Monday, April 15, 2019, was the tax deadline for most taxpayers to file their tax returns. If you haven’t filed a 2018 tax return yet, it’s not too late.

First, gather any information related to income and deductions for the tax years for which a return is required to be filed, then call the office.

If you’re owed money, then the sooner you file, the sooner you’ll get your refund. If you owe taxes, file and pay as soon as you can, which will stop the interest and penalties you owe.

If you owe money but can’t pay the IRS in full, pay as much as you can when you file your tax return to minimize penalties and interest. The IRS will work with taxpayers suffering financial hardship. If you continue to ignore your tax bill, the IRS may take collection action.

Some taxpayers may have extra time to file their tax returns and pay any taxes due. These include: individuals living or working in federally declared disaster areas, military service members and eligible support personnel in combat zones, and U.S. citizens and resident aliens who live and work outside the U.S. and Puerto Rico.

How to Make a Payment

There are several ways to make a payment on your taxes. Payments can be made by credit card, electronic funds transfer, check, money order, cashier’s check, or cash. If you pay your federal taxes using a major credit card or debit card, there is no IRS fee for credit or debit card payments, but processing companies may charge a convenience fee or flat fee. It is important to review all your options. The interest rates on a loan or credit card could be lower than the combination of penalties and interest imposed by the Internal Revenue Code.

What to do if you Can’t Pay in Full

Taxpayers unable to pay the amount owed on a tax bill are encouraged to pay as much as possible. By paying as much as possible now, the amount of interest and penalties owed will be less than if you pay nothing at all. Based on individual circumstances, a taxpayer could qualify for an extension of time to pay, an installment agreement, a temporary delay, or an offer in compromise. Don’t hesitate to call if you have questions about any of these options.

Direct Pay. For individuals, IRS Direct Pay is a fast and free way to pay directly from your checking or savings account. Taxpayers who need more time to pay can set up either a short-term payment extension or a monthly payment plan.

Payment Plans. Most people can set up a monthly payment plan or installment agreement that gives a taxpayer more time to pay. However, penalties and interest will continue to be charged on the unpaid portion of the debt throughout the duration of the installment agreement/payment plan. You should pay as much as possible before entering into an installment agreement.

Taxpayers who have a history of filing and paying on time often qualify for penalty relief. A taxpayer generally qualifies if they have filed and paid timely for the past three years and meet other requirements.

Your specific tax situation will determine which payment options are available to you. Payment options include full payment, a short-term payment plan (paying in 120 days or less) or a long-term payment plan (installment agreement) (paying in more than 120 days). User fees may apply, depending on the type of installment plan you are approved for. A sole proprietor or independent contractor should apply for a payment plan as an individual.

You may qualify to apply online if:

• Long-term payment plan (installment agreement): You owe $50,000 or less in combined tax, penalties and interest, and filed all required returns.
• Short-term payment plan: You owe less than $100,000 in combined tax, penalties and interest.

Cash Payments. Individual taxpayers who do not have a bank account or credit card and need to pay their tax bill using cash, are able to make a cash payment at participating PayNearMe payment locations (places like 7-Eleven) in 44 states. Individuals wishing to take advantage of this payment option should visit the IRS.gov payments page, select the cash option in the other ways you can pay section and follow the instructions.

What Happens if you don’t File a Past Due Return

It’s important to understand the ramifications of not filing a past due return and the steps that the IRS will take. Taxpayers who continue to not file a required return and fail to respond to IRS requests for a return may be considered for a variety of enforcement actions–including substantial penalties and fees. For example, the failure-to-file penalty is 5 percent of the tax owed for each month or part of a month that a tax return is late. However, this penalty is reduced for any month where the failure to pay penalty also applies. The basic failure-to-pay penalty rate is generally 0.5 percent of unpaid tax owed for each month or part of a month.

Need Help Filing your 2018 Tax Return?

If you haven’t filed a tax return yet, don’t delay. Call the office today to schedule an appointment as soon as possible.

• By Leon Clinton
• May 3, 2019

May 10

Employees who work for tips – If you received $20 or more in tips during April, report them to your employer. You can use Form 4070.

