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Accounts Receivable Debt Past Due By State

September 3, 2013 • Jeff Cecchini • Comments Off on Accounts Receivable Debt Past Due By State

Accounts Receivable Debt Past Due By State

http://www.cortera.com/market-trends/2013/04/business-accounts-receivable-debt-past-due-by-state-february-2013-2/

In Business Management, Cash Flow Management

Issues with Low S-Corp Shareholder Compensation

September 3, 2013 • Jeff Cecchini • Comments Off on Issues with Low S-Corp Shareholder Compensation
There is no black & white, definitive line, and that there are several factors to consider, that may be unique to the particular activity of a tax year when considering reasonable compensation of a s-corp shareholder employee. A previous post helps provide information to consider when setting the amount, this post specifically addresses why one wouldn’t want to set the amount too low when the s-corp shareholder employee provides personal services to the corporation.
In a recent discussion with a CPA, he cited some recent C.P.E. that he attended where attorneys were discussing the issue and what seemed to be currently accepted, and stressed the corporate veil to be in place through the corporate formalities of proper documentation of certain events. We agreed that corporate formality is very important to obtain the corporate benefits.
However, our positions started diverging from there. The “function over form” rule as been in long standing effect, which essentially means that it doesn’t make a difference how much paper you have to define something, if its inherent form requires different treatment that different treatment applies.
In my research, in small S-corps, where shareholders personally and predominately provide services that represent the majority of the corp’s revenue, the IRS considers most of what could be profit distribution as shareholder compensation.
Given their clearly published position, I suggest a more conservative approach to avoid distribution reclassification as wages and it’s associated problems. If there is a reclassification, it has a cascading affect:
1. Payroll taxes are due on the reclassification (that would have to be paid originally).
2. The associated penalties and interest on the now late payment on the payroll taxes.
3. Other penalties such as accuracy penalty may apply.
4. Since the reclassification changes the net income of the corp and shareholder wages, the amendments to the personal tax return (due to Sch K-1 and W-2 changes) will most likely result in additional taxes, penalties, and interest.
5. Shareholder Basis re-calculations need to be made and negative tax consequences in subsequent years (beyond the year being audited) that have already been filed (because audits take a couple of years to happen) may bubble up nullifying prior year tax planning meant to avoid them, and require amendments to those years possibly resulting in additional tax, interest, and penalties.
6. Additional CPA and/or accountant charges to represent client in that matter because audit representation is most typically not included in tax preparation fees unless H&R Block is preparing the return. 🙂
7. Additional accountant fees to amend associated returns, for example state corporate and payroll tax returns.
8. And, last, but certainly not least, while the IRS is “under the hood” examining that part of the corp return, the rest of the tax return will certainly be under review as well. Yep, in my recent experience representing clients in IRS audits, limiting the scope of the audit is extremely challenging, if not impossible these days…this used to be my very subtle expertise when I had my tax preparation practice. This causes more time and money to be spent with the expanded representation and possible additional taxes, interest, and penalties if there are changes.
In summary, my personal opinion is this: I don’t think being aggressive in this area is worth what may amount to up to a few thousand dollars of savings at the risk of greater cost if re-classed. It’s very easy for the IRS to determine this programmatically. I think that being conservative will serve clients best overall in the long run, especially since pass-thru entities are a published focus/target of audits by the IRS.
Certainly it’s the clients’ choice what to do, and what level of risk they are comfortable with taking. I have a responsibility to do my due diligence and help them make an informed decision as well.
In IRS Tax Info

2013 Social Sec/Medicare Rates & Wage Bases

September 2, 2013 • Jeff Cecchini • Comments Off on 2013 Social Sec/Medicare Rates & Wage Bases

2013 Social Sec/Medicare Rates & Wage Bases

Social Security:
EmployEE: 6.2% on earnings up to $113,700
EmployER: 6.2% on earnings up to $113,700

Medicare:
Employee/employer (each) 1.45% on all earnings*

* Certain high-income taxpayers will be required to pay an additional Medicare tax beginning in 2013. For details, see the IRS information on this topic.
Basics: Employer must withhold additional Medicare tax at 0.9% on wages in excess of $200,000 in a calendar year, beginning at the time the excess is incurred. There is no employer match.

 

Source: http://www.socialsecurity.gov/policy/docs/quickfacts/prog_highlights/index.html?__utma=176294311.898040573.1378184239.1378184239.1378184239.1&__utmb=176294311.13.9.1378184588658&__utmc=176294311&__utmx=-&__utmz=176294311.1378184239.1.1.utmcsr=businessmanagementdaily.com|utmccn=(referral)|utmcmd=referral|utmcct=/33552/fica-wage-base-increases-to-113700-for-2013&__utmv=-&__utmk=157762042

Source: http://www.ssa.gov/pressoffice/factsheets/colafacts2013.htm

In CA Payroll Taxes, Payroll Taxes, SD Payroll Taxes

How to make IE8 trust a self-signed certificate in 20 irritating steps

September 2, 2013 • Jeff Cecchini • Comments Off on How to make IE8 trust a self-signed certificate in 20 irritating steps

