Category Archives: Tips

Education, Illinois, Tips

2015’s Most & Least Fair State Tax Systems

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WalletHub just released what I find to be a fascinating and well-analyzed study of state tax systems in the United States, evaluating each on many criteria that, combined, represent what a “fair” tax system might look like.  (Local folks, FYI: Illinois scored near the bottom.)

With loads of great charts and graphs, this report is worth a read, if only to examine whether you agree or not with their evaluation of what makes a tax system “fair”.  Interesting philosophical discussion that should be fascinating to many, not just us tax accountants.

Read the report here: 2015’s Most & Least Fair State Tax Systems | WalletHub®

IRS, Software, Tips

IRS — Making Quarterly Tax Payments Easier

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My clients and colleagues are always amazed by my attitude about the IRS — fact is, I really think they do an incredible job, given the nature of their work and the constant budget constraints dealt them by Congress.

I’m sharing a couple examples today that relate to upcoming quarterly estimated tax payments.

The IRS manages to stay fairly up-to-date with technology, compared to most federal and state government agencies, at least.  It used to be such a pain to sign up for EFTPS and make payments, but now they offer “Direct Pay,” where you can both make and look up payments.

They also offer a mobile app, known as the “IRS2Go Mobile App,” which you can use to look up refund status, as well as to access the Direct Pay feature I just mentioned.

Considering the challenges the IRS is always up against, I think they do a great job, on the whole; and I, for one, am pretty jazzed about these new technological features.  Way to go, IRS!

Education, IRS, Tips

Business Taxes for the Self-Employed – Aug 26

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The IRS is offering a webinar on business taxes for self-employed folks — that means those of you who file Schedule C as part of your personal tax return.  You may be an independent contractor, a sole proprietor, or a single-member LLC — Schedule C applies to all of those situations.

The webinar is offered on August 26, 2015, at these times:
2 p.m. Eastern Time
1 p.m. Central Time
12 p.m. Mountain Time
11 a.m. Pacific Time

The IRS presenters will cover the following topics:

-Reporting profit or loss from a business or profession
-Self-employment tax and estimated tax payments
-Schedule C and C-EZ
-Deducting business expenses
-Husband and wife businesses
-Recordkeeping

For more information and to sign up, click here: Internal Revenue Service Webinar Registration Page

Please spread the word to your self-employed friends and colleagues!

Education, IRS, Tips

IRS Webinar on Affordable Care Act Provisions for Employers

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Small business employers — I can’t encourage you strongly enough to attend one of the upcoming IRS webinars on provisions in the Affordable Care Act (ACA) that apply to YOU.  It’s not enough to presume your accountant or HR consultant will reach out and hold your hand through this process… you need to take charge and get educated about what expectations your employees and the IRS will have of you, and how to meet those requirements.  It only takes an-hour-and-a-half, and you’ll be a better employer and business owner for it.  Aug 20, 1–2:30 pm and Sep 16, 1:30–3 pm.

Source: Webinar Series offered on Affordable Care Act Provisions for Employers and Coverage Providers

QuickBooks Software, Software, Tips

QuickBooks Online Updates

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Not sure how many of you QuickBooks Online users out there follow the QBO Blog, but I recommend it.  It’s not very sales-y, the posts are generally short and to-the-point, and the information is often pretty solid.  Case in point, the most recent QBO Update review of changes, here: QuickBooks update: June 26 2015 • QuickBooks Online

One thing to be aware of on their blog is that they often like to tout “pretty” updates, like changes to formatting and styles that they feel make things easier to read or navigate.  (I generally find these types of changes to be annoying wastes of time, especially when there are serious bugs that need desperately to be addressed.  Furthermore, in their effort to look more sleekly Apple i-design-y, they often increase the number of clicks it takes to accomplish a given task — a no-no in my book.  Case in point, the new version of bank registers.  Avoid it for now, is my suggestion.

However, something truly useful they recently included is the long-awaited ability to copy journal entries!  As they put it, especially convenient when you need to duplicate long journal entries.  Of course, saving a JE as a “Recurring” transaction (“Memorized” in the Desktop version) is still your best bet, but sometimes that’s not an option or not the most efficient option.  Here’s all you do:

Create (+) > Journal Entry > Recent Transactions > choose an entry > More > Copy.

Try it out.  You’ll love it.

Also, this update allows you to import invoice styles from Word, which I don’t think is a big deal, but clients LOVE.  So, go make a client happy and tell them they can now do this.  Another feature folks have been waiting for a long time that will win some smiles.

Main point is: follow the QBO Updates.  They’re often quite useful — and a handy archive is located here: http://quickbooks.intuit.com/blog/quickbooks-update-archive/

Illinois, POS - Point of Sale, Tips

Chicago sales tax going back up to 10.25% in 2016

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The Cook County Board has approved a 1-percentage-point sales tax increase to bail out the county worker pension system.  This increase is effective January 1, 2016.

More here: Cook County Board votes to raise sales tax – Chicago Tribune

This means that small businesses in Cook County — which includes the City of Chicago — need to make plans to update their POS and sales tax systems so that they don’t get caught charging the old, lower rate to customers, but paying the new, higher rate to IDOR.  It’s surprising how often I see this happen, so: businesses, mark your calendars!  Accountants, reach out to your clients!  A 1% spread over the course of a month or a quarter could mean a lot of cash out-of-pocket for companies, especially retail stores, that do not plan ahead.

As for why this is happening:

“The immediate problems is pensions. The city of Chicago alone has a $20 billion unfunded liability and when Moody’s Investors Service dropped the city’s debt rating to junk, it forced $2.2 billion in accelerated debt payments. So Cook County has to borrow more money now at higher interest rates to pay those newly due bills AND it has to increase sales taxes to that whopping 10.25% rate effective in January to help pay the interest on it all.”

