Deductions You Can Take For Net Investment Income Tax Purposes

Lewis Saret for Forbes writes: Generally, unless specifically provided else­where by the Final Regulations, only properly allocable deductions contained in Reg. §1.1411-4(f) may be taken into account by taxpayers in determining their NII. Additionally, taxpayers should be aware that any deductions provided for in Reg. §1.1411-4(f) that exceed gross income and net gain cannot be taken into account when determining NII in any other tax year except as otherwise allowed by Code Chapter 1.

Properly Allocable Deductions

1.    Deductions allocable to gross income from rents and royalties. Deductions described in Code Sec. 62(a)(4) (i.e.,deductions attributable to rents and royalties) allo­cable to rents and royalties included in NII are taken into account in determining NII.

2.    Deductions allocable to gross income from trader trades or businesses. Trade or business expense deductions described in Code Sec. 62(a)(1) allocable to income from a trade or business described in Reg. §1.1411-5 (i.e., passive activities with respect to the taxpayer and/or trade or business of trading in financial instruments or commodities) are taken into account in determining NII to the extent the deductions are not taken into account in determining self-employment income within the meaning of Reg. §1.1411-9.

3.    Penalties on early withdrawal of savings. Penalty amounts forfeited to certain financial institutions as a penalty for premature withdrawal of funds from certain accounts, such as time savings account, certificate of deposit, or similar deposits are taken into account in determining NII.

4.    NOLs. The total Code Sec. 1411 NOL amount of an NOL deduction allowed under Code Sec. 172 is allowed as a properly allocable deduction in determining NII. For this purpose, the total Code Sec. 1411 NOL amount of an NOL deduction is calculated as follows: [snip]  The article continues @ Forbes, click here to continue reading.....

Xero and Silicon Valley Bank Partner to Offer Innovative Companies Next-Generation Financial Management

Xero and Silicon Valley Bank Partner to Offer Innovative Companies Next-Generation Financial Management Small Businesses Can Access Quick, Reliable Financial Insights Through Xero's Online Accounting Solution Integrated With SVB's Banking Platform

Today, Xero, the global leader in online accounting software, and Silicon Valley Bank, the bank of the global innovation economy, announced integration that brings Xero's latest financial management tools to startups and small businesses in both the US and UK.

By linking Xero's online accounting solution directly with SVB's online banking platform, business owners get reliable overnight delivery of the prior day's bank transactions directly into Xero's intuitive online accounting workflow. As a result, business owners can make smarter business decisions by getting an accurate and comprehensive view of their finances, without the hassle and costly mistakes caused by out-of-date cash flow balances.

"For my company, this integration is a life saver. I used to worry constantly that I didn't know my true account balances," said Benjamin McCann, co-founder at Connectifier, Inc., a venture-backed talent sourcing startup in North Beach, Calif. "Trying to get an accurate picture of our financials was a pain and we always had an out-of-date view. Now it happens seamlessly. At any point during my week, I can open up Xero and know exactly where we stand."

Starting this week, businesses using Xero in the US can sign up to integrate with Silicon Valley Bank for deposit account balances and transactions. After signing up, they will start getting bank feeds the week of August 11th. UK clients will be able to sign up later this month.

"Xero and Silicon Valley Bank have a common objective -- to make the lives of our customers easier," said Jamie Sutherland, president, Xero U.S. "In fact, it wasn't that long ago that Xero was a startup itself -- so we know all too well what it's like to be under the gun to create up-to-date financial reports for the board or quickly get an update on cash flow before making a key purchasing decision. Now with Xero's integration with SVB's banking platform, small businesses can get their up-to-date financial info faster than ever before."

"Our SVB Direct Connect platform integration with Xero is another important step in our organizational strategy to make it easy for our clients to bank with us," said Bruce Wallace, COO, Silicon Valley Bank. SVB Direct Connect enables Silicon Valley Bank clients to access their banking information through leading accounting platforms. "As the leading bank for high-growth, disruptive companies, integrating with innovative partners such as Xero is a critical strategy for SVB."

