Starting in 2011, credit and debit card companies will begin reporting payments made to merchants on a new IRS form 1099-K to payees with over 200 sales transactions and over $20,000 in annual sales.  This amount will be reported on a separate line on a taxpayer’s applicable tax return, this will leave cash and check sales reported net of credit card sales on a separate line.

This change is an attempt to reduce underreporting of gross receipts by sellers of goods and services.  If a taxpayer takes cash sales out of the drawer to purchase merchandise and does not record the purchase and sale in its books and records, this change could trip up the IRS for underreporting of income, something to consider as you complete your 2011 tax return.

If your business needs a controller manager, please give me a call at (239) 384-9688 or contact me online.

-Mark
Naples & Fort Myers Accounting

Due to this continued growth, I am happy to announce that we have welcomed two new staff members to our team at Makara & Associates. We would like to introduce you to Stan English and Theresa Cosey. Please feel free to contact them at any time with questions regarding your tax returns or other accounting needs.

As we advance into 2012, the staff at Makara & Associates is continuing to find ways to ensure that you receive unparalleled customer service. In addition to increasing our staff, we have also created online resources which provide you with information and answers to your questions, 24 hours a day, 7 days a week.

Some of these resources include a new website, www.Makara-Assoc.com. This website provides you with in-depth information about various services that are available to you through Makara & Associates. It also includes a “Learn More” page, which outlines common questions about accounting practices, payroll, tax planning, controllership, Social Security, Quickbooks, and much more, providing you with comprehensive answers to these questions. In addition, we have also implemented a Blog site, www.cashflowplanningforlife.com, which further provides tips and informational resources about everything to do with accounting and financial stability for you, your family, and your business.

Again, we thank you for your continued loyalty to Makara & Associates, your referrals, and for your help in making the past 5 years a success. We look forward to many more to come!

Wishing you and your loved ones a wonderful Holiday season and a happy, prosperous New Year!

Sincerely,

Mark Makara and the Staff at Makara & Associates

P.S. You can also connect, follow, or like us on:

• LinkedIn
• Twitter
• Facebook

Finish up those small business tax strategies for 2011 and you can start the new year ready to go!

October:

• Monday Oct. 17th – Employers should remember that your September 2011 payroll tax deposit is due if you’re not on a semiweekly deposit schedule.
• Monday Oct. 31st – Employers should file Form 941 (payroll tax) for the 3rd quarter of 2011 and deposit unpaid taxes as well as deposit unemployment tax (for the 3rd quarter) if you own more than $500 FUTA for the year.

November:

• During November, ask your employees whose with-holding allowances will change in 2012 to fill out a new Form W-4.
• Also, ask each eligible employee who wants to receive advance payments of the earned income credit during 20ll to fill out a Form W-5.
• Tuesday, Nov. 15th – October 2011 payroll tax deposit is due if you’re not on a semiweekly deposit schedule.

December:

• Thursday, Dec. 15th – Corporations should pay the 4th installment of your 2011 estimated income tax.
• Remember that November 2011 payroll tax deposit is due if you’re not on a semiweekly deposit schedule.
• During December or prior to your last payroll process, calcualte employees personal use of auto inclusion amount. Also for S-Corps, calculate amount of health insurance paid for greater than 2% owners

That’s it, 2011 is almost over and all of your small business taxes should be taken care of!

If you have any questions about tax planning, small business tax planning or think I can help you in any other ways, contact me, or give me a call at (239) 384-9688. You may also download one of my FREE eBooks.

- Mark

This information is based on facts, assumptions and representations as stated and authorities that are subject to change. We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.

LEGAL NOTICE AND DISCLAIMER: The information within this blog is for informational and educational purposes only and is not tax advice and should not be used as such. The facts of each individual situation can have significantly different outcomes when applying tax law. The hiring of a CPA is an important decision not to be based solely on advertisements.

Staying ahead of the curve helps as well. So here are your 3rd quarter tax strategies to know.

July:

Friday, Jul. 15th – June 2011 payroll tax deposit is due as long as you’re not on a semiweekly deposit schedule.

August:

• Monday, Aug. 1st – Employers should file Form 941 (payroll tax) for the 2nd quarter of 2011 and deposit any unpaid taxes.
• Unemployment taxes should be deposited if you owe more than $500 in FUTA for the year.
• If you maintain an employee pension, profit-sharing or stock bonus plan, file Form 5500 or 5500-EZ for calendar-year 2010. Using a fiscal year as your plan year means that you should file this form by the last day of the 7th month after the plan year ends.
• Monday, Aug. 15th – Employers should remember that the July 2011 payroll tax deposit is due if you’re not on a semiweekly deposit schedule.

