…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.

…also make your tax planning easier, as you can get an income tax deduction.

If you’re a sole proprietor or a husband and wife partnership (in other words, not a corporation) you can create an income tax deduction and you will not have to match (employer’s share) the Social Security or Medicare tax normally due for an employee.

You will be required to withhold the Social Security and Medicare tax from your Child’s pay.

Don’t think you just found a wind-fall, the work performed and wage paid needs to match your Child’s ability and be consistent with a comparable employee.

I.e. your 14 or 15 year old would not be allowed on a construction site.

You also MUST review all applicable state child labor laws.

Planned correctly this can add up to a nice tax savings for you and begin to teach your children cash management skills.

If you have any questions, comments, or concerns about Tax Planning, 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.

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.

…but it’s how much of your those IRA(s) do you convert to a Roth IRA.

The deciding factor in this calculation – is how much cash, outside of the traditional IRA, is available to pay the tax that will become due in April 2011 or April 2012 and 2013.

With that in mind, below, and over my next series of blogs, are thoughts to consider beyond the headlines in the financial news publications that will save tax dollars and make your Roth conversion a win today and into the future.

Import Dates to keep in mind

January 1, 2010: First day to convert a Traditional IRA to a Roth IRA with no MAGI ($100,000 prior to January 1, 2010) limitation.

December 31, 2010:  Last day to take advantage of delaying taxes on Roth conversation in 2010 until 2011 and 2012.

April 15, 2011: Due date for 2010 tax return without an extension.

October 15, 2011:  Due date for 2010 tax return with an extension.  Last day to re-characterize a 2010 Roth conversion.

Do you have any questions, comments or concerns about Roth IRA’s?   If so, please contact me, or call me at (239) 384-9688, and I’ll be happy to answer them.

- 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 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.

This is the final part in my 7 part series “7 Things Every Small Business Owner Needs To Know”.  You can download this entire series in my eBook on my web site – www.Makara-Assoc.com.

These reimbursements are allowed but are treated differently to the employee whether an accountable or non-accountable plan is in place.

If the employer has an accountable plan the expense is deducted 100% by the employer.

If the employer has a non-accountable plan, the reimbursement is treated a taxable wages to the employee and reported in box 1 of the employees W-2.

The employee then must take any allowable deduction on his or her personal 1040; these expenses would be subject to the 2%-of-AGI limitation on their schedule A.

All business owners should review their plans to insure compliance with an accountable plan to save on the tax burden to the employee and employer when a company is deemed to be using a non-accountable plan.

I’ve worked with business owners across the United States in resolving these questions and improving the accounting function of their businesses.

If you have any questions about travel and uniform reimbursement policies – please give me a call at (239) 384-9688 or visit my web site at: www.Makara-Assoc.com.

- 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 eBook 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.

This is part 5 in my 7 part series “7 Things Every Small Business Owner Needs To Know”.  You can download this entire series in my eBook on my web site – www.Makara-Assoc.com.

With all the choices and dollars needed to make it effective, an understanding of your target market and correct allocation of dollars is a must to successfully market your business and gain that steady stream of leads and sales.

One of the biggest trends I’ve seen over the last 18 months is people pulling from traditional media (such as newspaper, YellowPages, radio and TV) and putting more effort into the Internet.

In doing so, the business owners I’ve worked with have been spending much less (for example, going from a $4,000/month Yellow Page ad, to a $500/month Web Marketing campaign with a Web Marketing company), and getting better results (more people contacting them).

The best part about Web & Internet Marketing is that EVERYTHING is measurable.

My good friend, and Web Marketing guru, Charly Caldwell II, with Internet Services Group of Florida, LLC, recommends the following tools to measure your results from your Internet & Web Marketing efforts:

• Google Analytics – completely free, and helps you understand exactly what marketing you’re doing that is working, and what isn’t — along with how many people are visiting your web site, how they’re behaving on your web site, etc.
• RingCentral.com – keep in mind, 35% of people prefer to call you from your web site, than they do to fill out an online form.   With RingCentral.com, for $10/month, you can get an 800 number that’s ONLY associated with your web site, so you can measure exactly how many people call you from your web site.

If you’d like to learn more about the tools, Web Marketing – along with testing & measuring everything — more details are available in Charly’s eBook called “7 Crucial Tips for Creating an Amazing Web Site” which is available on his web site at: www.ISGFL.com.

Nonetheless, whatever methods of marketing you commit to, it’s really important that you measure the conversions (people actually purchasing from you) from your marketing efforts — this is best done in your accounting software.

The last thing I’d want to see is you getting overwhelmed with a lot of people taking up your valuable time, but not converting into sales.

If you have any questions, please give me a call at (239) 384-9688 or visit my web site at: www.Makara-Assoc.com.

- 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 eBook 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.

This is part 4 in my 7 part series “7 Things Every Small Business Owner Needs To Know”.  You can download this entire series in my eBook on my web site – www.Makara-Assoc.com.

Selecting the wrong software for your company could save money in the short-term but cost more in total resources in the long run.

Additional costs incurred will include:

• wasted time by employees preparing manual calculations or forms,
• added total employee count to keep the accounting system functioning or
• having to purchase additional non-integrated software to perform accounting tasks.

Questions to consider when making an accounting package purchase:

• number of transactions (invoices and checks) per month
• will job costing reports need to be produced
• will sales estimates need to be produced
• will your company have retail sales / collect cash and process credit cards
• number of users that will need access
• will inventory need to be tracked
• how will payroll be processed
• will the information need to be available online

No matter what software is selected – backing up data files is a must!

Having a back-up system is not enough; you must check the back-up at least once a month.  Restore a file to insure the backed-up data is in working order.

If your company is new make sure a back-up system is in your budget, if your business has been operating for any length of time and you don’t have a back-up system, set up an appointment with an IT professional today.

If you have a back-up system in place and have not checked the data files in the last 30 days ask your IT manager to review this procedure and have the file(s) checked. The cost to rebuild data files runs into the thousands of dollars in lost time needed by your employees.

If you have any questions, please give me a call at (239) 384-9688 or visit my web site at: www.Makara-Assoc.com.

- 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 eBook 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.

This is part 3 in my 7 part series “7 Things Every Small Business Owner Needs To Know”.  You can download this entire series in my eBook on my web site – www.Makara-Assoc.com.

For example:

Poor documentation penalties can cost $1,000 per employee, and $10,000 for knowingly hiring an illegal immigrant.

Penalties for failure to file employment forms and/or deposit payroll taxes withheld range from 2 – 15% of the tax, plus interest.

Make sure your company is using the most up to date forms (i.e. W-4’s and I-9’s), keep employee files clean and updated for any and all changes.

A few tips when it comes to employee files:

1. Don’t make notes on applications and resumes, circling the date of college graduation could be evidence of age bias in the future.
2. Don’t keep I-9’s in employee files, keep these and supporting documentation in a separate file again to protect against discrimination claims.
3. Don’t use social security numbers as employee ID’s.

Create a hiring checklist, as missed or uncompleted documents can cost you.

If mistakes are made, payroll processing can be a time consuming and expensive.

Some of the more costly mistakes made in payroll are:

• not paying overtime to nonexempt employees and
• not timely depositing withheld taxes (Trust Fund money).

The rules for payroll are complex, if you or someone on your staff is not fully aware of these rules, hire a payroll service.  It will only take one or two mistakes to pay for the service, not counting the time it will take to correct the error.

If you have any questions, please give me a call at (239) 384-9688 or visit my web site at: www.Makara-Assoc.com.

- 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 eBook 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.