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Monthly Archives: February 2012

Changes to Look for on Your 2011 W-2 Form

Tax time is in full swing and if you are employed, you should have received your W-2 (officially known as the Wage and Tax Statement) by the end of January. No doubt you are familiar with the W-2 form if you have been employed for several years. The size, shape and format of your W-2 depends on the employer’s payroll processing program, but regardless of format, each W-2 contains the same information.
W-2 Form

This year you may find something different on your form. The new health care legislation, the Affordable Care Act, requires employers to report the cost of your employee coverage under your employer-sponsored group health care plan on the W-2 they issue to you. Though optional for 2011 W-2s, these reporting requirements will become mandatory for employers with 250 employees or more in 2012 and become mandatory for all employers beginning with 2013 W-2s.
You’ll find such benefits reported in Box 12 of the Form W-2, identified by the Code DD. If you see health care insurance costs reported on your W-2 this year, don’t panic. Just because the information appears on your W-2 doesn’t mean it is taxable to you. These benefits have always been tax-free, and still remain tax-free under the health care legislation. The information is there so you can better understand the cost of the health insurance benefit you receive through your employment.
The health care coverage costs reported to you will not include the cost of long-term care coverage, accident or disability income insurance, liability insurance, worker’s compensation benefits, or other plans for which medical care benefits are incidental to other benefits. If your dental and vision coverage is under a stand-alone plan not connected to the major medical plan, those costs are also excluded from reporting.
Here are some more tips for reviewing your W-2:
  • Notify your employer if your social security number is wrong in Block A, and ask your employer to issue you a corrected form. Don’t try to change it yourself – your employer must send a correct copy to the government for the change to be effective.
  •  Compare the figures in Boxes 1 (federal wages), 2 (federal income tax withheld), 16 (state wages) and 17 (state income tax withheld) to the figures on your final paycheck. Don’t assume your W-2 is correct – employers can make mistakes.
  •  If your employer paid for your moving costs

    during the year, review  Box 1 to see if those payments are included there. If your employer included your moving expense reimbursement in income, be sure and claim your moving deduction on your tax return. Skip this step and you’ll be overpaying your income taxes by missing an important deduction.  QuickBooks Expert will guide you through deducting these expenses.

  • Check the figure in Box 4 if you made more than $106,800 in 2011.  This is especially important if you had more than one employer in 2011. The maximum social security  that should have been withheld from your paycheck in 2011 is $4,485.60 (4.2% times $106,800).  If more than that was taken out for Social Security taxes from your combined employers, you may claim the excess withholding as a credit on your income tax return.
  • Read Box 13 to see if “statutory employee” is checked. If it is, you must report your wages for this W-2 on Schedule C of your Form 1040.
  • If you didn’t receive your W-2 form by mid-February, contact your employer. If the employer refuses to provide the W-2 to you, contact the IRS at 1-800-829-1040 with the employers name, address, telephone number and employer ID number, if you know it. If you still can’t get a W-2 form, file Substitute W-2 Form, based on your final pay stub from that employer for 2011.
Knowing how to read a Form W-2 can help you understand your salary, and also help you get a head-start when preparing your taxes.
 

QuickBooks service discontinuation policy and upgrade information

QuickBooks service discontinuation policy and upgrade information

Live technical support and add-on business services such as payroll, credit card processing, QuickBooks Email, and online banking will be discontinued for QuickBooks for Windows 2009, QuickBooks 2009 for Mac, and a few other products as of May 31, 2012.

We are committed to developing easy, straightforward financial tools that help you today and grow with you tomorrow. But it’s a balancing act – making QuickBooks better and easier to use while still supporting older versions. So we offer support for the current version of QuickBooks and the two previous versions.

This article explains what service discontinuation means to your business and provides information on upgrading to the latest version of QuickBooks.

Call us at any time to take advantage of special upgrade pricing and to discuss your options:

  • QuickBooks Pro or Premier or QuickBooks for Mac: 866.676.9670
  • QuickBooks Enterprise Solutions: 800.450.7498
What service discontinuation means

Products affected by service discontinuation as of May 31, 2012, are listed in the table below. If you don’t make use of live technical support or any of our add-on services, and are happy with your current version of QuickBooks, you can continue to use it.

If you are using a product affected by service discontinuation and want to maintain access to live technical support and add-on services, you’ll need to upgrade to the latest version of QuickBooks as soon as possible.

