If I was Sage I’d be very scared of Xero

Den Howlett for diginomica writes: Valuation of cloud based businesses are notorious for running well ahead of profitability yet the advance in Xero’s stock valuation since the beginning of this year is little short of stratospheric. If I was Sage Software I would be deeply concerned. Here is Xero’s stock chart for 2013 compared to that of Sage:

Compared to Xero, Sage is flatlining. It gets more interesting. Check the following:

Sage Software

Xero

Market capitalisation

£4.2 billion

£1.3 billion

Last reported annual revs

£1.3 bn

£20 million

Cap/revs

3.2x

65x

No of customers

6 million

157,000

Annual value per customer

£216

£127

Xero’s valuation is insane, even by the standards of the most optimistic market analyst and its directors must be under incredible pressure to perform. However, they have something that Sage doesn’t have – a fresh way to approach the market that isn’t encumbered by a set of legacy business models that have to be fed.

Even though Sage recently held an analyst day (PDF) that emphasised its cloud efforts and completed the disposal of a non-core business, the market wasn’t that interested.  But then it doesn’t help itself. Is this image the one you’d want to show as the introduction to your latest strategy?

Where’s the energy? Where is the ‘new’ in showing an image of a person working in a dying industry? Why the re-emphasis on the global brand?

It doesn’t make sense.

Xero by contrast has admirers among its competition. This is what Brad Smith, CEO Intuit said about Xero at the end of 2012.

“I admire them. I think Rod Drury and the team have built a really good company, they have built a very easy and compelling product. We’ve learned some things from Xero that are helping us think differently, which is the highest compliment you can pay to someone who competes in your space.” Alongside and despite its very limited resources, Xero is recognised as the main cloud challenger in the prized US market.

I’ve followed Xero for many years. They, along with others, were always companies I felt are doing things differently enough to make a serious dent in the universe. What I could never have predicted was this level of market cap and especially the growth it has enjoyed since the beginning of the year.

We should not be so surprised. Workday’s market capitalisation is tracking a similar path. The difference for Workday is that its competitors are so much larger than they are today that Workday represents less of a threat in the next few years than Xero does to Sage.

If Xero achieves its near term stated goal of reaching 1.5 million customers then goodness knows what this means for its market cap. If it takes advantage of its outsize market cap to make useful acquisitions then their position gets significant;y stronger. If it uses that same market cap to tap the bond market then it grows its war chest at low or no cost. Whichever way you cut it, Xero has a LOT of options.

I’ve said it before but it is worth repeating. The writing is on the wall for Sage unless it makes radical changes and takes the hit that goes with that.

Xero's clever trick for getting your customers to pay on time

Daniel James for Business IT writes: Want an easier way than printing invoices and tearing off payment slips? Xero's Pay Now feature could be what you're looking for.

One feature of the Xero cloud accounting software that has drawn our attention is the way you can send an electronic invoice with a link your customer can click to make the payment.

That simplifies the payment process for your customers, encourages them to pay promptly, and allows those payments to be automatically recorded in Xero.

As well as your customers being able to pay this way using PayPal and DPS Payment Express, this 'Pay Now' feature has now been enhanced to let your customers pay by credit card too, using an eWAY payment gateway. From the conversations we've had, eWAY seems to be more popular among Australian small businesses than Payment Express, though we haven't actually seen nany firm numbers to back that up.

The advantages of using eWAY over PayPal include:

• businesses normally receive next-day settlement into their bank accounts
• a direct credit card payment gateway has a more 'professional' feel than the consumer-oriented PayPal (business customers may be less inclined than consumers to set up a PayPal account so they can pay via credit card)
• depending on the volume and value of transactions it may be cheaper than PayPal, though you must remember to factor in your bank's charges for the credit card facility. Businesses that are already eWAY clients - typically for their web stores - face no additional setup costs.

One early adopter of Xero/eWAY integration is Rural Business Magazine. Co-owner John Forrest said it took five minutes to set up Xero to handle credit card payments with eWAY, and then "I sent out this month's invoices through Xero at 8am and I started receiving notifications of payment at 9am!"

"It has really simplified the payment process," he added. "I send out the invoice via email in Xero, and the payments come in. Before we had to print the invoice and tear off all the payment slips, now it's online and easier. We get paid faster."

That reasoning also applies to collecting payments via PayPal or Payment Express.

While most small businesses are careful about managing cashflow, we can see that if they knew that a transaction would be on the same credit card statement whether they paid immediately or on the due date, theyd be more likely to pay straight away, especially as the Pay Now link makes it quick and easy to do so. 

