Category Archives: Software

QuickBooks Software, Software

Construction Payments Slowest of All Industries, Surveys Show

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I recently attended the annual QBConnect conference and met some colleagues who specialize in the construction industry. We chatted about the pros and cons, rewards and challenges, and of course the specialized software and accounting practices.

So it was with particular interest that I read the results of this new survey of construction professionals — the majority of which are small businesses. It turns out that the construction industry lags behind all others in collection of accounts receivable, especially where subcontractors are concerned.

You might expect there to be repercussions for withholding or delaying payments—but you’d be wrong. The majority (78%) of people rarely or never charge interest on late payments. Desperate to get paid at all, over half (55%) of the contractors say they have gone as far as to negotiate payment terms or even provide a discount.

Collecting on retainage is a major pain point. Contractors say that it can be difficult and time-consuming to track down, which compounds cash flow strains and makes renting equipment and paying suppliers for the job itself extremely difficult.

Unfortunately, funds due to subcontractors are frequently used by general contractors to cover overhead on other projects, which leads to a large percentage of parties having to file liens in order to get paid.

The survey concludes with suggestions for improving the payment cycle in the industry, including: visibility documents; multi-tiered communication; trust- and relationship-building; down-payments/ installment payments; requiring the project owner to pay for materials and supplies; and making information accessible to all parties.

Source: 2019 National Construction Payments Report

Education, Illinois, IRS, POS - Point of Sale, QuickBooks Software, Site News, Software, Tips

Come See Me Speak at “Drink & Think”: Wednesday June 26th

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I’ll be giving a presentation this Wednesday, June 26th at 5:30 pm at Ampersand Cowork in Logan Square (Chicago) for their series Drink & Think: Entrepreneurship @ Ampersand! The topic is, “Thinking About Starting a Small Business – Side Business – Freelance Gig? Here’s What You Need To Know First.”

Come out and enjoy some drinks & snacks on their gorgeous rooftop deck and learn what you need to know before starting a small business. Tickets are only $5 — get them here:
https://www.eventbrite.com/e/drink-think-entrepreneurship-tickets-63579032598

You’ll learn:
– Why NOT to run a small business… and why bother if it’s that hard?

– When to start it (and what that even means)

– What will you need? Bank accounts, EINs, Business Plans and more

– Technology tips – bookkeeping, payroll, data entry, paperwork

– What’s deductible?

– Choice of entity

– Employees or independent contractors?

– And plenty more fascinating and essential tips.

See you there!

 

IRS, Software, Tips

Qualified Leasehold Improvement Depreciation Changes for 2018

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The new tax law has changed a few important things about what was formerly known as Qualified Leasehold Improvement (QLI) property — now called Qualified Improvement Property (QIP). Accounting Today did a nice job, as usual, outlining the changes in one of their articles. Forbes did a similarly solid job more recently discussing the technical glitches that still remain in this area.

Under the old law:

  1. Qualifying assets were defined as nonstructural improvements to the interior of a building.
  2. Certain improvements did not qualify, including any improvements to a property in which the landlord and tenant were related parties.
  3. Improvements made to a property within three years of the property’s completion were not eligible for QLI.
  4. Qualified real property was eligible for 15-year depreciation with additionally qualifying assets subject to bonus depreciation.

However, under the new law:

  1. QIP still requires that assets be in the interior of a building and be nonstructural in nature.
  2. But QIP does not require a lease between unrelated entities.
  3. And QIP eliminates the three-year requirement, simply stating that qualifying improvements must be done “after the building is originally placed in service”.
  4. QIP was supposed to be provided a 15-year life, similar to previous rules for QLI. This 15-year life would have made these assets eligible for bonus depreciation. Unfortunately, due to errors made in the rush to draft the new tax law, QIP is considered 39-year property, eligible for 179 treatment but not bonus depreciation.

I’m noticing that my tax software is offering me choices between 15-year and 39-year life, and wanted to give a heads-up to those out there in my situation that the technical correction that was supposedly on the way has not yet materialized, so it’s important to select 39-year in these cases.

Source: Common depreciation missteps and misconceptions: Qualified leasehold improvements | Accounting Today

QuickBooks Software, Software, Tips

List of State Payroll Tax Returns Filed by Gusto

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Just a quick post — courtesy of a conversation I had with Gusto support yesterday. For those of you using Gusto for your payroll needs (and I highly recommend them — far superior to any payroll company I’ve ever used, and their integration with QuickBooks Online is seamless and available at no extra charge), it turns out there’s a comprehensive list of the state tax returns they file on behalf of their payroll clients.