September:

• Thursday, Sept. 15th – Corporations should (if you received a 6-month extension from March 15th) send in your 2010 calendar-year income tax return (Form 1120 or 1120-A) and pay any taxes due as well as pay the 3rd installment of your 2011 estimated tax income tax.
• S Corporations – Should also file your 2010 calendar-year income tax return (Form 1120 or 1120-S).
• Partnerships and LLC’s treated as partnerships should File your 2010 calendar-year return if you received a 5-month extension from April 18 and provide each partner with a copy of Schedule K-l (Form 1065).
• Employers August 2011 payroll tax deposit is due if you’re not on a semiweekly deposit schedule.

That’s it for the 3rd quarter of 2011, come back for quarter 4 tips on October 1st, 2011.

If you have any questions about tax planning, small business tax planning or think I can help you in any other ways, contact me, or give me a call at (239) 384-9688. You may also download one of my helpful FREE eBooks.

- Mark

This information is based on facts, assumptions and representations as stated and authorities that are subject to change. We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.

LEGAL NOTICE AND DISCLAIMER: The information within this blog is for informational and educational purposes only and is not tax advice and should not be used as such. The facts of each individual situation can have significantly different outcomes when applying tax law. The hiring of a CPA is an important decision not to be based solely on advertisements.

…when it comes to value received for dollars paid.

However, there are consultants out there who are able to pay for themselves over and over for the small business owner.

So if you’d like to make a good choice when it comes to your small business accounting, a consultant should be the way to go.

Change is never easy, but there is no chance of creating a better work place and running a company as lean as possible if you can’t see the problem(s).

The problems are right in front of you, but because you are seeing them everyday as normal activity, not as problems, you might not be recognizing them.

Hiring the right consultant can be your eyes and ears when it comes to change(s) needed in your company.

Consultants can be the person who identifies things that need change(s) and you the business owner can reap the benefits.

Not all consultants are created equal, so interview a few and ask for references to evaluate prior results and if their experiences match your needs.

Make sure that you find the right consultant for your business.

If you have any questions, comments, or concerns about Small Business Accounting, or think I can help you in any other ways, contact me, or give me a call at (239) 384-9688.

- Mark

This information is based on facts, assumptions and representations as stated and authorities that are subject to change. We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.

LEGAL NOTICE AND DISCLAIMER: The information within this blog is for informational and educational purposes only and is not tax advice and should not be used as such. The facts of each individual situation can have significantly different outcomes when applying tax law. The hiring of a CPA is an important decision not to be based solely on advertisements.

…it’s time to consider your 2nd quarter tax strategies! Let’s take a look…

April:

• Monday, Apr. 18th – Partnerships and LLCs that are treated as partnerships should file their 2010 calendar-year return (Form 1065).
• Provide partners with a copy of Schedule K-1.
• Corporations should be paying the 1st installment of their 2011 estimated income tax. Form 1120-W can help you estimate your tax for the year.
• Employers remember that the March 2011 payroll tax deposit is due if you’re not on a semiweekly deposit schedule.

May:

• Monday, May 2nd – Employers need to file Form 941 (payroll tax) for the 1st quarter of 2011 and deposit any unpaid taxes.
• Unemployment taxes for the 1st quarter of 2011 should also be deposited if you own more that $500 in federal unemployment taxes for the year.
• Monday, May 16th – Employers should realize that the April 2011 payroll tax deposit is due if you’re not on a semiweekly deposit schedule.

June:

• Wednesday, Jun. 15th – Corporations should pay the 2nd installment of their 2011 income tax.
• Employers should make your May 2011 payroll tax deposit as long as you’re not on a semiweekly deposit schedule.

That’s it for your 2nd quarter 2011 tax strategies! Come back on July 1st, 2011 for the 3rd quarter strategies.

If you have any questions about tax planning, small business tax planning or think I can help you in any other ways, contact me, or give me a call at (239) 384-9688. You may also download one of my helpful FREE eBooks.

- Mark

This information is based on facts, assumptions and representations as stated and authorities that are subject to change. We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.

LEGAL NOTICE AND DISCLAIMER: The information within this blog is for informational and educational purposes only and is not tax advice and should not be used as such. The facts of each individual situation can have significantly different outcomes when applying tax law. The hiring of a CPA is an important decision not to be based solely on advertisements.

