Key Tax Deadlines – January 2013

Posted on December 31, 2012 | Comments Off on Key Tax Deadlines – January 2013

The usual employer tax deadlines continue through the month for paying over tax payments to the IRS. If you have been paying quarterly remember to check each quarter that you are still eligible to do so. The test only goes back one quarter. Also, perform your annual test to see if your payment period has changed. For most employers the test is based on your total payroll deposits in the year to June 2012. If you don’t know how to do the test call your tax advisor for assistance.

Other tax deadlines this month include:

January 10 – Employees must report to their employer all tips for December if they total more than $20.
January 15 – Individuals pay their fourth and final installment of estimated taxes for 2012.
January 30 – E-filing starts for 2012 individual tax returns. This is about two weeks later than normal. You can paper file before this date but it will take longer to receive any refund. In general e-filing is the best way to file your tax return.
January 31 – A whole string of tax forms need to be supplied to the recipients by today. These include W-2s for your employees, 1098, 1099 and W-2G.
January 31 – Deposit any FUTA tax owed for the 2012 year.

With tax season starting this month it is time to get your tax records together so that you can file your tax return. If you need help with identifying what information is required, download and have a look at our 2012 Tax Organizer.

Also if you what some guidance on choosing a tax preparer read our recent article Tips For Finding A Paid Tax Preparer.

Disclaimer – This article does not constitute personal tax advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax planning depends on your personal and unique circumstances.

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At Work For Arizona Business Loan Alliance

Posted on December 20, 2012 | Comments Off on At Work For Arizona Business Loan Alliance

A new alliance of Phoenix based private and public organizations has created a $12 million fund to support local businesses. The fund will provide business loans of between $50,000 and $500,000 at favorable interest rates to businesses who lack equity or have sufficient collateral for a conventional loan.

This will be another useful source of capital for Phoenix and Arizona businesses needing to raise capital to expand their business.

The members of the alliance are:

The loans are designed to assist growing businesses in Arizona who might otherwise not be able to access the capital they need to expand. The targeted businesses cover a wide range of industries including manufacturing, information technology, healthcare, renewable energy and many others.

To be eligible for a business loan the applicant business must:

  • Have been in operation for at least two years
  • Demonstrate a successful track record for the last three quarters
  • Have two years of financial statements and tax returns

The loans will be available for most business purposes such as working capital, equipment and fixed asset purchases, inventory purchases as well as real estate investment and tenant improvements.

In an attempt to assist growing business the loans will be on more beneficial terms than conventional loans with an expedited loan request process.

The initial funding totals $12 million and will be available for 12 months or until the funds have been fully used. The amount being made available is fairly modest so if you are interested in applying for a loan you probably shouldn’t wait too long.

If you want to apply for a business loan under this scheme contact Kristine Beaird at the Phoenix Community Development & Investment Corporation, 602-256-3211 or Kristine.beaird@phoenix.gov.

For assistance with the loan application process particularly in the areas of preparing financial statements, management accounts, tax returns or business plans call us on (480) 363-4808 or email info@cranmereaccountingandtax.com for a free 1 hour initial consultation. Mark Smith who has previous experience of working for the lending department of a major bank will be pleased to work with you on your expansion plans.

Disclaimer – This article does not constitute personal tax or accounting advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax and financial planning depends on your personal and unique circumstances.

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IRS Standard Mileage Rates Increased For 2013

Posted on December 20, 2012 | 1 Comment

In IRS Notice 2012-72 the IRS has announced the standard mileage rates for 2013. These can be used to deduct the costs of operating a car, van, pickup or panel truck for business, charitable, moving or medical purposes. The standard mileage rates can be used instead of claiming the actual costs.

For 2013 the rates are:

  • Business miles – 56.5 cents per mile (2012 – 55.5 cents per mile)
  • Medical or moving miles – 24 cents per mile (2012 – 23 cents per mile)
  • Charity miles – 14 cents per mile (2012 – 14 cents per mile)

In addition to the standard mileage rate you can also claim the following vehicle expenses:

  • Interest paid on any loan used to finance the purchase of the vehicle (Business mileage only)
  • Parking or toll fees paid
  • State and local personal property taxes for the vehicle (Business mileage only)

If you operate an accountable expense plan for your S-Corporation or for your employees you will need to update your expenses reports for the new business miles rate. This will start on January 1, 2013.