BoxFreeIT: Wave Accounting Review – Ok for Sole Traders, Falls Short for Small Business (We Respond)

Alexey Mitko  for BoxFree IT writes: When doing an app review it is always difficult to give a general recommendation, as apps are usually developed and work great for a particular kind of client. WithWave Accounting this dilemma does not exist as the app is placed firmly in the “has a couple good ideas, not ready for daily operations” category.

Wave Accounting positions itself as a collection of accounting apps for small business. Some functionality is available on the mobile device with additional features accessible through the online portal. The mobile app can send invoices from your iPhone, along with adding new client records and products or services. The app also provides provides simple cash flow analytics and a notifications centre.

Overall, the app sports a clean and fluid look but needs a bit of testing as it did not allow me to add sales tax or choose a sales account straight after downloading it on an iPhone 5C. The app proceeded to crash when I first tried to add a product but worked without problems afterwards.

The web portal gives access to more apps and functionality and positions itself as an accounting platform with invoicing, bill tracking, Yodlee bank feeds, payroll management (US and Canada only), some reporting and a paid-for services section.

Some functions are done well. For example, CSV imports include very accessible step by step instructions, and receipts processing is a step above the digital storage seen in other accounting platforms.

However, a couple of features require a redesign and additional thought. To name a few:

1. No Credit Notes

While I could raise an invoice with a negative amount as a total, I wasn’t able to offset it against another invoice without using a clearing account. Credit notes are an essential feature in invoicing but are apparently missing from Wave.

2. No Custom Invoices

Invoices are not freely customisable, you need to adhere to one of the three templates provided. While not all businesses need invoices with a custom layout, the feature is common across cloud accounting platforms.

3. No Audit History

There is no audit history yet you are able to invite additional collaborators to your business account.

4. No bulk invoices or bills

There is no way to bulk upload invoices or bills. This can be problematic if your invoices are generated by another system or if you have a large number of invoices you need to key in.

5. Slow reconciliation

The bank reconciliation is not entirely intuitive. It relies on a tabular format and may take additional time if volume of transactions is significant.

In terms of pricing the basic version of Wave is free. The money is made on advertisements, higher than average credit card processing fees and product recommendations.

A special note to put credit card processing charges in perspective. The 2.9 percent charge that Wave asks for credit card processing compares with 2.7 percent for Stripe and 2.4 percent for PayPal. For a small business in Australia that turns over $300,000 per year a 0.2 percent difference would mean $600 per year and a 0.5 percent difference would add up to $1,500.

Wave’s functionality is sufficient for a freelancer with straightforward affairs, not a small business owner. Other cloud accounting applications offer functionality and refined user interfaces that are ahead by several years of development.

Alternative platforms are usually not free to use but would provide a scalable solution for your business and additional options when it comes to structuring your business processes.

It remains to be seen if Wave is able to catch up, but it probably has a brighter future concentrating its development efforts for businesses that do not require payroll.

(we actually took the time to comment on this review)

1. Lance Smith says:

   Your comment is awaiting moderation. 
   

   July 16, 2014 at 9:51 pm

   >”Wave Accounting positions itself as a collection of accounting apps for small business”.

   Actually no. Wave positions itself as apps for micro-businesses, there is a tremendous difference between the micro business market and small business market. Wave clearly says on their site “Made specifically for entrepreneurs, freelancers, consultants and small businesses with 9 employees or less.”

   >higher than average credit card processing fees

   In the U.S. Stripe’s published fee is exactly the same as Wavehttps://stripe.com/us/pricing
   and Paypal if your processing under $3000 USD/mo.https://www.paypal.com/webapps/mpp/merchant-fees Again, we’re talking about the micro business market – not small business. Furthermore you should subtract the monthly subscription fee over the course of 12 months from the final calculation you present as a frame of reference. Not doing so makes your point inaccurate, which it is (inaccurate).

   >Wave’s functionality is sufficient for a freelancer with straightforward affairs, not a small business owner.

   You’re essentially saying Wave delivers on whom they say they are made for, “Made specifically for entrepreneurs, freelancers, ….”

   >Other cloud accounting applications offer functionality and refined user interfaces that are ahead by several years of development. Alternative platforms are usually not free to use but would provide a scalable solution for your business and additional options when it comes to structuring your business processes.