After DOMA: Impacts On Tax And Benefits Planning

Sarah M. Johnson, Jennifer Spiegel Berman, Stephanie Zaffos and Harry I. Atlas for Venable write: What Federal benefits should be afforded to same-sex spouses as a result of the Supreme Court's decision?  The Supreme Court's rulings yesterday in United States v. Windsor and Hollingsworth v. Perry will have far-reaching legal implications for same-sex couples in the United States. 

In delivering the opinion of the Court in Windsor, Justice Kennedy stated:   "DOMA undermines both the public and private significance of state-sanctioned same-sex marriages; for it tells those couples, and all the world, that their otherwise valid marriages are unworthy of federal recognition.  This places same-sex couples in an unstable position of being in a second-tier marriage.  The differentiation demeans the couple, whose moral and sexual choices the Constitution protects, ... and whose relationship the State has sought to dignify.  And it humiliates tens of thousands of children now being raised by same-sex couples.  The law in question makes it even more difficult for the children to understand the integrity and closeness of their own family and its concord with other families in their community and in their daily lives. 

The federal statute is invalid, for no legitimate purpose overcomes the purpose and effect to disparage and to injure those whom the State, by its marriage laws, sought to protect in personhood and dignity.  By seeking to displace this protection and treating those persons as living in marriages less respected than others, the federal statute is in violation of the Fifth Amendment."

These words struck down Section 3 of the Defense of Marriage Act ("DOMA"), which defined the word "marriage" at the Federal level to mean only "a legal union between one man and one woman as husband and wife", and the word "spouse" as only "a person of the opposite sex who is a husband or a wife."  Windsor did not address Section 2 of DOMA, which allows states to refuse to recognize a same-sex marriage legally entered into in another state.

The Court dismissed Hollingsworth v. Perry on procedural grounds, stating that the proponents of California's Proposition 8 did not have standing to appeal the lower courts' rulings declaring the proposition unconstitutional.  As a result, the United States District Court's ruling stands, and clears the way for same-sex marriage in California (more below).  If the Court had found that the supporters of Proposition 8 had standing, it would have had an opportunity to rule on the constitutionality of same-sex marriage bans across the country.

The combined holdings mean that those couples who were legally married in California (before Proposition 8 and afterHollingsworth v. Perry), Connecticut, the District of Columbia, Iowa, Maine, Maryland, Massachusetts, New Hampshire, New York, Vermont or Washington (or who will be married in Delaware on or after July 1, or Minnesota or Rhode Island on or after August 1) and reside in one of those states will now be treated as spouses for purposes of over 1,000 Federal laws.

Where a same-sex couple was legally married in one state but now resides in a state that does not recognize same-sex marriage, the couple will not be afforded the benefits of married couples in their state of residence; moreover, as noted by Justice Scalia in his dissent, uncertainty remains as to whether such couple will be considered married for Federal purposes.  It is speculated that action by the executive branch may resolve this uncertainty by applying a uniform, Federal agency-wide definition of "marriage" as being determined by the state of celebration, and not the state of residence.

Implications for Same-Sex Spouses

Here are some of the Federal benefits that should be afforded to same-sex spouses as a result of the Supreme Court's decision in Windsor:

• The ability to pass wealth from one spouse to the other at death without the payment of Federal estate taxes, thanks to the marital deduction, and the ability to inherit the first deceased spouse's unused estate and gift tax exemption.  These changes will have a substantial and favorable impact on the ability to do estate planning for same-sex spouses.
• Deferral of income recognition when a surviving spouse inherits a deceased spouse's IRA or other qualified retirement plan, as the surviving spouse can "roll over" the account to his or her own retirement account, potentially deferring the required dates for distribution.
• The ability for a wealthier spouse to support a less wealthy spouse without the concern of making taxable gifts, as the marital deduction also applies to gifts between spouses.
• Splitting gifts to treat a gift made by one spouse to a third party as having been made one-half by each spouse.
• Simpler Federal income tax returns.  Same-sex spouses may file joint Federal income tax returns, with the resulting "marriage penalty" for spouses who both work and have comparable earnings, and resulting benefits for spouses who have disparate earnings or where one spouse is a homemaker.
• Social Security retirement and death benefits, with the greatest benefit going to those couples where only one spouse has been employed.
• A U.S. citizen spouse should be able to sponsor a non-citizen spouse for legal permanent resident status.
• Military same-sex spouses will be eligible for benefits such as health coverage and housing allowances, as well as the right to be buried together at Arlington National Cemetery.