I (and my clients) have often received payroll documents from various state and local tax agencies and wondered, “is this something I’m supposed to be filling out or does Gusto handle it for me?” In the past I’ve emailed their support team to ask, but at some point apparently they came up with a list, so I don’t have to take that extra step anymore. I figured I’d post it here so that other Gusto users can now do the same thing when that confusing notice arrives at your place of business.

And if you’re not already using Gusto and are interested, use my referral link to get the first month of your subscription free.

Source: State taxes filed by Gusto

Education, Software, Tips

Small Business Credit & Financing Webinars

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The question of funding for small businesses comes up quite often, and I found myself yet again recommending Nav.com to a client recently. It’s been a while since I mentioned the two helpful webinars offered by them on CPAacademy.org — both archived so you can access them anytime:

Help Your Clients Build Strong Credit And Get Lender-Ready

  • Learn how strong business credit scores can help businesses grow.
  • Understand the process for building business credit.
  • Identify and avoid common ways business activity puts business owner’s personal credit at risk.
  • Help your small business clients become “lender-ready.”

Where’s The Money? Financing Sources For Your Small Business Clients

  • Understand the pros and cons as well as lender requirements for the main types of financing.
  • Learn about financing options for start-ups, business owners with poor personal credit, and other challenging situations.
  • Help your clients prepare for financing and avoid expensive pitfalls.
  • Get free tools you can use to help your clients evaluate costs and make better borrowing decisions.​

I have no particular allegiance to Nav over any of the other companies, such as FundBox, except that I’ve been very impressed with their mission and their commitment to client education, especially from Gerri Detweiler, the Head of Market Education. A quote from their website:

We launched Nav in 2012 to solve a major challenge faced by small business owners: finding affordable financing. There are more ways than ever to get business funding—over 44 options at last count—but it is still a complex and miserable experience. Business owners need a partner, not just a loan. As small business owners themselves, our founders, Levi King and Caton Hanson, experienced this challenge first hand. They believed small business owners deserved an easier, transparent way to manage their financial health and find the right financing.

The two webinars above do a great job of outlining how you can help your accounting, bookkeeping and finance clients become more credit-worthy and prepare for future borrowing. And Nav itself does a great job of helping them find the least expensive loan for their risk-level.

Some tips they mention in the webinars, for businesses wanting to establish credit: maintain under 30% credit utilization; have 5 or fewer credit inquiries in the past 6 months; and have at least $5k in personal credit limits.

I want to specifically mention the app “Nav Business Loan Reality Check App” — a great tool for small businesses to see the lender’s view of their creditworthiness. Another is the “Match Factor” tool, which I remember as impressive, along with these helpful links:

– Business Financing Options
https://www.nav.com/business-financing-options/

– Link to the Interest Rate Traps calculations feature from my website to help clients calculate the APR of business financing.
https://www.nav.com/business-loan-calculators/

For accountants, you can set up your own account, check your credit score, and even see if your business has its own credit score. You can also join their accountant advisor program and get free business credit reports to send to clients who are considering looking at borrowing options. I recommend signing up to receive their “Accounting Professional’s Guide to Business Credit” if the webinars leave you hungry for more.

And as always, none of this is sponsored material. I’m just a fan of the company because they’ve been helpful to my clients, and their webinars have been helpful in making me a better consultant.

IRS, QuickBooks Software, Software, Tips

Short-Term Rental Clients Need To Navigate Tax Concerns

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Rob Stephens of The Progressive Accountant recently shared his top four recommendations when advising clients to make sure they avoid costly mistakes when working with short-term vacation rentals:

1. Listing quality and rental rates.
2. Hotel occupancy taxes.
3. Get organized and find the right tools.
4. Administrative risk around taxes and regulations.

And I’d like to add that there’s an additional concern folded into the above, which is whether this is truly a Schedule C hotel operation business or a Schedule E rental property — a entire topic on its own.

He points out that:

More and more people are renting their homes, which triggers new and unique tax requirements. Being on the alert for these pitfalls can protect your client (or you) from hidden tax liability and operational problems.

He is recommending Avalara’s MyLodgeTax as a hotel occupancy tax solution. (Though, full disclosure, he sold his compliance software to them and it is currently being rebranded. Still, as Avalara is a trusted name in sales taxes, I feel confident sharing the recommendation.)