Contact: QuickBooks Expert

Email:helpdesk@quickbooks-expert.us

WeB: http://quickbooks-expert.us

 
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Posted by on 28/02/2012 in Bookkeeping

 

Couples who filed joint returns must now file separate powers of attorney

Starting March 1, the IRS will no longer accept old versions of Form 2848, Power of Attorney and Declaration of Representative, and will accept only the version released in October 2011. The new version of the form requires a husband and wife who filed a joint tax return to each file a separate power of attorney on separate Forms 2848 to designate the representative he or she chooses, even if it is the same person (Instructions to Form 2848 (rev. October 2011)).

Under the most recent prior version of Form 2848 (rev. June 2008), a husband and wife who filed a joint return and wanted to have the same representative could file one Form 2848 (Instructions to Form 2848 (rev. June 2008)).

Another change in the form is that the representative must provide his or her preparer tax identification number (PTIN). A new category of representative—registered tax return preparer—has been added to the form.

In discussions with Benson Goldstein, senior technical manager, tax, for the AICPA, the IRS has indicated that only the new version of Form 2848 will be accepted, starting on March, 1. Husbands and wives who already had a power of attorney on file as of that date do not have to file new separate forms.

Contact : helpdesk@quickbooks-expert.us

WeB: http://quickbooks-expert.us

 

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Seven Tips to Help You Determine if Your Social Security Benefits are Taxable

Many people may not realize the Social Security benefits they received in 2011 may be taxable. All Social Security recipients should receive a Form SSA-1099 from the Social Security Administration which shows the total amount of their benefits. You can use this information to help you determine if your benefits are taxable. Here are seven tips from the IRS to help you:

1. How much – if any – of your Social Security benefits are taxable depends on your total income and marital status.

2. Generally, if Social Security benefits were your only income for 2011, your benefits are not taxable and you probably do not need to file a federal income tax return.

3. If you received income from other sources, your benefits will not be taxed unless your modified adjusted gross income is more than the base amount for your filing status (see below).

4. Your taxable benefits and modified adjusted gross income are figured on a worksheet in the Form 1040A or Form 1040 Instruction booklet. Your tax software program will also figure this for you.

5. You can do the following quick computation to determine whether some of your benefits may be taxable:

  • First, add one-half of the total Social Security benefits you received to all your other income, including any tax-exempt interest and other exclusions from income.
  • Then, compare this total to the base amount for your filing status. If the total is more than your base amount, some of your benefits may be taxable.

6. The 2011 base amounts are:

  • $32,000 for married couples filing jointly.
  • $25,000 for single, head of household, qualifying widow/widower with a dependent child, or married individuals filing separately who did not live with their spouse at any time during the year.
  • $0 for married persons filing separately who lived together during the year.

7. For additional information on the taxability of Social Security benefits, see IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits. You can get a copy of Publication 915 at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

Link: 

Publication 915 , Social Security and Equivalent Railroad Retirement Benefits.

Contact : helpdesk@quickbooks-expert.us     WeB : http://quickbooks-expert.us

 

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Most Overlooked Tax Deductions

I know most people want to pay their taxes honestly – they’re not looking to cheat the system. However if they qualify for a tax deduction that can lower their obligation or even increase their tax refund, 99 out of 100 times they’ll take it. The problem is that sometimes even with the best intentions tax filers can overlook legitimate tax deductions that they are entitled to.  I can fix that problem with today’s article.

Overlooked Tax Deductions

I’ll share a few overlooked tax deductions that people miss out on. I’ll group them by home, and finally business. I hope it makes it easier for you to find a deduction you can claim next time you file your taxes.

Family

It always starts at home, right? 😉 The good news is that taking care of your family can be a tax benefit come tax time.

  • Personal property taxes: You may have received a state and local tax bill during the year for your personal property like a recreational vehicle. While it’s a chunk of change out of your budget, the good news is that state and local property taxes related to personal property is tax deductible.
  • Medical expenses: You claim the amount of your medical expenses  that exceeds 7.5% of your adjusted gross income. Double check to see if you’re overlooking anything. This tax season families with new babies may be able to deduct breastfeeding supplies like a breast-pump.
  • Charitable contributions: Many of us keep receipts for charitable donations, but did you also include the supplies you’ve spent helping a non-profit organization?

Did any of the tax deductions mentioned above surprised you? Since we had our little girl this summer I’m happy about breast pumps being included for medical expenses.

Home

We spend so much time at our beloved homes. The roof over our heads can be an even bigger benefit when you consider some of the tax deductions overlooked.