Because the Windsor ruling holds that DOMA has been unconstitutional since its inception, same-sex spouses should re-examine their past income, gift and estate tax returns where the statute of limitations has not expired.  If filing joint Federal income tax returns would reduce the income tax liability, taxpayers may amend the returns and request a refund.  Like the plaintiff in Windsor, estate tax refunds may be claimed as well.  The flip side is that those same-sex spouses who engaged in sophisticated estate planning to take advantage of the fact that they were not considered spouses at the Federal level (by creating common-law grantor retained income trusts and the like) should immediately revisit their estate plans.

Clients with children or grandchildren who have entered into same-sex marriages should also re-examine their estate plans, as it may be necessary to modify the definitions of "spouse" and "children" or "issue" to ensure the intended beneficiaries will inherit regardless of whether the documents are interpreted in a state that permits same-sex marriage or a state that does not recognize it.

Employee Benefits Implications

The Windsor holding will also have a significant impact on the administration of employee benefit plans for same-sex married couples.  Eligibility for employee benefit plans has historically been the purview of plan sponsors.  However, such plans are generally governed by Federal law, and thus have been prohibited in certain ways from treating same-sex married couples the same as opposite-sex married couples.

With respect to health benefits, this has meant that, although employers may have provided coverage to the same-sex spouses of their employees, such coverage was often not eligible to be paid for on a pre-tax basis.  With the reversal of DOMA, employees with same-sex spouses will now be eligible for the Federal tax advantages applicable to spouses.  Similarly, same-sex spouses will now be afforded rights under COBRA when their coverage under an employer plan terminates.

The decision will also have an impact on retirement plans.  Many legal provisions relating to such plans are tied to the employee's marital status, including notice and distribution rules.  Such plans should now have to recognize any same-sex marriage that is valid under state law for these purposes.

Implications for California Couples

It should be noted that, even though it appears likely that same-sex couples will shortly be able to marry in California, the issue remains complicated.  California Attorney General Kamala Harris has said that every California county must now recognize the right of same-sex couples to legally marry, and that such marriages will resume as soon as the U.S. Ninth Circuit Court of Appeals lifts its stay on the District Court ruling that declares Proposition 8 unconstitutional in California and requires the state to permit same-sex marriage.  The Ninth Circuit has said that it would wait at least 25 days to put the District Court ruling into effect; consequently, Governor Brown has stated that he expects same-sex marriages to resume in California in about 30 days.  However, proponents of Proposition 8 have indicated that they believe the decision in Hollingsworth is only applicable to the two same-sex marriages at issue in that case, and they will continue to seek legal enforcement of Proposition 8.

IRS’ 1099-INT a Headache for Gay Couples

1. Marv Dumon for Business2Community writes: Filing a 1099-MISC form with the Internal Revenue Service (IRS) can be a simple process for most independent contractors.  However, the U.S. Supreme Court’s recent decision to strike down a key provision of the 1990s-era Defense of Marriage Act (DOMA) presents bureaucratic hurdles for the gay and lesbian community when it comes to dealing with taxes. The 1099-INT is a little known form sent from banks which states how much interest has been paid to the account holder.  Banks also report this information to the IRS. For unmarried couples who share an account, the first account holder should issue a separate 1099-INT to his or her partner and then file a Form 1096 with the IRS to alert the government that the interest was split between two parties.  Needless to say, much of the gay and lesbian community isn’t aware of this paperwork requirement. It also highlights how complexity in federal and state laws poses legal risks for same-sex couples.  In addition to taxes, gay couples face complicated issues when it comes to insurance, healthcare, hospital visitation rights, estate planning, and reporting requirements with government agencies.
2. 
   
3. Tax Reporting Other 1099 forms can be much simpler, although the IRS in recent years has progressively sought more information from American taxpayers.  Critics in the U.S. congress, including House Republicans, are calling for a reduction in the IRS’ budget by as much as 24 percent. Individuals who have worked as independent contractors need to file a 1099-MISC if they earned more than $600 during the year, according to Erich Ruth of 1099fire.com, a tax software firm based in Arizona. “Changes to the existing forms like the 1099-MISC is the IRS effort to get more information about a certain transaction, “says Ruth.  “[1099 forms] exist because the IRS wants information. Over the years, the IRS is looking for more information and has created new forms and new mandates to get that information, such as IRS Form 3921, 3922, 1099-K.” One of the benefits of filing a 1099-MISC is the luxury of claiming work-related deductions. On the Schedule C portion of your form, you can claim business expenses that the IRS deems “ordinary” or “necessary;” expenses that allow you to continue your self-employment activities. 
4. 
   
