Author: Leon Clinton

Tax

5 Last Minute Tax Tips for 2013

Are you one of the millions of Americans who haven’t filed (or even started) your taxes yet? With the April 15th tax filing deadline less than two weeks away, here’s some last minute tax advice for you.

      1. Stop Procrastinating. Resist the temptation to put off your taxes until the very last minute. Our office needs time to prepare your return, and we may need to request certain documents from you, which will take additional time.
      2. Include All Income. If you had a side job in addition to a regular job, you might have received a Form 1099-MISC. Make sure you include that income when you file your tax return because you may owe additional taxes on it. If you forget to include it you may be liable for penalties and interest on the unreported income.
      3. File on Time or Request an Extension. This year’s tax deadline is April 15. If the clock runs out, you can get an automatic six-month extension, bringing the filing date to October 15, 2013. The extension itself does not give you more time to pay any taxes due. You will owe interest on any amount not paid by the April deadline, plus a late-payment penalty if you have not paid at least 90 percent of your total tax by that date.

Call us if you need to file an extension and we’ll take care of it for you. If you need to file for late-penalty relief, we can help with that to. See Late-Penalty Relief for Late Filers under Tax Tips below)

    1. Don’t Panic If You Can’t Pay. If you can’t immediately pay the taxes you owe, consider some alternatives. You can apply for an IRS installment agreement, suggesting your own monthly payment amount and due date, and getting a reduced late-payment penalty rate. You also have various options for charging your balance on a credit card. There is no IRS fee for credit card payments, but the processing companies charge a convenience fee. Electronic filers with a balance due can file early and authorize the government’s financial agent to take the money directly from their checking or savings account on the April due date, with no fee.
    2. Sign and Double Check Your Return. The IRS will not process tax returns that aren’t signed, so make sure you sign and date your return. You should also double check your social security number, as well as any electronic payment or direct deposit numbers, and make sure that your filing status is correct.

Remember: Get your documents to us as soon as you can, and we’ll help you take care of whatever comes up.

Accounting Quickbooks

Use QuickBooks’ Tools to Prevent Financial Fraud

Whether your accounting tasks are done on a single PC or you have multiple users working on different screens, it’s critical that you make use of all that QuickBooks offers in terms of internal controls.

First Stop: Audit Trail

An audit trail is a very large report that displays every addition, deletion and modification of every transaction. In older versions of QuickBooks you could turn it on and off, but it’s permanently on now.

Because of its size, you’ll probably have to use QuickBooks’ filtering tools to zero in on the user and/or date(s) you’re looking for. Go to Reports | Accountant & Taxes | Audit Trail. Click Customize Report | Filters to set up your search.

Your audit trail won’t alert you when someone tries to enter a prohibited area, and it won’t detect changes to lists. Setting up permissions will help (Company | Set Up Users and Passwords | Set Up Users), but you need more than that.


Figure 1: Be especially careful when granting user access to areas that contain customer, vendor and employee information. 

Run the Right Reports

Other QuickBooks features help prevent fraud as well. Review these reports regularly:

  • Closing Date Exception. Why were those changes necessary?
  • Voided/Deleted Transactions. Is there supporting documentation? Should you be reviewing these daily?
  • Expenses by Vendor Detail. Look for irregularities, especially multiple payments made to a vendor in a short period of time.
  • Check registers. Use the Balance Sheet for this. Go to Reports | Company & Financial | Balance Sheet Standard and customize the report for the correct period and, if necessary, for specific customers, vendors and/or jobs.

Adhere to Best Practices

You undoubtedly implement financial best practices in your personal life. You reconcile your accounts. You don’t give your online banking password to anyone. And you glance through your recently-posted transactions on your financial institutions’ websites.

If your company is large enough that you have multiple accounting employees, you probably can’t be as hands-on as you are at home. But you can still set up internal control procedures.


Figure 2: Debit? Credit? Reverse the transaction? No one should be making General Journal entries but you. It’s easy to err here; talk to us before using this feature. 

For example, if your company has grown to the point where you’re removed from the daily workflow, you may still want to have approval rights for some procedures, like bank balance adjustments, refunds and credits, printed checks (you should still be signing them), timesheets and expense reports.

It goes without saying that you should password-protect your QuickBooks company file and change the password regularly, even–and especially–if you are the entire accounting department. It’s important to protect yourself from external fraud too. We can do a review of your security procedures and make suggestions.

Reinforce the Rules


Figure 3: Anyone in your company who has access to accounting data should have a background check. 

Know who your employees are (consider running background checks) and, if you can, rotate the duties assigned to accounting staff. If you have only one person managing all of your bookkeeping work, conduct an even more thorough background search: credit, references, and criminal activity.

Finally, make sure that all employees understand the definition and consequences of fraud. Let them know about the steps being taken to prevent it, but do some unannounced auditing on your own. Include a session on fraud in orientation and get current staff up to speed. Explain that this is necessary for their protection, too. Make it easy to report fraud anonymously, with no fear of repercussions.

This may seem like a lot of extra tasks in your workday, but imagine the time you’ll lose tracking down fraudulent activity if it occurs.

If you have questions on this subject, or anything else, don’t hesitate to email or give us a call. We’re here to be your partner.

Tax

Tax Relief Extended for Victims of Hurricane Sandy

In the aftermath of Hurricane Sandy, the Internal Revenue Service announced additional tax relief to affected individuals and businesses, further extending tax deadlines until April 1 for the following FEMA-designated counties:

  1. In New Jersey (starting October 26): Monmouth and Ocean counties.
  2. In New York (starting October 27): Nassau, Queens, Richmond and Suffolk Counties.

In addition, the IRS will work with any taxpayer who resides outside the disaster area but whose books, records or tax professional are located in the areas affected by Hurricane Sandy. All workers assisting the relief activities in the covered disaster areas who are affiliated with a recognized government or philanthropic organization are eligible for relief.

This tax relief postpones various tax filing and payment deadlines that occurred starting in late October. As a result, affected individuals and businesses have until April 1, 2013, to file these returns and pay any taxes due. This includes the fourth quarter individual estimated tax payment, normally due January 15, 2013. It also includes payroll and excise tax returns and accompanying payments for the third and fourth quarters, normally due on October 31, 2012 and January 31, 2013 respectively, and calendar year corporate income tax returns due March 15. Tax-exempt organizations required to file Form 990 series returns with an original or extended deadline falling during this period also qualify for this tax relief.

The IRS will abate any interest, late-payment or late-filing penalty that would otherwise apply to any taxpayer located in the disaster area.

Contact us today if you’re a taxpayer living outside of the impacted area and think you may qualify for this relief.

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