Source: Helping Your Short-Term Rental Market Clients Navigate Tax Concerns and Avoid Costly Mistakes | Sales Tax & Compliance

QuickBooks Software, Software, Tips

Report Comparison Chart for Different Types of QBO Subscriptions

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QuickBooks Certified ProAdvisorA colleague recently shared this wonderful link that compares each type of QuickBooks Online subscription and which reports are available in each one:

Report comparison between QuickBooks Online subscriptions (US) – QuickBooks Learn & Support

Her note was, “Here’s a handy chart comparing all of the reports available in the different versions of QBO. I know I can use this reference all the time!”

I had no idea it existed and I was glad to see it… so I thought I’d pass along this convenient summary. Use it in good health. :)

IRS, Software, Tips

New Rules for Submission of 1099-MISC Forms

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Good article recently from one of my favorite publications, CPA Practice Advisor. They note two big changes for filing of 1099-MISC forms.

New IRS rules for submitting late 1099-MISC with Box 7

After January 31, 2019, 1099-MISC with Box 7 filled in should be filed separately from 1099-MISC with any other box filled in. As an example, on February 5, if you have a 1099-MISC with Box 7 and a 1099-MISC with only Box 1 filled in and your e-file provider has put them in the same record, as per last year’s format, the MISC with Box 7 will be flagged as late, which indeed it is. The challenge is, however, that the 1099-MISC with Box 1 may also be flagged as late, even though it is not, since it is not due until Mar. 31.

If companies do accidentally submit non-Box 7 1099-MISC along with late Box 7 forms and get a Notice 972CG (A Penalty is Proposed for Your Information Returns), according to the IRS they may respond and clarify the content of the submission, indicating the number of Forms 1099-MISC that did not report Box 7.

More on this from the IRS here:
https://www.irs.gov/forms-pubs/changes-to-current-forms-publications/filing-forms-1099-misc-with-nec-in-box-7-with-the-irs-dec-2017

New 1099-K State Filing requirements with Gross Amount more than $600

The IRS does not currently require companies to submit 1099-Ks unless the Box 1a Gross Amount for the year is at least $20,000. However, individual states have become attuned to the income reporting possibilities with this form and are mandating submission of the 1099-K for gross payments more than $600. This $600 is the same threshold for 1099-MISC Box 7 reporting.

At the moment, Massachusetts and Vermont have implemented the reporting requirement for 1099-K with more than $600. Be sure to stay up to date with your particular state’s rules as they may pick up this requirement in the future.

Source: New Rules for Submission of 1099 Forms | CPA Practice Advisor

QuickBooks Software, Software, Tips

How To Permanently Delete A Client In QBOA

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Great news from a thread with some of my favorite ProAdvisor colleagues today. So few of us knew this option had been added that I want to make sure I share the info here.

The question was posed:

“If someone had added you to their QBOA (QuickBooks Online Accountant) company as a team member, and you no longer work with them, can you remove yourself somehow? Or do you need to request that they take you off their team?”

The answer used to be that you either had to ask the client to take you off their team, or you could make the client “inactive”. But there was no option to delete the client from your list in QBOA.

Now there is! With a few caveats and tips.

  1. Click on the name of the client in your client list; then click the drop-down button next to “edit client”. You should see a “delete permanently” option.
  2. If you are the master admin or billing contact for the file, it won’t let you delete them.
  3. You have to do the delete in a browser incognito mode for it work. It doesn’t work in Mac desktop app.
  4. The email confirmation notification is very generic and doesn’t tell which client’s file you removed yourself from. It just says “my Firm has removed access their accountant access to your QuickBooks Online account”.

https://community.intuit.com/articles/1456507-make-a-client-active-or-inactive-or-delete-them-permanently-in-qboa

Note: Many reps in QBO Support do not even know this function exists, and they keep telling us to just make them inactive.

Thanks to Ufuoma Ogaga and the entire Business Workflow & Management community for this!

Source: Make a client active or inactive or delete them permanently in QBOA – QuickBooks Learn & Support

IRS, Software

2018 Tax Software Survey Results

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The Tax Adviser (an AICPA publication) does a great job every year collecting information on which tax preparation packages are being used by professionals and what they like and dislike about each. This year was no exception — the article is chock-full of useful metrics and covers 13 products. It also lists favorite software by firm size, which I think is a great perspective, and “best for a new practice” ratings.

Check it out — definitely worth a read.

Source: 2018 tax software survey