5. However, knowing what is ordinary or necessary can be confusing. As an example, an ordinary or necessary expense would be upgrading your computer so you can continue working as usual, to which you could deduct this from your form. However, renting a sports car to drive to meet a client may be useful for getting extra work, but you probably would not be able to deduct the rental of the sports car from the 1099-MISC. Of course, if you have any questions, consult a tax professional. Alternatively, for deductions that are $5,000 or less, you have the option of filing the Schedule C-EZ. “The IRS has the ability to double check what the payer submitted on the 1099 with what the recipient submits on their 1040,” says Ruth.  “If those numbers don’t match, then the recipient gets a little asking for clarification.”

Sage is offering blog-readers a steep discount of Sage One, from $24-per-month to only $15-per-month. / Sage One is a simple, web-based accounting, business tracking and management application for running a small business.

Sage is offering all blog-readers a steep discount of Sage One, from $24-per-month to only $15-per-month. Sign up here. Sage One is a simple, web-based accounting application for running a small business. Sage One helps time-starved entrepreneurs reduce the time they spend tracking money, invoices, tasks, and projects; sharing documents and files and keeping everyone in the loop.

• Sage is offering all blog-readers a steep discount of Sage One, from $24-per-month to only $15-per-month. Sign up here.
• Sage One is a simple, web-based accounting application for running a small business.
• Sage One helps time-starved entrepreneurs reduce the time they spend tracking money, invoices, tasks, and projects; sharing documents and files and keeping everyone in the loop.
• While accounting is at the core, Sage One is designed to help home-based businesses, freelancers, solo entrepreneurs, and contractors run their overall business in fewer steps and simplify how they work and share with others.
• Sage One offers everything a micro and small-business needs to run a company and manage a team in one easy-to-use, cloudbased solution: banking, invoicing, project and task management, payment, and sharing.
• Introduced in the U.S. in May 2012, Sage One helps entrepreneurs manage their income and expenses with a simple, easy-to-use online accounting solution that streamline and automate manual, time-intensive business management processes.
• With PayPal integration, Sage One users can now get paid faster by generating an invoice in Sage One that contains a link that allows their customers to immediately pay the invoice online with a credit card or PayPal account.
• For $24-per-month, users gain access to everything Sage One has to offer, including: two administrative users, unlimited collaborative users, five gigabytes of storage, and support through phone or online.

The new SaaS all-in-one Sage One application was developed to address the unique business tracking and management needs of emerging small and micro-businesses in the United States.

Sage One was designed to help owners of aspiring businesses spend more time on innovation rather than administration. The new tool brings together money management, invoicing, project tracking, task assignment, messaging, and reporting in a single integrated application, available as an online subscription service for anytime, anywhere access.

Sage One helps entrepreneurs alleviate common challenges such as redundant data entry and errors, disorganized record-keeping, and difficulty in sharing information by offering simple, yet essential, tools in a single, web-based application. Accessible from anywhere,

Sage One allows users to easily share and manage their day-to-day operations without letting time-sensitive items fall through the cracks. The integration to Sage Payment Solutions and PayPal launched on January 31, 2013, and is available through the application.

Sage One offers bank integration, working with more than 10,000 banks and financial institutions. Users can select and link as many bank accounts and credit cards with Sage One as they wish and may reconcile transactions and apply payments against customer invoices in Sage One. Bank integration eliminates the time-consuming task of manually entering or updating payment information.

For $24-per-month, users gain access to everything Sage One has to offer, including: two administrative users, unlimited collaborative users, five gigabytes of storage, and support through phone or online. (Sage is offering Sage One for only $15-per-month for everyone online -- and not just for a limited time but for the life of the account)

Quotes

"In this economy everyone is doing more with less, and this is especially true for entrepreneurs," said Mike Savory, product manager for Sage One. "With the integration of Sage Payment Solutions, busy entrepreneurs can get paid faster and spend more time on growing their businesses, rather than chasing down payment from their customers, reconciling invoices, and wasting time going to the bank."

"Managing and tracking cash flow is a challenge for many time-strapped entrepreneurs," said Henry Benamram, general manager, Sage One. "Bank integration with Sage One further simplifies accounting and business management for entrepreneurs. Rather than keying transactions and trying to determine spending and balances from multiple sources, business owners relying on Sage One can see their accounting, projects, tasks and now banking, all in one place."