Source: http://www.cnbc.com/2015/07/16/sticker-shock-sales-taxes-in-chicago.html

As for what it means for the poor, and for our communities… well, this is entirely my own opinion, so feel free to stop reading here if what you wanted to know about were the ramifications for accounting.

But, in my opinion, it’s important to remember that sales tax hikes, unlike income taxes, affect even the poorest among us. If you don’t make a lot of money, then you have to spend 100% of it just to keep going. That means 100% of it is subject to sales tax. It’s not the same for someone with disposable income, who can choose not to buy something because sales tax makes it too expensive.

Furthermore, an over-ten-percent tax rate hurts the local economy, causing businesses to avoid locating here and customers to avoid shopping here, choosing the suburbs instead.  (This is not just my opinion — studies have shown this is exactly what happens: http://www.chicagotribune.com/business/ct-cook-county-tax-0719-biz-20150717-story.html#page=1 )

Lastly, this hike is entirely to shore up a pension fund that they’ve known for years was underfunded. An emergency measure now, when this is obviously something that bad planning caused in the first place, smacks of crappy governance.

But that’s just my opinion.  The important take-away as a small business owner or accountant?  UPDATE YOUR POINT OF SALE AND SALES TAX SYSTEMS BEFORE JANUARY 1.

QuickBooks Software, Tips

Fixing QuickBooks Online Accountant Chrome Login Problems

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I’d say that a solid 65% of the time — possibly more — that I have issues with QuickBooks and research the web for solutions, I end up at the Sleeter Group blog.  You’ve heard me rave about Greg Lam, Bonnie Nagayama, and Charlie Russell, and of course, about the annual Sleeter Technology Conference.  I’m raving once again.  Here’s Charlie’s simple list of “what to do” when once again, QuickBooks Online won’t let you sign in using Chrome, for whatever reason.

Fixing QuickBooks Online Accountant Chrome Login Problems – Sleeter Report — QuickBooks and Beyond

IRS, Tips

Tax Penalty Starts Today on Small Business Health Insurance HRAs

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MAJOR UPDATE AS OF DECEMBER 2016!  —  Please read new post here.

Small business groups are sounding a warning about an obscure Internal Revenue Service rule that takes effect Wednesday imposing heavy fines on small businesses for helping defray the cost of their workers insurance.

Health reimbursement accounts, or HRAs, are more simply known as the practice of reimbursing employees for the cost of insurance.  One problem: it’s illegal.  The reason behind it makes sense — an employee might have a personal tax situation whereby they can get Marketplace health insurance subsidized by the government, and it’s cheaper for the employer to simply reimburse the employee for that insurance than for the employer to provide an insurance plan.  However, that’s unfair to the rest of us, whose tax dollars go to paying for that subsidy.

Although that reasoning makes sense, in reality, most small business employers who provide this perk to employees do it because they avoid all the administrative costs and headaches involved with establishing and maintaining an insurance plan for their staff.

A huge issue is that a lot of these small business owners aren’t aware that the practice of reimbursing employees for health insurance now comes with extremely stiff penalties.

…employers who do not offer a group health plan, but give their workers additional pay to compensate for the purchase of health insurance or direct medical expenses, can be fined $100 per day, per employee. Over the course of a year that can add up to $36,500 per employee, up to $500,000 in total. In contrast, the penalty on businesses for failing to comply with the employer mandate is only $2,000 per year.

Please spread the word to your small business accounting clients or friends/colleagues who own businesses and have employees.  It is an extremely costly mistake to make, and according to this Accounting Today article, “14 percent of small businesses that do not offer group insurance reimburse their workers instead, unaware of the potential pitfalls of the regulation.”

Source: New Tax Penalty Starts Today on Small Business Health Insurance | Accounting Today News

Education, IRS, Tips

IRS Webinars for Small Businesses

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Did you know the IRS offers free webinars for small business owners?  From topics as diverse as the ACA to disaster recovery to tangible property regulations, I recommend to many of my clients that they bookmark the site and check back regularly to see what new topics are being offered.

Check it out here: Webinars for Small Businesses

Spread the word — why?  Because educated clients are more likely to run successful businesses.

Illinois, Tips

Open Co-working Week at Free Range Office Chicago, June 15-19

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Open Co-working Week at Free Range Office Chicago is coming up!

From Mon. June 15th through Friday, June 19th, Free Range Office (2nd Floor, 2141 W North Ave, Chicago, IL 60647) will be offering free workspace for a day, educational seminars, workshops, complimentary food and drinks, and a happy hour to get folks acquainted with their space and with the co-working movement. Email carly@freerangeoffice.com for a free Day Pass.

http://www.freerangeoffice.com/open-coworking-week/

The idea behind the co-working office space movement is to offer alternatives to both the corporate box and the isolating home office. “You set the pace, and the terms, in an environment that promotes comfort, innovation, networking and collaboration. The welcoming ambiance provides extra amenities to make your life easier, including ergonomic chairs and spacious desks; private telephone room; outdoor terrace; chef’s kitchen; gourmet coffee and tea; video blogging studio; laundry and dry cleaning delivery service; and even a weekly chair massage day to work out those knots.”

According to an article in last year’s Chicago Tribune, “coworking spaces are the front lines of Chicago’s new economy.”

http://www.chicagotribune.com/bluesky/series/coworking-spaces/chi-bsi-series-chicagos-coworking-spaces-ngux-story.html

(Note: I’m not affiliated in any way with Free Range Office, or any other co-working space — I just think they’re a genius idea for small businesses and have a few clients who get a lot out of the arrangement, so I wanted to spread the word.)