QuickBooks enables you to keep a log of your business mileage and calculate the mileage deduction. This can be useful when you are preparing monthly management accounts as well as the year end figures for your tax return.

The QuickBooks mileage rate can be updated by going to the following menu selections:
Company | Enter Vehicle Mileage | Mileage Rates – Enter in an empty line at the bottom, the effective date of 01/01/2013 and 0.565 as the rate. Finally click Close and then Yes to save the changes.

In order to claim the standard mileage rates you should keep a mileage log so that you can substantiate the miles you are claiming. The log should include the date of each trip, miles driven (or odometer readings at start and end of each trip), where you traveled to, who you visited and why you visited.

There are a number of conditions that need to be satisfied in order to use the standard mileage rate for business mileage. These include:

  • Standard mileage rates can only be used on up to 4 cars simultaneously
  • If you claim actual expenses in the first year of use including depreciation you cannot convert back to standard mileage in a later year

Whether it is beneficial to claim the standard mileage rate or actual expenses will depend on how easy it is for you to keep records of your actual expenses, how many business miles you travel compared to your private miles and the type of vehicle you use. For many people the standard mileage rate is the easiest to claim as all they need to record is a mileage log.

Disclaimer – This article does not constitute personal tax advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax planning depends on your personal and unique circumstances.

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Mark Smith Is Now A Registered Tax Return Preparer

Posted on December 6, 2012 | Comments Off on Mark Smith Is Now A Registered Tax Return Preparer

We are pleased to announce that Mark Smith, RTRP has passed the RTRP exam and has been designated as a registered tax return preparer by the Internal Revenue Service.

Mark Smith's Registered Tax Return Preparer Certificate

Starting in 2014 the only tax preparers who will be able to legally prepare tax returns for compensation will be:

  • Registered Tax Return Preparers
  • Enrolled Agents
  • CPAs
  • Attorneys

The introduction of this requirement is part of the IRS’s ongoing efforts to ensure that taxpayers receive competent and professional service during the preparation of their tax returns.

For more information on how to choose a tax preparer read our article “Tips For Finding A Paid Tax Preparer”.

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Tips For Finding A Paid Tax Preparer

Posted on December 6, 2012 | Comments Off on Tips For Finding A Paid Tax Preparer

If you need help preparing your tax return, choose a tax preparer wisely. As a taxpayer, you are legally responsible for everything reported on your tax return; whether you prepare it yourself or have someone else prepare it for you.

When selecting an individual or company to prepare your taxes, be sure to:

  • Check the person or company’s qualifications.
    (Beginning in 2014, only four types of preparers will be authorized to prepare individual returns for compensation: Enrolled Agents, Registered Tax Return Preparers, Certified Public Accountants and Attorneys. Inquire about your preparer’s professional status.)
  • Check the preparer’s history. How long have they been preparing taxes? Do they have experience in your particular circumstances? Are they supervised by a more experienced tax preparer?
  • Ask about their service fees. Do they have a fixed fee, charge by the form or charge by the hour. Do they separately charge for incidental expenses such as e-filing or supplying a hard copy of your tax return. Be particularly aware of charging by the hour or form as costs can add up quite quickly even for relatively simple tax returns.
  • Make sure they are accessible after the April due date in case you have a question about your return. This is also important if the IRS examines your return as you are more likely to get a satisfactory conclusion to the IRS examination if you are able to get assistance from the original preparer of the return.

The preparer you choose should:

  • Ask you to provide all receipts and records needed to prepare your return.
  • Not ask you to direct any part of your refund to an account that is not in your or your spouse’s name.
  • Never ask you to sign a blank return.
  • Allow you to review the completed return, including all schedules and attachments, and explain it all to you before you sign it. Remember you are responsible for the return so if you don’t understand something on it, ask before signing.
  • Sign the return and include their preparer tax identification number (PTIN) and provide you a copy. If the tax preparer will not supply their PTIN or sign the tax return do not file the return with them and choose a different preparer.

