $20 and I want to sell it and claim the $10 loss. Then a day or two later, I buy a $20 call on the stock," says Van Grevenhof as way of illustration. "What I hope is that the stock will go up. That's the same thing as buying actual stock, and it violates the wash sale rules." SNIP, the article continues @ BankRate.com, click here to continue reading.....