   Disagree with your interface comment, and a start up venture or micro-business uses tools that are efficient and meet their needs today, not tools that are designed for where they hope to be down the line, a place they may never even get to. Wave is not trying to be the tool for your business if it is fortunate enough to grow into a small business with 20 or 30 employees. There is nothing that would make Wave more happy than to see a client launch and operate their business with Wave and then grow out of Wave into Intacct or NetSuite, etc. That happening would equate to “mission accomplished”. Most all accounting apps are a fit for period of time, a phase of business cycle, etc. and not meant to be lifetime solutions for the business as it grows.

   >It remains to be seen if Wave is able to catch up, but it probably has a brighter future concentrating its development efforts for businesses that do not require payroll.

   Here in the U.S., Wave payroll is awesomehttps://www.waveapps.com/payroll/

   >the app is placed firmly in the “has a couple good ideas, not ready for daily operations” category.

   No, it’s placed in the “micro business” category which apparently is a business space you are unfamiliar with. Please visit Wikipedia,http://en.wikipedia.org/wiki/Micro-Business You’ll learn for example in the U.K. there are around 4.5 million micro enterprises (0-9 employees) which represents 95% of all UK businesses.

   Wave is not perfect but it’s also not what your review presents it to be. We serve with Wave clients and have to present work around solutions for time tracking, inventory management, CRM, business intelligence / analytics and so forth. But we do much of that for our Xero and QBO clients as well. I understand shortly Wave will be releasing their API and months later I’d imagine a rather diverse eco-system will emerge. Wave does have 2 million users out there and I understand over 1,000 new users sign up each day.

   Anyway – we like BoxFree IT here in the U.S. – all the best!

   Lance Smith
   WaveCFO.com

   Reply

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5 Amazing Accounting Apps Any Small Business Should Take Advantage Of

Warren Brown for Jkengitech writes: What do all small businesses have in common? If they don’t take control of their finances they end up going under and it happens more often than you think. Don’t fall victim to the same fate as you will kick yourself, but you shouldn’t need to worry about messing up anyway. There are a lot of great accounting apps out at the moment to help you get your finances in check and we’ll look at a few now.

Shoeboxed

Do you have any idea where they came up with the idea for their name? If you do it’s because you’re guilty of throwing your receipts into a shoe box, which is great as they’re all in the same place although your bookkeeper won’t be happy with you when tax time rolls around. Now they’ve made it easy for anyone to keep a copy of every single business receipt because you just snap a photo of it and it will be stored away inside the app, plus you can get expense reports at any moment with a few clicks of a button.

Easy Books

If you’re only running a small operation you might not want to use a full-blown bookkeeping solution as they’re powerful and hard to get your head around, so something like Easy Books is a great alternative. Just because it’s not full of a thousand advanced features you’ll never use it doesn’t mean it’s not a professional business solution, but you’ll be able to keep track of all your financial affairs easily and you won’t waste a lot of time every day as entering information into the app is quick and painless.

Fresh Books

In the past you would always leave a paper trail and all your books would be thrown in a drawer, so you’ll feel a lot better now that all of your important financial information can be stored in the cloud. Fresh Books is one of the most popular pieces of accounting software in the world and you can use it for multiple things, such as sending invoices to your clients and tracking the amount of time you spend on everything. Even though it’s a premium solution it’s easy to use once you play around with it for a while.

Kashoo Accounting

Kashoo Accounting is another one of those all-in-one accounting solutions you will love and it’s packed with a lot of pro features. If you currently have an accountant or a business partner they’ll be able to access the exact same information as you which can make things easier. The offline access is beneficial when you want to work on something even if you don’t have access to the internet, so it means you won’t have any excuses if you don’t manage to get everything taken care of before tax time.

inDinero

There are a lot of accounting services out there that will help you save a lot of money, but at the end of the day it’s ultimately your responsibility to save as much as possible by keeping track of your expenses. You’ll be able to do it a lot easier if you download inDinero because all your business accounts and credit cards can be stored in the same place. You will see what is going out and you can set up alerts to remind you how much is actually coming in and going out of your accounts on a regular basis.

Make your life easier

If you can get on top of your finances it’s more likely your business will be able to survive any heavy hits. You never know when something bad might happen, so start using these apps today and at the very least you’ll know what is happening with your money.