Planning for Tax Time

  • Being organized and planning ahead can save time, money and headaches at tax time. Start gathering your records and exploring your options now. You’ll have more time when you’re not up against a deadline or anxious for your refund.
  • Each household’s financial circumstances are different so it’s important to fully consider your specific situation and goals before making large financial decisions. Remember even some legitimate returns may require review and take longer so don’t count on getting your refund by a certain date to pay for something important. This is particularly true of tax returns with large refunds from claims such as Earned Income Tax Credit.

Disclaimer – This article does not constitute personal tax advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax planning depends on your personal and unique circumstances.

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QuickBooks Online November Update

Posted on November 29, 2012 | Comments Off on QuickBooks Online November Update

Intuit has continued with their monthly updates to QuickBooks Online with the November 2012 update. This is one of the advantages of using QuickBooks Online compared to the desktop version of QuickBooks. The desktop version tends to have fewer updates during the year.

The main improvements in this release are:-

  • Add Attachments To Sales Transactions – It is now possible to add attachments to sales invoices, estimates and receipts when you email those sales documents to your customer. Note that the attachment is just to sales documents not vendor bills. The maximum attachment size is 25MB. This improvement will be useful if you need to send say a contract or timesheet with the invoice. One thing to be aware is that the email with the sales invoice is not secure so if you are wanting to attach a confidential document you may want to consider a more secure way of getting it to your customer.
  • Printing Form 1096 – As we near the annual tax filing season it is good to see that you will now be able to print your Form 1096 Annual Summary and Transmittal of U.S. Information Returns. This is the form that summarizes the 1099-MISC forms when you mail them to the IRS. If you are e-filing the 1099s you do not need this form. Also note that this is only available in QuickBooks Online Plus. To print the Form 1096 go to Vendors > Vendor List > Prepare 1009-MISC Forms
  • More Financial Institutions Added – With an extra 12,000 new financial institutions added it should be easier than ever to connect QuickBooks Online to your bank. Connecting to your bank and downloading transactions is one of the time saving features of using QuickBooks Online.
  • Bank Reconciliation Report Shows Uncleared Items – The Reconciliation Report now shows uncleared checks and deposits. This will make it much easier to drill down to see if uncleared items are due to posting errors, checks that need to be re-issued or even malfeasance.
  • Report Improvements –Reports now show at the top of the page the basis, accrual or cash. This will be useful at tax return time to make sure that the correct reports are being used to prepare the tax return. Memorized reports can now be deleted for all users.

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Key Tax Deadlines – December 2012

Posted on November 29, 2012 | Comments Off on Key Tax Deadlines – December 2012

The usual employer tax deadlines continue through the month for paying over tax payments to the IRS. If you have been paying quarterly remember to check each quarter that you are still eligible to do so. The test only goes back one quarter.

As an employer now is the time to start preparing for the year end tax filings that will take place in January and February. Order your W2s and make sure that all your employee information such as addresses is up to to date. If you will need to issue 1099s to independent contractors make sure that you have their tax ID numbers and addresses on file.

Other tax deadlines this month include:

December 10 – Employees must report to their employer all tips for November if they total more than $20.
December 17 – Corporations must deposit the fourth installment of any estimated tax due.
December 31 – If you want to set up a qualified pension plan such as a 401(k) plan, it needs to be set up by the end of the tax year. Note that some other plans can be set up later and deductions still apply to the earlier year so consider all the options with your financial advisor and tax advsior.
December 31 – If you have an IRA or pension plan such as a 401(k) make sure that you have taken your Required Minimum Distribution (RMD) by this date if you are aged over 70 1/2. In the year you turn 70 1/2 you have until April 1 of the following year to take the RMD. If you do not take the RMD by the end of the year you will be charged a penalty of 50% on the RMD you do not take.

If you haven’t already started on your year end tax planning now is the time to do so.