"The Sage One dashboard allows me to quickly see the income I receive, my outstanding invoices, and expenses. As a small retail business owner, I don't have a lot of time on my hands, and Sage One allows me to keep track of everything in one place. My accountant even loves Sage One because it makes his job easier!" -- Talima Davis, 

How small businesses benefit from cloud accounting systems

Whitney Vickery for CPA Practice Advisor writes:  In its 2013 SMB Cloud Insights Market Outlook report, hosting services provider Parallels estimates the worldwide market for cloud services aimed at small and medium-sized businesses (SMBs) has reached $45 billion – up 30 percent relative to the prior year. Parallels further projects the SMB cloud services market will hit $95 billion through 2016.

While SMBs have embraced the Cloud for email, HR and other business functions, the transition to the Cloud for accounting and financial management has been slower to evolve. Some cite concerns with security and compliance, or a hesitation to wipe out investments in existing back office systems that would be a consequence of transitioning to the Cloud.

But as cloud-based financial accounting solutions that are delivered ‘as-a-Service’ continue to generate tangible efficiency gains and cost savings, hesitations are beginning to fade. As a result, SMBs transitioning to a cloud-based financial accounting service are experiencing several key benefits to their businesses.

‘Software-as-a-Service’ delivery model ensures seamless transition

While SMBs are not running in-house financial systems on the scale of large organizations, many do have entrenched systems in place. Financial and IT decision makers may assume that migrating to a cloud-based financial accounting service will be prolonged, costly, and disruptive to existing system users.

In reality, cloud accounting services eliminate the need to choose between “rip-and-replace” (turning off an old system and moving to the new system) or “co-exist” (running two systems in parallel). The ‘Software-as-a-Service’ (SaaS) delivery model allows the accounting service to be woven into business operations as needed, in order to smooth the transition to the Cloud and leads to accelerated deployment. For SMBs, this translates into an ability to shift to a pre-built, pre-configured system that is operational from ‘Day One’ rather than waiting months for an in-house system to be built, or configured/re-configured from scratch.

Provides access to real-time data analytics

The scalability, capacity, and speed of cloud computing provides software solutions that can deliver state-of-the-art data analytics. Effective budgeting and forecasting requires that financial decision makers look forward and backwards in order to solve financial challenges there is a need to access data, analyze it, and then take action. Ideally, improvements in analytical capabilities free financial managers from transaction processing to focus more fully on data analysis.

Data analytics tools embedded in some cloud accounting services provide greater range and depth of reporting, connecting financial data to HR, CRM, overseas operations, etc., while real-time reporting allows Business Intelligence (BI) to be obtained up-to-the-minute and acted upon with confidence.

Delivers enhanced controls and security

Security is always top priority for the Cloud, but service providers have addressed the issue by ensuring a secure environment for customers that can provide a distinct competitive advantage. For example, users of cloud accounting services delivered ‘Software-as-a-Service’ have access to much faster deployment of patches and security upgrades, and also experience a reduced need to store data on their own site, which minimizes previous storage costs. Finally, these updates keep in line with evolving financial and regulatory requirements.

Implementing a SaaS solution rather than owning and maintaining company hardware and software upgrades involves a shift in mindset—particularly for managers accustomed to using self-contained, in-house systems. Specifically, CFOs worry about whether their data will remain intact, recognizable and secure.

Strategy to Counter Estate Tax Less Appealing

Arden Dale for the Wall St Journal writes: But advisers say the trusts no longer make sense for many people now that the federal government only taxes estates of $5.25 million and over ($10 million for couples). The trusts were introduced in 1990 when the exclusion level was much lower.

Meanwhile, advisers are looking at whether it makes more sense to keep a client's trust in place--or unwind it so that the home goes back into the estate. All of that depends on the current size of the client's estate as well as the value of the home. If placed into the estate, heirs stand to save more in capital-gains taxes than they would in estate taxes.

Heirs pay the capital-gains tax on inherited property based on the fair-market value of the home at the owner's death, not the amount the person originally paid for it. This is known as a step-up in basis, and refers to the cost basis of the property.

"These are transactions that looked perfectly good at the time they were done, but the higher estate tax exclusions make them look not so good now," said Don Weigandt, a wealth adviser in the Los Angeles office of J.P. Morgan Private Bank.