Tax Tips: Review limits on Section 529 contributions

Barry Dolowich for the Monterey Herald writes: Question: We were just blessed with our first grandchild and would like to set up a college fund for our new prince. We were recently advised that we could open a "Section 529" plan to safely invest for our grandson's college expenses. Can you please provide us with the basics of this type of plan and any tax consequences?

Answer:  Internal Revenue Code Section 529 college savings plans are state-sponsored plans designed to encourage residents to save for college. Regardless of age and income, anyone can make contributions to a 529 plan on behalf of a beneficiary. However, there are three limitations relating to contributions to a 529 account:

• Gifting limit. Since Section 529 does not impose an annual contribution limit on 529 plans, contributors need to be aware of the federal gift tax exclusion. To avoid gift tax or a reduction in the lifetime gift or estate exclusion, contributors may take advantage of the 2014 annual gift exclusion of $14,000 per beneficiary, or $28,000 for married couples.

• Special gifting provision. Section 529 allows a special gifting provision that is not available in any other estate planning vehicle. A contributor may front-load the gift by contributing five years of annual gifts in one year, or contribute $70,000 on behalf of a beneficiary to a 529 plan in one year, $140,000 for married couples. When taking advantage of this provision, the contributor is required to file Form 709, a gift tax return, with the IRS.

• Account limit. To prevent accumulating more money than needed to send the beneficiary to college, the account limit, which varies by state, is generally in excess of $200,000. Once the contributions and earnings in a 529 plan reach the account limit, new contributions cannot be made to the plan.

Although contributions to 529 plans are not federally income tax deductible, some states provide a deduction or credit for residents who participate in their state's 529 plan. This deduction or credit varies from state to state.

Accumulations or earnings on contributions to a 529 plan are not subject to federal income tax while they remain in the account. When distributions are used for qualified higher education expenses at an eligible educational institution, they are federally income tax free. If a distribution is taken from a 529 plan and is not used for a qualified expense, the portion of the distribution representing earnings is subject to ordinary income tax and a 10 percent penalty. Exceptions to the penalty include distributions pursuant to the death of the beneficiary, disability of the beneficiary, or receipt of a tax-free scholarship or educational assistance allowance by the beneficiary that exceeds the distribution.

Qualified higher education expenses generally include tuition, books, supplies, equipment and, in many cases, room and board.

Because contributions to a 529 plan are considered gifts, the assets are removed from the contributor's estate. Another unique feature of the 529 plan is that although contributions are gifts, the account owner (contributor) maintains control of the account for the life of the account. This control, coupled with the special gifting provision, makes the 529 plan a viable estate planning tool for those who want to help send a child to college.

Barry Dolowich is a certified public accountant in Monterey, CA

University of Phoenix and Intuit Partnership Provides Students Access to Professional Accounting Software / Students gain professional real-world experience through QuickBooks Online software integration into the University’s Accounting Classes

University of Phoenix, a subsidiary of Apollo Education Group, Inc. APOL -3.79% , and Intuit Inc. INTU +1.09% , the leader in online accounting software, today announced that Intuit’s QuickBooks® Online has been integrated into the University of Phoenix® School of Business’ accounting degree program to provide students with access to a real-world business application with direct relevance to many business environments. 

 

“University of Phoenix is focused on providing students with the right education and skills that employers are looking for in their workforce,” said University of Phoenix School of Business Executive Dean Ruth Veloria. “By providing our students with access to Intuit’s QuickBooks Online, students will be learning accounting skills on a platform that is widely used by businesses and accounting professionals worldwide, which can help make them more marketable in today’s competitive job market.” 

“This is an exciting opportunity for Intuit and University of Phoenix as both companies are focused on empowering up-and-coming entrepreneurs, small businesses, accountants and bookkeeping professionals,” said Jim McGinnis, vice president, Accountant & Advisor Group, Intuit. “With more than 1.7 million QuickBooks Online users worldwide, providing access to the leading online accounting software will help ensure that today’s students are prepared for a successful tomorrow.” 