If you don’t, you probably should get on top of it! So here are your 1st quarter tax strategies.

January:

• Employers should prepare copies of W-2’s and give them to employees by February 1st. If digital W-2’s are given, you should post and notify recipients by Feb. 1st.
• Monday, Jan. 3rd – If employers have not received a new Form W-5 for 2011 then advanced payments of earned income credit should be stopped.
• Tuesday, Jan. 18th – December 2010 monthly payroll tax deposits are due if you’re not on a semiweekly deposit schedule.
• Monday, Jan. 31st – Businesses should give Form 1099 information statements to the recipients of certain payments you made for services during 2010 as well as statements to customers who paid you more than $10,000 in any , single cash transaction during 2010.
• Employers should file Form 941 for the 4th quarter of 2010 and deposit any unpaid taxes.

February:

• Tuesday, Feb. 15th – January payroll tax deposit is due if you’re not on a semiweekly deposit schedule. You should begin withholding 2011 income tax from the pay of any employees who claimed exemptions in 2010 but did not give you a new Form W-4 to continue the exemptions this year.
• Monday, Feb. 18th – Employers should send Form W-3, Transmittal of Wage and Tax Statements, to the IRS along with Copy A of all employee W-2s you issued in 20ll for calendar-year 2010.
• Businesses should send Forms 1099 and 1096 to the IRS, a separate 1096 is required for each 1099 type.

March:

• Tuesday, Mar. 15th – C corporations should file a 2010 calendar-year income tax return (Form ll20 or 1120-A) and pay any tax that is due. If you want an automatic six-month extension, file Form 7004, and deposit what you estimate you owe.
• S corporations – File your 2010 calendar-year income tax return (Form 1120-S) and pay any tax that is due. Provide each shareholder with a copy of Schedule K-1 (Form 1120-S), Shareholder’s Share of Income, Deductions, Credits, etc., or a substitute Schedule K-1. For an automatic six-month extension, file Form 7004.
• File Form 2553 (Election by a Small Business Corporation), by this date to be treated as an S corp beginning with calendar-year 20ll. If you miss this deadline, the switch generally won’t take effect until calendar-year 2012.
• Employers should deposit the February 2011 payroll tax if you’re not on a semiweekly deposit schedule.
• Thursday, Mar. 31st – Employers should, if forms are filed electronically, send Forms 1098, 1099 or W-2G to the IRS. Otherwise, see Feb. 28 rules. The due date for giving recipients those forms is still Jan. 31, regardless of whether you file electronically.

That’s it for the 1st quarter of 2011.

Now you’ve got your small business tax strategies to carry you into the new year! Come back on April 1st, 2011 for the second quarter strategies.

If you have any questions about tax planning, small business tax planning or think I can help you in any other ways, contact me, or give me a call at (239) 384-9688. You may also download one of my helpful FREE eBooks.

-Mark

This information is based on facts, assumptions and representations as stated and authorities that are subject to change. We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.

LEGAL NOTICE AND DISCLAIMER: The information within this blog is for informational and educational purposes only and is not tax advice and should not be used as such. The facts of each individual situation can have significantly different outcomes when applying tax law. The hiring of a CPA is an important decision not to be based solely on advertisements.

Payroll Tax Forgiveness for Hiring Unemployed Workers:

The HIRE Act provides relief form the employer share of OASDI (a.k.a. social security or FICA tax) taxes on wages paid by a qualified employer with respect to certain covered employment.  Covered employment is limited to service performed by a qualified individual in a trade or business of a qualified employer, or in the furtherance of the activities related to the purpose or function constituting the basis of the employer’s exemption under Code Sec. 501.  This provision applies to wages paid beginning on the day after enactment and ending on December 31, 2010.

A qualified individual is any individual who:

1.  begins work for a qualified employer after February 3, 2010 and before  January 1, 2011.  Employers will need to review new hires back to February 3, 2010 for eligible employees and obtain signed affidavit.  However, eligible wages are after March 18, 2010 not February 3, 2010.

2.    certifies by signed affidavit (under penalties of perjury) that he or she was employed for a total of 40 hours or less during the 60-day period ending on the date such employment begins.  Affidavit can be found at the IRS.gov, Form W-11.  http://www.irs.gov/pub/irs-pdf/fw11.pdf.

2.    is not employed to replace another employee of the employer unless such employee separated from employment voluntarily or for cause; and

4.    is not a related party.