For example, J.P. English, a senior financial planner in the Family Wealth Group of Key Private Bank in Mayfield Heights, Ohio, is working with a family whose matriarch set up a trust in 2003 to transfer a home to family members. At the time, the trust made sense because the federal government taxed estates starting at $1 million.

The woman's family would now prefer to have the property included in her $2 million estate. Adding the home worth $1 million to her estate would not swell it to the $5.25 million threshold. And, of course, it would reduce capital-gains taxes substantially when heirs eventually sell the property.

"As financial planners, our job is to take a holistic, comprehensive view," Mr. English said. "In this case, they had a done a very good job of planning for the estate tax at the time, but you have to look at the income tax effects as well."

Unwinding the trusts--that is, getting a home back into an estate--must be done carefully to avoid breaking the rules and raising red flags with the Internal Revenue Service. Advisers and their clients need to work with tax attorneys to pull it off.

The trusts transfer ownership of the property over time, but let the original owner stay in the home. Usually, they are set up so that when the transfer is complete, another trust owns the property. Often, the original owner continues to stay in the home, renting it from a grantor trust. That way, rental income isn't taxable.

Kenneth Brier, a partner in the Needham, Mass., law firm of Brier & Geurden, is working with a client who set up two of the trusts years ago--one holds a personal residence in the Boston area, the other a vacation home on Cape Cod. The options to get properties back into the estate are limited, because the terms of the trusts are so inflexible, Mr. Brier said.

The IRS might look suspiciously, for example, if the original owner lived rent free in the home after the QPRT transferred ownership to someone else.

"It can be tricky, because there are gray areas when it comes to intentionally clawing back an asset that already has been passed to someone else," he said.

Set up an integration between Unleashed and Xero

WITH ONESAAS YOU CAN SYNCHRONIZE YOUR SHIPPING, LOGISTICS & INVENTORY MANAGEMENT AND ACCOUNTING DATA IN MINUTES

OneSaas connectors help keep your data in synch and you can connect your Shipping, Logistics & Inventory Management data from Unleashed with your Accounting data from Xero. The data across these platforms can be synchronized automatically on an hourly or daily basis.

Using OneSaas you can set up a connection between your Shipping, Logistics & Inventory Management and Accounting systems within minutes. If you use more applications than Unleashed and Xero then you can connect these too. Check out the full list of OneSaas integrations, or choose more integrations when you get started. OneSaas offers a Free 30 day trial and you can sign up on a monthly plan. 

Avoiding a Common Social Security Planning Mistake

Mike Piper for the Oblivious Investor writes: When you look at your Social Security statement (if you receive it in the mail) or youronline Social Security account, you will see three figures:

• An estimated monthly retirement benefit if you claim at age 62,
• An estimated monthly retirement benefit if you claim at your full retirement age (FRA), and
• An estimated monthly retirement benefit if you claim at age 70.

One of the most common mistakes I see when it comes to Social Security planning is to use these numbers without understanding the assumptions that go into them.

To be more specific, what many people overlook about these figures is that each of them is calculated based on the assumption that you will continue working — at your current rate of earnings — right up until the date at which you claim benefits. In other words:

• The at-62 figure assumes you will work until age 62, then claim benefits,
• The at-FRA figure assumes you will work until FRA, then claim benefits, and
• The at-70 figure assumes you will work until age 70, then claim benefits.

But these three scenarios might not be a match for the retirement scenarios you are considering.

For example, if you retire at age 60, but wait until age 70 to claim your retirement benefit, the actual amount you receive per month could be significantly lower than the age-70 benefit listed on the statement, because you would have 10 fewer years of earnings history than what is assumed in the at-70 figure on the statement.

In effect, the SSA statement bundles the when-to-claim-benefits decision together with the when-to-retire decision.

If you want to do an analysis solely of the when-to-claim decision, it typically makes sense to use the figure on the statement that assumes a retirement date closest to the age at which you actually plan to retire, then adjust that benefit upward or downward as needed to figure out the amount you would receive if you claimed at a different point in time. For example, if you plan to retire at 62 you would want to:

• Look at the age-62 benefit provided on the statement to get the benefit you would receive if you claim at 62,
• Multiply the age-62 benefit from the statement by 1.33 to get the benefit you would receive if you claim at 66, and
• Multiply the age-62 benefit from the statement by 1.76 to get the benefit you would receive if you claim at 70.