QuickBooks Online will be incorporated into University of Phoenix School of Business Accounting courses ACC/290 and ACC/291 (Principles of Accounting I and II). These programs are the fundamental programs for all University of Phoenix School of Business accounting students. Students who complete these courses as part of their degree program will earn a certificate in bookkeeping, thus giving these students an opportunity to gain a job relevant credential even before they complete their degree program. In addition, University of Phoenix business students accessing the QuickBooks Online software will have the opportunity to become QuickBooks certified through Intuit at the completion of the course. 

For more information on University of Phoenix’s School of Business programs, visit www.phoenix.edu/business.

For more information on Intuit and the Intuit Education Program, visit www.intuit.com .

QuickBooks In The Cloud Computing Era: How Mobile Does Your Manufacturing Operation Want

Adam Stern for Manufacturing Business Technology writes: Employee demand for anywhere/anytime access to data and applications from any device is fueling a trend by accounting firms — and their clients among small- to mid-size manufacturers — to move QuickBooks to the cloud. To increase productivity, the growing mobile workforce requires that these organizations enable remote use of multiple devices, including smartphones, tablets, iPads, PCs and laptops.

With a QuickBooks terminal server, the application is installed and run on the hosting provider's terminal servers. Users gain access to the application remotely via an online connection. This helps to create a collaborative environment where CPAs, bookkeepers and manufacturers can share and exchange information and files in real time. Changes are updated instantly and accessible to the other members, enabling CPAs to monitor the work done by bookkeepers and verify them when and where necessary. And now that enterprise ERP solutions can live and prosper in the cloud — and that CSPs can install, manage, update, protect and support ERP software for a low monthly fee — the question has shifted from “to migrate or not to migrate?” to “which cloud environment suits us best?”

While enabling a mobile workforce can raise concerns about security, data protection and integrity typically is greater with a hosted solution than with an in-house implementation. That’s because commercial hosting services maintain multiple levels of security, firewalls, encryption, backup power and hazard prevention.

To ensure that QuickBooks application and data can't be accessed by unauthorized parties, remote users are provided with access passwords. Most CSPs (cloud service providers) implement the latest security strategies and comply with industry standards to ensure security and reliability. A conscientious CSP takes into consideration authentication, data integrity, confidentiality and availability when designing the structure of its cloud environment, then builds it over secure servers located within authorized data centers. Consequently, accounting firms and CPAs needn’t worry about security when empowering mobile access to a QuickBooks terminal server.

With QuickBooks cloud hosting, mobile workers can access the application from anywhere, without any physical or device constraints. This increases database access speed, since there are no bandwidth restrictions. Users experience the very same QuickBooks functionality on the terminal server as they do on their desktops.

Beyond the seamless operational benefits of QuickBooks hosting for the manufacturer and its remote workers, several other advantages come into play. QuickBooks hosted in the cloud does not require hardware installation or configuration on the servers. Because servers are set up and monitored at the CSP’s remote location, the organization does not incur any capital or operational expenses. System scalability also reduces costs — accounting firms can scale up or down as needed. The “pay as you go” business model of QuickBooks terminal server hosting makes it especially useful at tax time. Rather than buying new hardware to accommodate the additional QuickBooks workload, the firm can simply scale up in January and scale down after April 15 (or the quarterly filing period, as the case may be).

QuickBooks hosting on terminal servers is tends to be extremely reliable, and the CSP’s expertise can further minimize downtime. Because users gain access to an application that is in all ways identical to its desktop counterpart, there is no additional learning curve.

As an accountant might say, it all adds up: QuickBooks terminal server hosting is a smart option for accounting firms and those manufacturers who want to increase the productivity and efficiency of their mobile workforce.

Adam Stern is founder and CEO of Infinitely Virtual (www.infinitelyvirtual.com), which offers cloud-based InfiniteERP. Twitter- @iv_cloudhosting.

QuickBooks WooCommerce Integration / eCommerce Shopping Cart Integration for QuickBooks, Sage 50

CartSpan writes: OK, so you’ve setup your ‘free’ WooCommerce shop in record time within your WordPress environment and are quickly overwhelmed by orders; a business condition that creates both stress and excitement at the same time. 

 

While there are low-cost (and some free) tools that can be used to simply ‘get your orders into the accounting system’, a well-designed (and supported) commercial integration can actually help you sell more product and pay for itself in an extremely short period of time.