Employees who qualify for the OASDI forgiveness in the first quarter of 2010 will receive the benefit through a credit toward general second quarter 2010 OASDI liability; they can’t stop paying the 6.2 percent OASDI tax immediately on wages paid to new hires.  After the first quarter, however, the employer does not match the 6.2 percent tax as wages are paid, employer can reduce weekly or semi-weekly deposits.  1.45 percent Medicare tax is not part of the HIRE Act, employers need to continue depositing Medicare tax are required.

A qualified employer may not receive the work opportunity tax credit or FICA tip credit on wages paid to an individual during the one-year period beginning on the hire date for the same wages used to qualify for the forgiveness of payroll tax.  However, an employer may elect out of the payroll tax forgiveness, therefore for each employee hired, all possibly credits will need to be calculated for best possible benefit.

Business Credit for Retention of Certain Newly Hired Individuals:

Under the HIRE Act, an employer’s general business credit is increased by the lesser of $1,000 or 6.2 percent of salary for each retained worker that satisfies a minimum employment period.  Generally, a retained worker is an individual who is a qualified individual as defined for purposes of the provision for payroll tax forgiveness.  However, the credit is available only with respect to such individual, if the individual:

1.    is employed by the employer on any date during the tax year;

2.    continues to be employed by the employer for a period of not less than 52 weeks; and

3.    receives wages for such employment during the last 26 weeks of such period that are at least 80 percent of such wages during the first 26 weeks of such period.

Therefore, an employer will qualify for the full $1,000 credit for each new hire with a salary over the 52 week period of at least $16,129.  An employer that hires some part-time new employees, in addition to full-time employees, is entitled to the full $1,000 credit, if, of course, the part-time or full-time employee decides to stay for 52 weeks.

Because payroll taxes are deductible as an ordinary and necessary business expense, employers may have a correspondingly smaller business expense deduction on their 2010 tax returns.  By combining the benefit of the business credit for new hires with the forgiveness incentive, employers in the highest brackets will realize a net tax benefit of just over 4 percent of wages paid to qualified new employees, up to the $106,800 social security maximum wage base.  Therefore, for the maximum $6,621.60 tax forgiveness for the new hire, a net benefit of approximately $4,504 would be realized.

If you have any questions regarding the hiring incentives under the HIRE Act, please feel free to contact me at (239) 384-9688 or by visiting the Contact page on my web site.

Thank you,
Mark

PS – Complete information, questions and answers are available here on the IRS web site.

————

This information is based on facts, assumptions and representations as stated and authorities that are subject to change. We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.

LEGAL NOTICE AND DISCLAIMER: The information within this blog is for informational and educational purposes only and is not tax advice and should not be used as such. The facts of each individual situation can have significantly different outcomes when applying tax law. The hiring of a CPA is an important decision not to be based solely on advertisements.

Should I purchase a tax deduction?

From a cash flow standpoint the answer is NO.

Individuals and business owners need to look at taxes as any other expense.

If it’s not needed then don’t buy it for the tax deduction.

For every $100 spent on non-essential items, approximately $25 is returned in tax savings.

Would you not be better off, cash flow wise, to pay the $25 and keep the $75?

If you have any questions, comments or concerns about tax deductions, or think I can help you in any other way, contact me, or give me a call at (239) 384-9688.

- Mark

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This information is based on facts, assumptions and representations as stated and authorities that are subject to change.  We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.

LEGAL NOTICE AND DISCLAIMER:  The information within this post is for informational and educational purposes only and is not tax advice and should not be used as such.  The facts of each individual situation can have significantly different outcomes when applying tax law.  The hiring of a CPA is an important decision not to be based solely on advertisements.

Everything I discuss is also available in eBook form on my Web Site at: www.Makara-Assoc.com.

…you need to know:

1. Cash Flow Management, Financing Options & Banking Relationships
2. Tax Planning IS A Year Round Activity
3. Human Resources and Payroll Issues
4. Small Business Accounting and Information Technology (IT)
5. Advertising vs. Web Marketing
6. Entertainment and Meals Deductions
7. Travel and Uniform Reimbursement Policies

If you have any questions about the information I’ve gone over, please feel free to contact me, or give me a call at (239) 384-9688.

- Mark

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This information is based on facts, assumptions and representations as stated and authorities that are subject to change. We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.

LEGAL NOTICE AND DISCLAIMER: The information within this blog is for informational and educational purposes only and is not tax advice and should not be used as such. The facts of each individual situation can have significantly different outcomes when applying tax law. The hiring of a CPA is an important decision not to be based solely on advertisements.