If you plan to retire at an age other than 62, full retirement age, or 70, you can use the SSA’s “Any PIA Online Calculator“ or “Retirement Estimator” to get the applicable benefit figures. (Both of these calculators assume, however, that you will claim benefits at the later of age 62 or the date at which you retire. So you will still have to do your own math to adjust the calculator’s output to find what your benefit would be if claimed at different ages.)

Quickbooks integration on website

From StackOverflow we read:  After searching online for some guides on how to integrate quickbooks with our webshop I have yet to find a solution that fits what we need.

Currently we are running Quickbooks Enterprise Desktop on a VPS. We have the website hosted on another VPS. The website is running .NET 4.0.

We need to show the actual inventory stock on our products - pulled live from quickbooks. We also need our customers to be able to change their details (delivery address and so on). Lastly we need any new orders on our website to be automatically entered into quickbooks.

From my understanding we need to install Quickbooks Web connector on our VPS that run quickbooks. The quickbooks SDK on the VPS that runs the website, and set up the Web connector to connect to a webservice we create on the VPS that runs the website...

First off, is this correct?

Secondly, from what I can read the Quickbook Web Connector will perform a series of tasks at a given interval (update socks, add new invoices and so on). Is there any way this can happen live?

That is, my website can query Quickbooks through the webconnector when I want it to?

Any pointers, guides, examples will be very helpful.

_______

1 Answer

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From my understanding we need to install Quickbooks Web connector on our VPS that run quickbooks. Yes. The quickbooks SDK on the VPS that runs the website, If you want to, but it's not strictly necessary. The SDK has some tools which are helpful for debugging, but it's not required at all. and set up the Web connector to connect to a webservice we create on the VPS that runs the website... Yes. Secondly, from what I can read the Quickbook Web Connector will perform a series of tasks at a given interval (update socks, add new invoices and so on). Is there any way this can happen live? Correct, the Web Connector updates at intervals. Using the Web Connector, there is no way to make it real-time/live. You could, however, write your own version/replacement of the Web Connector, and make it real-time/live if you wanted to. Be aware, however, that QuickBooks is not the greatest choice for real-time communication. There are a number of scenarios where it is impossible to communicate with QuickBooks. Thus, you might not want to tie your the functionality of your website too tightly to the availability of QuickBooks. Consider: If more than one QuickBooks company file is open at a time, QuickBooks will not allow integrated applications to exchange data with QuickBooks If QuickBooks has recently auto-updated itself, it will not allow integrated applications to exchange data with it until a reboot If QuickBooks is in single-user mode, it will not allow integrated applications to exchange data with it Make sure that QuickBooks performs quickly enough to query the data you need in real-time Generally speaking, you're better off using the Web Connector to query data every few minutes, than depending on QuickBooks always being available.

TaxKilla: Tax Strategy For The 99 Percent, Taken From The 1 Percent / TaxKilla.com

Emily Cohn for the HuffPost writes: The 1 percent find ways to save on their taxes. Why can't you and I?

A new website called TaxKilla.com says we can, and encourages the 99 percent to follow Mitt Romney's lead.

How would you like to deduct the cost of gas from your taxable income? Or perhaps write-off your new laptop?

TaxKilla says the trick to doing this is understanding the tax code, which of course is complicated. But thanks to the site's founders -- two former Wall Street insiders -- navigating the ins and outs just got a lot easier.

TaxKilla won't tell you how to set up an offshore bank account, or offer instructions for making your work wages look like capital gains, but it does suggest we "remove [ourselves] from the slaughter line of wage earners" by creating a business entity, in order to write off certain costs and make our tax bills cheaper.

"The 1 percent have been doing this for years," Jen Powers, a co-founder of the site, told The Huffington Post. "We're not reinventing the wheel."

Powers and her ex-husband Fred Buddemeyer, who both worked on Wall Street in '80s, founded TaxKilla as their way to take part in the Occupy Wall Street movement. They figured the best way to do that was to help others turn a passion into a cash-saving mechanism.

With a name fit for a hip-hop song, TaxKilla gives examples of what types of activities can qualify as a business entity:

Say for example that you like to travel frequently. If you blog about your journeys and add an advertising network to your blog you now have a travel business. Its deductible expenses are a share of your travel costs, your computer, your internet connection, your camera, etc.

Could any hobby, like travel blogging, qualify? Well, no. You'll have to convince the IRS you're actually in it for the money. If your "hobby" is profitable three out of five years, the IRS will consider it a business. But the IRS will get suspicious if your entity is only taking losses.

Once you do establish a business entity -- according to the TaxKilla website that should take about two days -- fill out a Schedule C tax form and deduct work-related expenses like computers, cars and business lunches from your income.