How to make IE8 trust a self-signed certificate in 20 irritating steps

  1. Browse to the site whose certificate you want to trust.
  2. When told “There is a problem with this website’s security certificate.”, choose “Continue to this website (not recommended).”
  3. Select Tools➞Internet Options.
  4. Select Security➞Trusted sites➞Sites.
  5. Confirm the URL matches, and click “Add” then “Close”.
  6. Close the “Internet Options” dialog box with either “OK” or “Cancel”.
  7. Refresh the current page.
  8. When told “There is a problem with this website’s security certificate.”, choose “Continue to this website (not recommended).”
  9. Click on “Certificate Error” at the right of the address bar and select “View certificates”.
  10. Click on “Install Certificate…”, then in the wizard, click “Next”.
  11. On the next page select “Place all certificates in the following store”.
  12. Click “Browse”, select “Trusted Root Certification Authorities”, and click “OK”.
  13. Back in the wizard, click “Next”, then “Finish”.
  14. If you get a “Security Warning” message box, click “Yes”.
  15. Dismiss the message box with “OK”.
  16. Select Tools➞Internet Options.
  17. Select Security➞Trusted sites➞Sites.
  18. Select the URL you just added, click “Remove”, then “Close”.
  19. Now shut down all running instances of IE, and start up IE again.
  20. The site’s certificate should now be trusted.

Source: http://stackoverflow.com/questions/681695/what-do-i-need-to-do-to-get-internet-explorer-8-to-accept-a-self-signed-certific

In Windows

QuickBooks Tools

July 31, 2013 • Jeff Cecchini • Comments Off on QuickBooks Tools

Common and most used support tools for resolving problems with QuickBooks can be found here:

http://support.quickbooks.intuit.com/support/articles/inf23986

In QuickBooks Tips & How-to's

The Worst Companies To Work For In The U.S. (2013)

July 22, 2013 • Jeff Cecchini • Comments Off on The Worst Companies To Work For In The U.S. (2013)

I just read an article about 24/7 Wall St.’s ranking of the worst companies to work for in the US. It was not surprising that those companies had troubling attributes attributes in common. Some CEOs just don’t get investing in employee and customer satisfaction is key to being successful company. Read on to learn from others’ mistakes.

http://www.huffingtonpost.com/2013/07/20/worst-companies-to-work-for_n_3629056.html?utm_hp_ref=mostpopular#slide=2719926

In Business Management

Affordable Care Act: More Restaurants Replace Full-Timers, Concerned About Insurance Costs

July 15, 2013 • Jeff Cecchini • Comments Off on Affordable Care Act: More Restaurants Replace Full-Timers, Concerned About Insurance Costs

In response to the Affordable Care Act, more restaurants replace full-timers with part-timers because the Affordable Care Act requires employers with 50 or more full-time equivalent workers to offer affordable insurance to employees working 30 or more hours a week or face fines. Despite the Obama administration recent announcement that a one-year reprieve to 2015 on penalties for employers who don’t meet the new health-coverage requirements, this appears to be the start of a trend to avoid the cost of providing affordable insurance or the fines associated with not. Read the WSJ full article:

http://online.wsj.com/article/SB10001424127887324694904578601922653718606.html

In Business Management, Human Resources

Bean Counting vs. Excellence

July 1, 2013 • Jeff Cecchini • Comments Off on Bean Counting vs. Excellence

An interesting short article that includes an excerpt from the prior CEO of Ford Europe, Bob Lutz’s book “Car Guys vs Bean Counters” about making excellence a business’ priority and why it matters. His book is about what happened to America’s competitiveness, and why.

http://www.marketplace.org/topics/life/big-book/excerpt-car-guys-vs-bean-counters

In Business Management

QuickBooks 2013 R8 Released To Fix R7 Issues

July 1, 2013 • Jeff Cecchini • Comments Off on QuickBooks 2013 R8 Released To Fix R7 Issues

QuickBooks 2013 R8 Released To Fix R7 Issues (we hope). If you are affected by 3rd party add-ons not working, this is probably your best option, if not, we recommend waiting a couple of weeks to see how other users are affected by this release.

Read this article if you are thinking about installing.

http://www.sleeter.com/blog/2013/07/quickbooks-2013-r8-released/?goback=%2Egde_1910499_member_254587420

In QuickBooks Tips & How-to's

QuickBooks Payroll Fees Changing for New Customers

June 20, 2013 • Jeff Cecchini • Comments Off on QuickBooks Payroll Fees Changing for New Customers

Upcoming changes to the Intuit Payroll product line will apply to NEW small business payroll customers only, beginning July 22, 2013. Small business customers with existing payroll subscriptions will not be affected.

The changes do not affect QuickBooks Enhanced Payroll for Accounting Professionals. 

What’s Changing?
Simplified product offerings that easily help clients choose the right payroll service for their needs. Intuit will provide three distinct products, each with a monthly base price and monthly per-employee fee. The chart below summarizes the offerings. Please consult the Question and Answer section that follows for more details.

Full Service Payroll
Paychecks and taxes
done for you		 Enhanced Payroll
Paychecks and taxes		 Basic Payroll
Paychecks only
List base price $75 per month $35 per month $25 per month
Per-employee fee

$2 per employee per month (includes direct deposit)

 

  • Full Service Payroll is our outsourced payroll solution, accessible online and via mobile devices.
  • Enhanced Payroll and Basic Payroll are each available as a standalone online solution or from within QuickBooks.

How to buy? Contact QBPros today at 818-889-2407 or 605-343-2400.

Source: Intuit email 06/19/13

In Payroll, QuickBooks Add-ons, QuickBooks Tips & How-to's