This has less to do with the order import side of the equation than with the practice of effective stock management between systems. If you have a significant number of products to manage and don’t update availability in WooCommerce in a timely manner, you are losing significant income opportunities.

Hard Benefits: CartSpan provides a deep integration with both QuickBooks and Sage 50 to provide you with near real-time updates of product availability in your store. So, as soon as you receive stock into the accounting system or accept a new order over the phone, CartSpan sees the new inventory and will pushes an updated quantity-available to WooCommerce. If you are a manufacturer, CartSpan offers a stock management feature that projects how many of an assembled item you can offer based upon supporting stock. See our blog post, Inventory Management for Assembled Product Types, for details on how this feature can increase your earnings.

Here is how CartSpan customer Elizabeth Dirks, Operations Manager of Hair & Compounds Inc., describes their WooCommerce integration experience:

“When roughing out the decision to redesign our website and online store, our customer service people had one request – Sage 50 integration! With some research we found CartSpan was one of the only solutions that had exactly the functionality we required. All we needed was inventory updates and order downloading. What made our simple requirements more complicated is that our inventory has hundreds of variations under a few master stock items. CartSpan’s configuration features allows us to easily handle inventory variations and keep each sub-stock item updated with latest prices and stock quantity. It also made what seemed a huge and daunting task of integrating with our established system very simple and quite easy.”

“CartSpan is a fantastic product for anyone in need of Sage 50 integration (or QuickBooks) with their online store and worth every penny to invest in this product.”

Soft Benefits: Don’t discount the ‘softer’ side of how a good integration can maximize the use your accounting system. If you are constantly changing, adjusting, or ‘tweaking’ your imports to reflect how you do business, you might ask yourself, Am I really saving that much time? CartSpan is built for QuickBooks and Sage 50 and maximizes integration opportunities to each. These finer points of integration can be found on our Product Features page for order imports as well as for inventory updates.

To ‘piggy-back’ on a well-known phrase, “CartSpan integrates your WooCommerce with QuickBooks…beautifully.”

Citrix ShareFile Now Integrates With QuickBooks Online, Xero, FreshBooks and Basecamp in Partnership with GetApp

GetApp announced today new Citrix ShareFile Integrations designed to improve workflow for users of several popular online accounting software and project management apps. The new integrations enable QuickBooks Online, FreshBooks, Xero and Basecamp users to store and retrieve files directly from ShareFile so those files can be securely shared, stored, tracked, edited and annotated from anywhere in the world.

The growing popularity of Software as a Service (SaaS) applications continues to drive the adoption of ShareFile, a secure file sharing and syncing solution popular among small and medium-sized businesses (SMBs). The introduction of these new integrations, which are available immediately for all ShareFile SMB users, further improves workflow capabilities and makes it easier for companies to migrate their offices to the cloud. 

The new integrations with market-leading accounting apps QuickBooks Online, FreshBooks and Xero allow users to export documents such as invoices automatically into the designated ShareFile folders of their choosing. The integration with Basecamp ensures that project management files--which for certain industries like construction can be too large for email or flash drives--can be stored automatically within ShareFile folders and accessed from anywhere. With ShareFile, users have a safe and secure copy of their documents that can be synced to their desktop, shared securely with colleagues and clients, and even edited and annotated on the go with ShareFile mobile apps.

"From document creation to execution, ShareFile empowers users to swiftly take care of business whenever and wherever. To that end, we continue to invest in integrations that help our customers be more productive," said Grady Slane, Product Marketing Manager, Citrix.

Citrix leveraged GetApp Integrations capabilities to develop rapidly and to automate these valuable integrations to customer workflows that help eliminate wasted effort while increasing productivity. GetApp provides an integrations Platform as a Service (iPaaS) that delivers value by integrating cloud-based business software fast without the usual cost and time associated with developing and maintaining them.

"Integrations development was a logical direction for GetApp to head, since we've spent the last five years building relationships with each industry's business software leaders," said Christophe Primault, GetApp's CEO. "As the SaaS marketplace continues to get more competitive, we provide solutions for these software companies to generate more qualified leads, one of which is through our iPaaS. We're excited that the household name ShareFile is one of our first customers in this new business venture."

For more information about Citrix ShareFile, please visit: http://www.sharefile.com.