Mitt Romney’s Schedule C form showed his speaker fees in 2010 earned him a $48,756 deduction for expenses.

Powers and Buddemeyer consulted with a lawyer before launching the site who told them TaxKilla wasn't providing any new information not already available on the IRS website. TaxKilla, Powers says, is only repackaging that information in a way that is readable for the 99 percent.

While the tactic is legal, a recent New York Times article described running your own business as "the easiest way to cheat on your taxes."

Greg Kyte, a Utah C.P.A., told the Times:

You can look through your receipts for the year and say, ‘Here’s some stuff I bought at Home Depot,’... The I.R.S. would have no idea if I bought that for my house or for my business.

What are the chances the IRS will come a knockin' if they think you're doing something fishy? That depends on how much you make. If you're making more than a $1 million, you have more than a one in eight chance of being audited. Overall, only 1 percent of individuals were audited in 2011.

Powers was adamant that what they're encouraging is not illegal.

"What I want to make clear is tax dodging is not our intention at all," she said. "We want people to file and pay but to be smart about how they do it."

If you have a hobby you think qualifies as a business entity, you'll have to jump on this fast, as the deadline for filing income tax returns is April 17. If you think you'll need more time to complete your taxes, be sure to file an extension with the IRS.

Tax Deductible fees for services

Barry Dolowich writes: Question: Early this year, I was fortunate enough to come into a substantial amount of money which I invested in a managed brokerage account. I have and will be paying large quarterly investment management fees. I also paid my attorney and accountant for estate and income tax planning. Are these fees deductible and if so, how do I deduct them?

Answer: You may deduct your payment of fees charged for the services listed below, subject to the 2% adjusted gross income limitation for miscellaneous itemized deductions:

Preparing your tax return or refund claim involving any tax; preparing and obtaining a private Internal Revenue Service ruling, including filing fees; representing you before any examination, trial, or other type of hearing involving any tax. The term "any tax" includes income, gift, property, estate, or any other tax, whether the taxing authority be federal, state, or local; legal expenses related to your job as an employee or to investment activities; an allocated portion of legal fees paid to an attorney to press a claim for disputed benefits, such as disability and Social Security benefits;fees related to the tax planning portion of your estate planning; allocated legal fees incurred in connection with disputes or actions to increase or maintain taxable alimony by the alimony recipient; investment fees and related investment expenses.

Certain legal and accounting expenses incurred in connection with business and rental activities may be deducted directly and  without limitation on their respective tax return schedules, and not as miscellaneous itemized deductions.

For example, if you are operating a business as a sole proprietorship reporting your business income on Form 1040, Schedule C, then you would be able to deduct legal and accounting expenses incurred in connection in the reasonable and ordinary operation of your business directly on Schedule C. Furthermore, if you hired an attorney to evict a delinquent tenant of a Schedule E rental property, the fees incurred would be deductible directly on your Schedule E.

Planning tip: If appropriate, deductible fees may also be allocated throughout various tax return schedules. For example, tax return preparation fees may be allocated among Schedules C and E (without being subject to adjusted gross income limitations), and Schedule A (miscellaneous itemized deductions subject to limitations).

Freshbooks launched its new iPhone app / gives freelancers and small business the capability to create invoices and document expenses, fill out time sheets, organize expenses, and process payments on the go.

John Koetsier for VentureBeat writes: Cloud accounting service Freshbooks launched its new iPhone app yesterday. To celebrate, the company is giving 160 entrepreneurs a little treat.

The app gives freelancers and small business people the capability to create invoices and document expenses, fill out time sheets, organize expenses, and process payments on the go. But it’s safe to say that most business expense reports don’t include parachuting — or pedicures.

To promote the app, Freshbooks has launched a “new 4 Ps of marketing” promo. It’s a take-off on the old Ps: price, product, promotion, and place. These new Ps, however, have nothing to do with anything but spoiling entrepreneurs.

The first 40 people who log expenses for pancakes, parking, parachuting, or a pedicure via the new app will have it paid for by Freshbooks. The contest starts September 1 and runs through to the September 21.

Little tip?

Parking and pancakes are easy — meals are common expenses. And 40 pedicures could be soaked up pretty quickly. The P that may last longest is parachuting. So if you’ve ever had a dream of jumping from a perfectly good airplane, here’s your chance to get someone else to pay for it.

All you have to do? Treat yourself and expense it via Freshbooks.

Full contest rules are on FreshBooks’ Facebook page.