Taxes and Receipts

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Perhaps because everyone has been busier and our lives have become more complicated, I’ve noticed this tax season that people seem to be having more of problem getting and staying organized.

Receipts are scattered, lost, or become unreadable. One way to resolve this issue is to purchase an electronic receipt scanner. This piece of hardware plugs into your laptop or computer, scans a receipt, and then records the total and categorizes the expense information into your computer. No more worrying about whether or not you missed an amount. You can find a receipt scanner pretty inexpensively at most office supply stores.

Consider investing in something that will save you time and money. Organize your 2010 receipts and get a jump on 2011! Remember, we have 3 extra days to get our tax returns filed this year!

Are You Doing What’s Right For Your Business?

Are you practicing sound fiscal management with your business? Most of us believe we are, but it is imperative that you maintain accurate and complete records for your business. Here are a few basic rules to guide you:
• Do not commingle funds! Ever. Period. Keep business money separate from personal money, open a business checking account and don’t mix the two.
• Include only business expenses, not personal expenses, in your business records.
• Keep ALL receipts for business purchases. If the business purpose is not clear from the receipt, include a brief explanation on the receipt. Don’t rely on your memory!
• Keep a record of all business income.
• Keep a record of all business expenses.
• If you have inventory…count it and track it!
• Create a company policy to make it easy for the company to consistently track and record reimbursable expenses. Failing to track reimbursable expenses can result in lost money as well as lost tax deductions.
• Track your mileage. Keep a record of where you went, the date, the mileage, and the purpose. In the event of an audit, detailed records will save you!

Now is the time to review your procedures and make the necessary changes. Don’t wait until it’s too late!

Residential Energy Property Credit

Are you aware of the Residential Energy Property Credit for homeowners when filing your 2010 tax return? Here are a few points for you to consider:
• The maximum credit allowed is $1500 – this could be split between 2009 & 2010 but it is a $1500 grand total credit.
• The credit is calculated at 30% of the cost of the product. If you put in new energy efficient windows for $4000 then the credit available for those windows is $1200.
• The credit ONLY applies to the product cost itself, not the labor or installation costs. So the total bill for the windows was $6000, only the amount that was for the actual windows is used to calculate the windows. Do not include labor or installation fees!
The credit applies to improvements such as adding insulation, energy efficient exterior windows, and energy efficient heating and air conditioning systems.

1099 Reporting Requirements

Did you properly issue IRS form 1099 Misc this year? If you have a trade or business and operate for the purpose of making a profit, then you fall under this category and should have issued 1099 Misc. Form 1099 should be issued to anyone your business pays $600 or more to in any tax year. This is any payments made to an individual or partnership. Generally speaking if you’ve made payments to a corporation, this is excluded. Payments to corporations are included only if they are for medical, health care, legal or fishing activities.

How do you determine whether or not the business you are dealing with is a corporation, sole proprietor, LLC, or partnership? When you begin doing business with a vendor have the vendor complete form W9, Request for Taxpayer Identification. These forms are for your records and are not submitted to the IRS. The W9 will help you determine how to treat their business. Form W9 is available to be downloaded from www.irs.gov

These are a series of questions and answers provided by the IRS which may help provide you with more information on 1099 reporting:

· Question: Is an S-Corporation treated as a “corporation” when determining whether or not a 1099 should be issued?
IRS answer: Yes. The entity is a C-Corp that makes an election to be treated as an S-Corp. When completing Form W-9, Request for Taxpayer Identification Number and Certification, the S-Corp checks the box for a corporation.

· Question: Does a 1099 get issued to a limited liability company (LLC) reporting to the IRS as a partnership or to a single-member LLC that is incorporated with the state?

· IRS answer: It is the federal tax status that matters. Therefore, if the LLC is a partnership, then 1099s should be issued as required.

· Question: If a company has a “doing business as” (dba) name and they list themselves as a corporation, is it correct they do not need a 1099?

· IRS answer: It depends on the type of payment. Corporations are exempt recipients but a 1099-MISC may be required under certain circumstances. See the Form 1099-MISC instructions for further information.

· Question: If a sole proprietor has a dba name, and the payments are made out to the dba company, do we use the company EIN number or the name of the sole proprietor on line 1. I thought if we used their Social Security number on Form 1099-MISC, then their first name should be listed on line 1 of the name section. If we used their EIN number, then their dba name would be listed first and then their individual name listed next.

· IRS answer: The sole proprietor’s name goes on the first line, the dba goes on the second line; this is true whether the EIN or SSN is used.

Currently the regulations governing 1099 issuances are set to expand on January 1, 2012. As part of the new Healthcare Reform, a section was added that includes issuing 1099’s to corporations and will also include goods (like office supplies). In other words, every time your business spends $600 or more to a vendor, you will need to issue a 1099 at the end of the tax year. This has the potential to be a paperwork nightmare and burden for small business owners. The good news is that President Obama stated in his State of the Union speech on January 25, 2011, We can start right now by correcting a flaw in the [health care] legislation that has placed an unnecessary bookkeeping burden on small businesses”. We look for the new regulations to be removed or substantially reduced.

Are You Attracting Customers?