Citrix® and Citrix ShareFile® are trademarks or registered trademarks of Citrix Systems, Inc. and/or one or more of its subsidiaries, and may be registered in the U.S. Patent and Trademark Office and in other countries.

About GetApp

GetApp is the largest independent online marketplace that helps small to mid-sized businesses and start-ups discover, evaluate and manage the perfect business apps for their needs. Its mission is to support millions of users in their "best app" research with comprehensive directories, interactive search tools, side-by-side comparison tables, user reviews and app evaluation resources.

India: MakeMyReturns.com launches India's first tax filing mobile app

MakeMyReturns.com, has announced the launch of a new app which can be used by mobile phone and tablet users for filing their income tax returns. Different from the already existing income tax calculator apps that are available, this is the first tax filing app which has been launched by a tax filing company in India.

Speaking about the idea behind launching such an app, Mr. Vikram Ramchand, founder at MakeMyReturns.com says, "The mobile landscape in India has been witnessing a drastic change especially with the advent of smartphones. A lot of internet consumption now takes place on mobile phones itself. Hence, this app will give taxpayers the freedom to file their returns from just about anywhere as they don't necessarily have to log in to a computer or physically go to a chartered accountant".

The app is very easy to use and can be downloaded by any android or iphone user. One simply has to download the app from the Google play store or Apple store. Once downloaded, the user has to create his/her account, fill in their personal information, salary details, home loan information if any, interest income if any, check their deductions and finally file their returns. With all the necessary information in place, the entire process only takes about 10 minutes to complete. In case of any issues while filing, one can also report the issue directly to the customer service department by using the app itself.

As safety and security is one of the common concerns of people, Make My Returns reassures that every return that is filed with them goes through the most secure and technologically advanced servers. After filing their returns, they can keep a track of all the sections and maintain a summary of their tax filing on the app itself. Every customer is also given customer service assistance right till the end of the process irrespective of whether they choose to opt to self-file their income tax returns free of cost or ask for expert/premium assistance.

Make My Returns has always believed simplifying taxes for the tax payer. Hence, in the long run the company plans to launch several new features in addition to their existing products which will change the way tax filing is done in India. One of their latest features enables the user to interact with a dedicated chartered accountant that works like a direct one-on-one conversation.Further adding to it Mr. Ramchand says, "In the long term, we are planning to automate our platform to the extent that a person would need only his/her PAN (Permanent Account Number) to use the system which will automatically pull up all the data required for filing their returns, which will make life much easier for any tax payer".

Top 10 Reasons to Visit IRS.gov this Summer

If you need tax help or information, your best option is to visit the IRS.gov website. Our many online tools and services make it easy for you to do business with the IRS. Here are ten good reasons to visit IRS.gov this summer:

1. Use IRS Free File.  If you still need to file your 2013 tax return, you can e-file for free by using IRS Free File through Oct. 15. If you earned $58,000 or less you can prepare and e-file your taxes using tax software for free. If you made more, you can use Free File Fillable Forms to e-file for free. This option is the electronic version of IRS paper forms. 

2. Check on your refund.  The Where’s My Refund? tool is a fast and easy way to check on your tax refund. Use the IRS2Go mobile app to access it or click on the ‘Refunds’ tab on IRS.gov.

3. Try IRS Direct Pay.  If you owe taxes, pay with IRS Direct Pay, our safe, easy and free way to pay from your checking or savings account. Just click on the ‘Pay Your Tax Bill’ link on the IRS home page.

4. Apply for an IRS payment plan.  If you can’t pay all your taxes at once, apply for an IRS Online Payment Agreement. A direct debit payment plan is a great way to pay. It has a lower set-up fee, you won’t miss a payment and you won’t get an IRS reminder to send a check each month.

5. Correct your tax withholding.  If you got a big refund or owed a large amount of tax when you filed your tax return, then you may need to change your tax withholding. To make a change, complete and give your employer a new Form W-4, Employee's Withholding Allowance Certificate. The IRS Withholding Calculator tool can help you fill out a new Form W-4.

6. Get health care tax information.  The IRS website also has information about the Affordable Care Act tax provisions at IRS.gov/aca. You can visit this site for educational material that describes how the health care law tax provisions affect individuals and businesses. The pages provide information about tax provisions that are in effect now and those that will go into effect in 2015 and beyond. You can find information about the law and its provisions, legal guidance, the latest news, frequently asked questions and links to additional resources.

