Month: July 2018

You know how important it is to obtain receipts for the expenses you and your employees incur. You need to record them, analyze their impact on your cash flow, and claim some of them on your income taxes.

Your customers, too, expect to receive forms documenting purchases they’ve made from you. When they pay you immediately for goods or services, you’ll give them a sales receipt, rather than invoicing them for future remittance. Not only will your customers have a record of the transaction–you will, too.

QuickBooks supports the creation and tracking of sales receipts. It manages the mechanics of this important task incredibly well and eliminates the need to enter receipt data twice, once on a paper copy for your customer and again in your accounting system. This QuickBooks feature not only minimizes errors but saves time and lessens the possibility of disputes down the road.

A Simple Form

Here’s an example of a situation that illustrates the importance of really learning about and understanding QuickBooks before you start entering live data. Say you got a check from a customer on the spot for a house painting job you completed. When you look at QuickBooks’ home page, which icon do you click?

You might be tempted to click Receive Payments since that’s exactly what you are doing. But that screen is reserved for revenue that comes in to satisfy outstanding invoices and unpaid items on billing statements. Instead, you would click Create Sales Receipts to open the Enter Sales Receipts window. Here’s a partial view of what you would see:

Figure 1: When a customer pays you immediately for goods or services, you need to open and complete the Enter Sales Receipts window. 

If you’ve already entered your customer and item/service records in QuickBooks, you can record your sale very quickly here. Even if you haven’t, or if you need to create a new record on the fly, you can selectwhen you open the drop-down option lists for the Customer:Job and Item fields.

Warning: Do you need to track inventory levels for products you sell? Have you created accurate records for these items? There is information that QuickBooks needs to help ensure that you don’t run out of stock or keep too much on hand. Let a QuickBooks professional walk you through the software’s inventory-management tools so you can take advantage of all the benefits it offers.

Once you’ve selected the appropriate customer, Class (if you use this feature), and Template (Here again, do you understand that you can either use the default sales receipt form provided by QuickBooks or customize it? We can help here), make sure that the Date and Sale No. are correct.

Next, click on the icon representing the transaction’s payment method, choosing from Cash, Check, Credit Card, or eCheck. Click the Morebutton if your method isn’t listed there. Here, you can add new options by selecting Add New Payment Method. A small window will open allowing this. If you want to modify this list further by editing and deleting the default methods for example, simply clear and close the current sales receipt, and then open the Lists menu, and select Customer & Vendor Profile Lists | Payment Method List. This window will open:

Figure 2: Click the down arrow in the Payment Method field near the bottom of this window to see your modification options. 

Once you have chosen the desired Payment Method (and entered a check number if necessary), complete the rest of the sales receipt much like you would an invoice, by selecting the correct products or services, the quantity you are selling, and the transaction’s tax status. QuickBooks will fill in the rest if you ‘ve created complete item records.

When you are done save the sales receipt. Information about the transaction will be available in standard places like the Customer Information screens and various reports.

Whether your revenue is generated instantly (i.e., documented by a sales receipt) or as longer-term payment on an invoice, your company’s income is just one element of the cash flow equation. Are you able to create and interpret the reports that can help you understand these complex calculations, like Cash Flow Forecast and Profit & Loss? You probably run some of QuickBooks’ more basic sales reports regularly, but consider bringing in a QuickBooks expert to do the deep analysis needed to make better business decisions.

• By Leon Clinton
• July 29, 2018

Section 965 of the Internal Revenue Code, enacted in December 2017, imposes a transition tax on untaxed foreign earnings of foreign corporations owned by U.S. shareholders by deeming those earnings to be repatriated. Foreign earnings held in the form of cash and cash equivalents are taxed at a 15.5 percent rate, and the remaining earnings are taxed at an 8 percent rate. The transition tax generally may be paid in installments over an eight-year period when a taxpayer files a timely election under section 965(h).

Late-payment and filing penalty relief is now available for taxpayers affected by the section 965 transition tax, in accordance with the following guidance:

• In some instances, the IRS will waive the estimated tax penalty for taxpayers subject to the transition tax who improperly attempted to apply a 2017 calculated overpayment to their 2018 estimated tax, as long as they make all required estimated tax payments by June 15, 2018.
• For individual taxpayers who missed the April 18, 2018, deadline for making the first of the eight annual installment payments, the IRS will waive the late-payment penalty if the installment is paid in full by April 15, 2019. Absent this relief, a taxpayer’s remaining installments over the eight-year period would have become due immediately. This relief is only available if the individual’s total transition tax liability is less than $1 million. Interest will still be due. Later deadlines apply to certain individuals who live and work outside the U.S.
• Individuals who have already filed a 2017 return without electing to pay the transition tax in eight annual installments can still make the election by filing a 2017 Form 1040X, Amended U.S. Individual Income Tax Return with the IRS. The amended Form 1040 generally must be filed by October 15, 2018.

For more information about the transition tax and other tax reform provisions, don’t hesitate to call.

• By Leon Clinton
• July 26, 2018

As hurricane season gets underway–and with it, the possibility of scam groups masquerading as charitable organizations–taxpayers should know about the new tax-exempt organization search tool. Located on the IRS website, the Tax Exempt Organization Search (TEOS) tool replaces the EO Select Check tool and enables taxpayers to search and access information about tax-exempt organizations quickly. TEOS is mobile friendly as well, accessible on tablets or smartphones.

When you use the new TEOS tool you will be able to:

• Access images of an organization’s forms 990, 990-EZ, 990-PF, and 990-T filed with the IRS. Initially, only 990 series forms filed in January and February 2018 will be available. New filings will be added monthly.
• Find out additional information about exempt organizations than was previously available using EO Select Check.
• Conduct a simplified search process.
• Access favorable determination letters issued by the IRS when an organization applied for and met the requirements for tax-exempt status. At first, a limited number of determination letters will be available. Determination letters issued since January 2014 will also be available in the future.

Taxpayers can use TEOS to find information previously available on EO Select Check including whether an organization:

• Is eligible to receive tax-deductible contributions.
• Has had its tax-exempt status revoked because it failed to file required forms or notices

for three consecutive years.

• Filed a Form 990-N annual electronic notice with the IRS; this applies to small organizations only.

Publicly available data from electronically-filed 990 forms are still available through Amazon Web Services. Please call or visit the IRS website for additional details. If you have any other questions about the new TEOS tool, don’t hesitate to contact the office.

• By Leon Clinton
• July 24, 2018