How is your business doing in this uncertain economy? In today’s economy a business plan is a must. Do you know where your business is going or have you fallen into the “deer in the headlights” trap. Develop your business plan, write it out, rewrite it, and get very clear on the direction you want to take your company. Envision where you want your business to be and write a plan for 18 months. Consumers are once again starting to spend money, but they are more discriminating on how and where they spend their money.

Are you attracting these consumers in your business? With the successful use of the internet in business, it is easier and easier to become impersonal in our dealings with our customers. To successfully attract today’s consumers we must do more than offer our products or services. Consumers today are asking us to listen to them, respect them, demonstrate a sincere interest in discovering their needs and remember those needs. Earn their trust and you’ll have not only their business, but their loyalty AND referrals. Give them your best and nothing less.

Do these questions pertain to you? Is your business a master of connecting with its customers – or something less? Have you inspired your employees? Do you demonstrate every day how to connect with customers? Do you protect your company culture from drama, indifference and all-about-me egos? Has your business evolved into something that just goes through the motions of customer service, or is it passionate about making a difference in the lives it touches?

If you’ve been looking for that “something” to take your business to the next level, try Verace Accounting for your Virtual Accounting/Bookkeeping needs and free yourself up to concentrate on evolving your business into something truly worthy.

Take A Look In The Mirror!

How do you show up? A company’s attitude is a reflection of its leader. Let’s thitucson accountingnk about how a company in the worst of situations can change so dramatically when its leadership steps up and leads the way to success. Sometimes a new leader needs to take control when the current leader is stuck and frustrated. Do you show up to win or do you show up defeated? Do you show up positive and encouraging or do you show up negative and combative? If you’re blaming your employees’ lackluster performance, you’re blaming others for what you’ve created.
Do you understand the “culture” of your business? To understand business culture, take a look at the collective behavior of groups of people and organizations. To understand attitude, all you need to do is look at the faces and behaviors of those you work with. More importantly, don’t forget the face you see in the mirror. Engaging, inspiring and optimistic leaders lead engaging, inspiring and optimistic teams – and that’s the attitude your customers encounter. Grumpy leaders lead grumpy teams – and THAT’S the attitude your customers encounter. It’s that simple.
Simply put….as business owners YOU are the face, attitude, and culture of your business. If your team is failing take a look at yourself. Do you have a clear mission and direction for your business? With no clear direction from you, your team will fail.

Are You Achieving Your Business Vision?

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Do you have a vision for your business?

When planning and starting a business, we all have some sort of vision, or goal for our company. Some visions are more abstract while others have a clear, written plan. The process varies, but we all have a vision. Then what keeps you from achieving that vision?
Do you fear making changes in your company? Businesses must be able to adapt and evolve quickly. If you fear making necessary changes then guess what – the clock is ticking! Sooner or later your business is going to go boom and your staff is going leave because your business is stagnant. Only you can decide when to end your self-imposed “hostage” situation.
Do you want your business to grow and succeed? Of course you do. Then it’s time to become the leader your business needs you to be. Fact: You’re not going to implement change without rocking the boat. You may have toxic employees that should have been set free long ago. You may have employees that simply won’t fit the new culture your vision requires. Cultivate a team culture and reward behaviors that drive teamwork. Use a pay system that rewards overall performance. Empower your employees! YOUR business is on the line. Do what’s best for your business and you will achieve the vision you’ve been chasing for years!

Small Business Can Succeed!

Small businesses are the backbone of the American economy. Typically a small business is defined as having fewer than 200 employees. Of all US businesses, it is estimated that more than 99% are small business. Nationally, small businesses:
 Create 75% of all new jobs
 Employ 52% of the business workforce
 Produce 51% of our nations private sector gross domestic product (GDP)
 Generate 96% of all the US exported goods and services
 Include 7 million women and minority-owned firms
 Provide about 67% of “first job” opportunities
 Produce more than half of the innovations in products
As you can see, small businesses do succeed. Do you have what it takes?

Here is a great tip….accounting functions, as mundane as they sometimes seem, are actually your biggest secret weapon for business management, growth, and success! Only with accurate and consistent measurement of your company’s financials can we as business owners effectively manage and expand our business. Verace Accounting is here to help you succeed. Contact us to see how we can help you grow!

The Biggest Mistake Small Biz Owners Make…

tucson accountingAs small business owners bookkeeping/accounting tasks are often tasks we take on ourselves, shove to the backburner and hope we can catch up on them later.  These tasks can be time consuming, feel unrewarding, and the mistakes can be costly.

One recurring mistake made by business owners is not properly valuing their own time.  How you value your time is one of the key factors to succeeding in your business.  Now is the time to make the conscious decision to leave these stressful and time consuming tasks to a professional accountant.

A professional accountant will know what to record, how to record it, and also accounting changes that affect your business on an ongoing basis.  Not only will this safe you time, but it also frees up your time so that you can continue to focus on growing your business and taking it to the next level.

Now is the time to take a look at your business and make the simple strategical decision to turn over your accounting tasks to a professional.  Turn these dreaded tasks into your secret weapon for business management, success, and growth.

Verace Accounting is your solution to overwhelming accounting tasks.  Call us today and discover how we can support you in growing your business with ease.

Verace Accounting…

10950 N. La Canada #6204
Tucson, AZ 85737

520 668-9338