  • Moving expenses: If you had to move into a new place due to a job, you may be entitled to a deduction on your moving expenses. You have to meet the distance and time guidelines as outline by the IRS.
  • Refinancing points: If you refinanced your house this past year, you may be able to deduct a portion of your points (it’s spread over the length of the loan). If you have a 15 year mortgage, you can deduct 1/15 of the points each year.  Points are pre-paid interest paid to the lender by the borrower to obtain a mortgage loan.  This interest can also be called loan origination fees, maximum loan charges, discount points, or loan discounts.
  • Casualty-loss deduction: If you’ve been affected by one of the weather related disasters that happened this past year, you may qualify to get a tax deduction on your loss.

Don’t forget to look at your home mortgage interest you’ve paid as well. It can be a big deduction for some people.

Business

Whether you are looking for work, are working from home or at a company, there are some deductions that you need to be aware of.

  • Home Office Expenses: I was surprised to learn that some entrepreneurs put off including their home office expenses with their deductions to ‘be on the safe side’. However if you’re entitled to it, you should claim it. Make sure you keep good record and you shouldn’t have a problem.
  • Cell phones: If you have a cell phone used to handle business matters that bill could be tax deductible.
  • Journals and Newspapers: Depending on whether or not your subscriptions are job related, this is another overlooked deduction.

What other business related tax deductions do you think you qualify for?

Tax Software to Your Aid

This is a big reason that we use tax software  for filing. It’s another set of eyes that can guide you towards the legal tax deductions and credits that you already qualify for. Every year tax laws change and it’s extremely hard to keep up to date with all of these changes.

Thoughts on Tax Deductions

I’d love to hear your thoughts on getting the tax deductions you deserve. How many of you itemized your taxes last year? What deductions did you take? What’s your tax situation this year? Do you qualify for more tax deductions or less?  Fore more details write to:

Email: helpdesk@quickbooks-expert.us

WeB : http://quickbooks-expert.us

 
 

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Safeguard Your Refund – Choose Direct Deposit

Safeguard Your Refund – Choose Direct Deposit  

Direct deposit is the fastest, safest way to receive your tax refund. When a taxpayer combines e-file and direct deposit, the IRS will likely issue your refund in as few as 10 days.

Here are four reasons more than 79 million taxpayers chose direct deposit in 2011:

1. Security Thousands of paper checks are returned to the IRS by the U.S. Post Office every year as undeliverable mail. Direct deposit eliminates the possibility of your refund check being lost, stolen or returned to the IRS as undeliverable.

2. Convenience The money goes directly into your bank account. You won’t have to make a special trip to the bank to deposit the money yourself.

3. Ease When you’re preparing your return; simply follow the instructions on your return or in the tax software. Make sure you enter the correct bank account and bank routing numbers.

4. Options You can deposit your refund into multiple accounts. With the split refund option, taxpayers can divide their refunds among as many as three checking or savings accounts and up to three different U.S. financial institutions. Use IRS Form 8888, Allocation of Refund (Including Savings Bond Purchases), to divide your refund. A word of caution: Some financial institutions do not allow a joint refund to be deposited into an individual account. Check with your bank or other financial institution to make sure your direct deposit will be accepted. Additionally, Form 8888 should NOT be used to designate part of your refund to pay your tax preparer.

For more information about direct deposit of your tax refund and the split refund option, check the instructions for your tax form. Helpful tips are also available in IRS Publication 17, Your Federal Income Tax. To get a copy of Publication 17 or Form 8888, visit the IRS Forms and Publications section at the IRS.gov website or call 800-TAX-FORM (800-829-3676).

Links:

Yeshwant Mehta (President)                                                                                                                      QuickBooks Expert

f: +1 (206) 309-3673
e: ymehta@quickbooks-expert.us
w: http://quickbooks-expert.us

 

Tax Tips for the Self-employed

Tax Tips for the Self-employed

IRS Tax Tip 2012-16, January 25, 2012There are many benefits that come from being your own boss. If you work for yourself, as an independent contractor, or you carry on a trade or business as a sole proprietor, you are generally considered to be self-employed.
Here are six key points the IRS would like you to know about self-employment and self- employment taxes:

  1. Self-employment can include work in addition to your regular full-time business activities, such as part-time work you do at home or in addition to your regular job.
  2. If you are self-employed you generally have to pay self-employment tax as well as income tax. Self-employment tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. You figure self-employment tax using a Form 1040 Schedule SE. Also, you can deduct half of your self-employment tax in figuring your adjusted gross income.
  3. You file an IRS Schedule C, Profit or Loss from Business, or C-EZ, Net Profit from Business, with your Form 1040.
  4. If you are self-employed you may have to make estimated tax payments. This applies even if you also have a full-time or part-time job and your employer withholds taxes from your wages. Estimated tax is the method used to pay tax on income that is not subject to withholding. If you fail to make quarterly payments you may be penalized for underpayment at the end of the tax year.
  5. You can deduct the costs of running your business. These costs are known as business expenses. These are costs you do not have to capitalize or include in the cost of goods sold but can deduct in the current year.
  6. To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be indispensable to be considered necessary.