Congress has still not resolved the “fiscal cliff” so that is clouding year end tax planning this year. However it is important to go through all the options so that you can act quickly if Congress does resolve their differences before the end of the year.

For some year end tax planning ideas read our latest newsletters.
Year End Tax Planning For Individuals
Year End Tax Planning For Businesses

Disclaimer – This article does not constitute personal tax advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax planning depends on your personal and unique circumstances.

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Mark Smith Is Now QuickBooks 2013 Certified

Posted on November 28, 2012 | Comments Off on Mark Smith Is Now QuickBooks 2013 Certified

We are pleased to announce that Mark Smith our Advanced Certified QuickBooks ProAdvisor has obtained his certification in QuickBooks 2013.

QuickBooks 2013 ProAdvisor Certificate

QuickBooks 2013 introduces a number of useful features that will help you improve your business efficiency. These include:

  • Cleaner more modern interface
  • New Navigation Bar
  • Improved customer, vendor and payroll centers
  • Increased list limits in QuickBooks Enterprise
  • Bin location tracking in QuickBooks Enterprise
  • Batch invoicing in QuickBooks for Mac
  • Links to the Intuit Payment Network in QuickBooks for Mac

Read our blog entry to learn more about what is new in QuickBooks 2013.

To book a free 1 hour consultation with Mark call us on (480) 363-4808 or by email at info@cranmereaccountingandtax.com

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Key Tax Deadlines – November 2012

Posted on October 31, 2012 | Comments Off on Key Tax Deadlines – November 2012

The usual employer tax deadlines continue through the month for paying over tax payments to the IRS. If you have been paying quarterly remember to check each quarter that you are still eligible to do so. The test only goes back one quarter.

Other tax deadlines this month include:

November 13 – Employees must report to their employer all tips for October if they total more than $20.

As this is a quiet month for tax deadlines it is a good time to do some year end tax planning. Read the latest two issues of our newsletter to see if any of the ideas in them would help you. There is a lot of uncertainty this year surrounding tax planning due to the upcoming “fiscal cliff”. Depending on how Congress deals with this it is particularly important that you work closely with your tax preparer or advisor.

Year End Tax Planning For Individuals
Year End Tax Planning For Businesses

Disclaimer – This article does not constitute personal tax advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax planning depends on your personal and unique circumstances.

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Missed October 15 Tax Deadline

Posted on October 19, 2012 | Comments Off on Missed October 15 Tax Deadline

Did you miss the October 15, 2012 tax deadline for filing your 2011 income tax return?

If so, don’t panic, things happen and the world will continue going round. However don’t procrastinate if you missed the filing deadline as it will be in your best interest to file your tax return as soon as you can.

If you are due a tax refund you are in the good position of not owing any penalties for late filing and have up to three years after the normal filing date to file your Federal income tax return. So for the 2011 return you have until April 15, 2015 to file the return and get the refund. In Arizona it is up to four years to file your Arizona State income tax return to get a refund.

However, why delay filing if you are due a refund. By not filing you are giving the Government an interest free loan but the refund would be more use in your pocket. Even if the Government will keep the refund to pay back taxes, child support or student loans it will still benefit you to file and chip away at those debts.

If you owe tax on your tax return you will be subject to a late filing penalty each month which is 5% of the tax due on your return up to a maximum of 25%. If the return is more than 60 days late the minimum penalty is the lower of $135 or the balance of the tax due. This penalty can get quite large which is why you should try and file as soon as possible.

If you did not pay the tax by April 17, 2012 you will be charged a late payment penalty of 1/2% per month up to a maximum of 25%. You will also be charged interest at the current rate of 3%.

Even if you can’t pay all the tax now it makes sense to file the return as that will stop the 5% late filing penalty.

If you will have difficulty paying all the tax now, the IRS does have various payment arrangements where you can pay the tax over a period of up to 6 years. You can get more details at the IRS Payments page.

If you missed the tax deadline and need help with filing your tax return please call Mark Smith on (480) 363-4808. We serve clients throughout the United States.

Disclaimer – This article does not constitute personal tax advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax planning depends on your personal and unique circumstances.

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