7. Get a tax transcript.  If you apply for a loan or student financial aid, you may need a tax transcript. Visit IRS.gov and use the Get Transcript tool.

8. Check out a charity.  You must donate to a qualified charity if you want to deduct the gift on your tax return. Use the IRS Select Check tool to see if a charity is qualified.

9. Get answers to tax questions.  The Interactive Tax Assistant covers many common tax topics. Type in your question or search terms and it can lead you step-by-step to the answer. The IRS Tax Map gives you a single point of access to tax law information by subject. It integrates tax topics, forms, instructions and publications into one research tool.

10. Get forms and publications.  View, download and print federal tax forms and publications anytime you want.

tax efficient withdrawals in retirement

Over at Bogleheads we came across the following discussion: 

tax efficient withdrawals in retirement

by SGM » Sun Jul 13, 2014 9:51 pm

I had been thinking taxable, then traditional then Roth withdrawals in retirement. Probably not taking Roth withdrawals until my 80s or 90s or not at all. I had pretty much been thinking of marginal tax rates, but that leaves out some potential tax free withdrawals from traditional IRAs. I will be in a high tax bracket in retirement.

Some IRA funds can be removed at the zero tax rate. If you have a lot of income that is fully taxable it doesn't work out.

Standard deduction for over 65 is 7,750 and personal exemption is 3,750. Withdraw 11,750 at the zero rate.

Then withdraw from traditional IRA up to the top of the 15% bracket. Some of that is taxed at 10%.

It seems to me this would allow a portfolio to last longer than taking all from taxable and when that is depleted take all withdrawals up to 15% tax rate from traditional IRAs until depleted and the balance of spending money from Roths. When the traditional IRA is completed all withdrawals are from Roths.

It also seems that this would be true if most of the income is from long term capital gains and qualified dividends or muni bonds. Unqualified dividends and other fully taxed income in larger amounts would make this approach less advantageous or not advantageous at all as they would fill up the zero, 10% and 15% brackets. For higher incomes the withdrawals would be advantageous unless the withdrawals put you in a higher bracket, kick in extra Medicare costs, or put you into the alternative minimum tax range or if you have already filled those lower levels with fully taxable income.

I am wondering if this makes sense to others, and if anyone has looked at a spreadsheet for calculating this. I don't really want to plug these numbers into a tax program as I am looking at differences over 30 to 35 years out and there are multiple scenarios that would be more easily handled by a spreadsheet.

SGM

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Re: tax efficient withdrawals in retirement

by Watty » Sun Jul 13, 2014 10:05 pm

If you have not already seen it, then take a look at this wiki

http://www.bogleheads.org/wiki/Principl ... _placement

For people in high tax brackets there are tax effecient mutual funds and muni bond funds that will help control the taxes.

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Re: tax efficient withdrawals in retirement

by livesoft » Sun Jul 13, 2014 10:10 pm

You are thinking correctly that withdrawing simultaneously rather than sequentially from multiple types of accounts may give you the lowest overall tax cost. Perhaps not so obvious is that sometimes withdrawing a portion from a Roth earlier rather than saving those withdrawals until the end can also reduce taxes.

Some discussion on all this was in this ZERO taxes thread: viewtopic.php?t=87471 where an example of using the Optimal Retirement withdrawal calculator ( http://www.i-orp.com new features added in past 2 weeks! ) was shown along with some turbotax discussion.

It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.

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Re: tax efficient withdrawals in retirement

by DSInvestor » Sun Jul 13, 2014 10:13 pm

If you have assets in taxable and are not receiving social security or pension income to leave your 0% tax bracket wide open, you may want to consider Roth conversion to consume the 0% tax bracket rather than withdrawal from your Traditional accounts. Any QDI and LTCG thrown off by the assets in taxable will be taxed at 0% up to the top of the 15% bracket. State taxes may apply though.

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Re: tax efficient withdrawals in retirement

by sscritic » Sun Jul 13, 2014 10:16 pm

SGM wrote:I will be in a high tax bracket in retirement.

I don't think of 15% as high.

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