For more information see the Self-employment Tax Center, IRS Publication 334, Tax Guide for Small Business, IRS Publication 535, Business Expenses and Publication 505, Tax Withholding and Estimated Tax, available at www.irs.gov or by calling the IRS forms and publications order line at 800-TAX-FORM (800-829-3676).

Links:

Yeshwant Mehta (President)

QuickBooks Expert
t: +1 (713) 370-6255
f: +1 (877) 248-2802
m: (+91)9867704230
e: ymehta@quickbooks-expert.us
w: http://quickbooks-expert.us

 

What to Do If You Are Missing a W-2 Issue No:IRS Tax Tip 2012-20

What to Do If You Are Missing a W-2 

Make sure you have all the needed documents, including all your Forms W-2, before you file your 2011 tax return. You should receive an IRS Form W-2, Wage and Tax Statement, from each of your employers. Employers have until Jan. 31, 2012 to issue your 2011 Form W-2 earnings statement.

If you haven’t received your W-2, follow these four steps:

1. Contact your employer  If you have not received your W-2, contact your employer to inquire if and when the W-2 was mailed.  If it was mailed, it may have been returned to the employer because of an incorrect or incomplete address.  After contacting the employer, allow a reasonable amount of time for them to resend or issue the W-2.

2. Contact the IRS  If you do not receive your W-2 by Feb. 14, contact the IRS for assistance at 800-829-1040. When you call, you must provide your name, address, Social Security number, phone number and have the following information:

•  Employer’s name, address and phone number

•  Dates of employment

•  An estimate of the wages you earned, the federal income tax withheld, and when you worked for that employer during 2011. The estimate should be based on year-to-date information from your final pay stub or leave-and-earnings statement, if possible.

3. File your return  You still must file your tax return or request an extension to file by April 17, 2012, even if you do not receive your Form W-2. If you have not received your Form W-2 in time to file your return by the due date, and have completed steps 1 and 2, you may use Form 4852, Substitute for Form W-2, Wage and Tax Statement. Attach Form 4852 to the return, estimating income and withholding taxes as accurately as possible.  There may be a delay in any refund due while the information is verified.

4. File a Form 1040X  On occasion, you may receive your missing W-2 after you file your return using Form 4852, and the information may be different from what you reported on your return. If this happens, you must amend your return by filing a Form 1040X, Amended U.S. Individual Income Tax Return.

Form 4852, Form 1040X and instructions are available on this website or by calling 800-TAX-FORM (800-829-3676).

Links:

Contact :

Yeshwant Mehta (President)

QuickBooks Expert
t: +1 (713) 370-6255
f:
+1 (877) 248-2802
m: (+91)9867704230
e: ymehta@quickbooks-expert.us
w: http://quickbooks-expert.us

 

How to protect yourself against liability as a bookkeeper

  • To protect yourself against liability, consider the following practices:
  • Avoid public statements about your employer.
  • To all inquiries (even informal ones by phone) about your firm’s financial activities, answer “No comment.”
  • Add a cover letter to your financial statements that says, “I am not independent and did not audit the enclosed financial statements.”
  • Don’t be the only signatory of checks.
  • Hold checks until funds are available.
  • Follow to the letter pension laws and plan documents.
  • If you do work for a closely held corporation, consider asking for an Indemnification Agreement from the owners that personally guarantees payment of payroll taxes. This both protects you and allows the owners to run the business without having to countersign each paycheck.
  • If something that an employee does raises a question related to your area of responsibility (e.g., bookkeeping or office management), ask about it. For instance, if another employee is taking out cash without proper documentation, it is entirely proper to ask about it. Ignoring a questionable action or practice does not protect you and may result in your being held accountable for it.
  • More details on http://quickbooks-expert.us
  • Yeshwant Mehta (President) QuickBooks Expert Email: ymehta@quickbooks-expert.us
 
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Posted by on 01/02/2012 in Bookkeeping

 
 
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