Employers – Social Security, Medicare, and withheld income tax. File Form 941 for the first quarter of 2019. This due date applies only if you deposited the tax for the quarter in full and on time.

May 15

Employers – Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in April.

Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in April.

• By Leon Clinton
• May 1, 2019

Last month, we showed you how to start building a foundation for tracking jobs in QuickBooks. We explained that you can use the software’s jobs tools to track income and expenses for any related group of items and/or services (you can think of them as projects, if you prefer).

We covered three elements of preparing to use “jobs”:

• Creating job records that you can use in transactions (example: develop promotional materials)
• Creating item records that can be assigned to jobs (example: website development)
• Determining whether you’ll need to create a new account in your Chart of Accounts for your job income and expenses. You should consult with a QuickBooks professional anytime you think it might be necessary to modify the Chart of Accounts.

Using Your Job-Related Records

Now that you’ve recorded the items and jobs themselves, you can start using them in transactions, and eventually track your progress by generating reports.

Let’s say you worked eight hours on website development for your promotion job. You would open the Employees menu and select Enter Time | Time/Enter Single Activity to open this window:

Figure 1: You can enter individual, billable activities and assign them to jobs.

In the example above, you are limited to recording one day’s work on a specific SERVICE ITEM. You would verify the date and select from the drop-down lists to complete the fields for employee NAME, CUSTOMER:JOB, and SERVICE ITEM. You can either use the timer to time the job or enter the number of hours manually in the DURATIONbox. Click in the Billable box to create a checkmark and add NOTES if you would like. The CLASS field is optional; talk to us if you’re not familiar with this feature.

If you worked on two separate service items on the same day for that CUSTOMER:JOB, you would create two individual records. You can also enter billable activities directly on a timesheet by clicking Employees | Enter Time | Use Weekly Timesheet. Once you select the employee NAME at the top, any single activity(ies) you created that week will appear as individual records, and vice versa.

Writing a check or using a credit card for a job-related purchase that should be billed to the customer? You would fill out these forms in QuickBooks like you usually do, making sure that you document the items or services by highlighting the Items tab, select the correct CUSTOMER:JOB, and make a checkmark in the BILLABLE? column.

Figure 2: If you write a check or charge your credit card for purchases that can be billed to a CUSTOMER:JOB, be sure to record it in QuickBooks.

If you will be doing some billable driving for your job, you should also be tracking your mileage in QuickBooks. Open the Company menu and select Enter Vehicle Mileage. If you haven’t created a VEHICLE record in QuickBooks, click and easily do so. Complete the rest of the fields and save.

Tip: Do you want to see some of your overhead expenses on job costing reports? Create a CUSTOMER:JOB named “Overhead” and assign related costs to it.

Billing the Billables

When the time comes to invoice your customers (Customers | Create Invoices), you’ll see how your careful work in QuickBooks simplifies that task. Open an invoice form and select a CUSTOMER:JOB. If you’ve entered billable items for him or her, this small window will open:

Figure 3: When you create an invoice for a CUSTOMER:JOB who has billable time, mileage, or other expenses, QuickBooks can automatically add them.

If you leave the first option checked and click OK, another window will open that lists all of the expenses you’ve marked as billable to the customer, arranged by type. Click in the first column of each expense you want to include and click OK. Your invoice containing those entries will open. Do any editing necessary, and then save it.

Note: You’ll probably notice two fields in the Choose Billable Time and Costs window that refer to Markup. This is an advanced concept that we can explore with you, should you want to charge customers more for expenses you’ve incurred on their behalf.

Related Reports

QuickBooks contains a wide variety of reports related to your work billing customers for jobs. Click Reports in the navigation pane or Windows menu, then Jobs, Time & Mileage to see what’s available. Choose a date range and click Run to see them appear with your own data.

If you’ve never worked with jobs in QuickBooks, we strongly recommend that you let us help you here. There are a lot of moving parts, and you don’t want to miss out on any of your efforts or expenses that are billable.

• By Leon Clinton
• April 30, 2019