Friday, January 30, 2009

Small businesses can run into tax prep pitfalls

Income tax filing season can be a trying time for small business owners, and in a recession, even more so.

One of the biggest pitfalls owners are likely to encounter is a perennial one: poor record-keeping that not only makes it hard for them to complete their returns, but also to know where they stand financially. Another common problem is keeping up with changes in the tax laws, especially for state and local governments that are now looking for ways to increase revenue.

Ask tax professionals what their clients struggle with, and haphazard books and ledgers is often the first answer. Many business owners don't know how much money they have on hand, how much they owe and what their customers or clients owe them.

"You really need to control your books and understand what you're making," said Jeffrey Chazen, a certified public accountant with Eisner LLC in New York.

Some business owners use their checkbooks and credit card bills as their records. But it's a problem when "they can't locate all their check registers or all of their bank statements," said Gregg Wind, a CPA with Wind Bremer Hockenberg LLP in Los Angeles.

Others are even more disorganized, with boxes or piles of invoices, receipts and canceled checks that need to be sorted -- CPAs ruefully refer to these owners as "shoebox clients." These owners are in danger of missing out on important deductions and can end up overpaying the government. Or, if the government questions

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Thursday, January 29, 2009

Intuit Offers $10,000 Grants to Accounting Firms

Intuit has launched a program offering $10,000 cash grants and up to $10,000 in products and services to 10 accounting firms.

The Power to Get More Done program aims to help firms deal with the economy by giving them money to hire extra staff and invest in their business, along with products and services to increase their productivity.

Accounting professionals can download the entry form at and prepare a brief business plan that explains how they will use the money to stimulate growth. Entries are due by 9:30 p.m. Pacific time on April 30. Judges include a panel of Intuit and accounting profession executives, with winners chosen each month from May through July.

In addition, Intuit is offering a 50 percent discount on a bundle of QuickBooks Premier Accountant 2009 and QuickBooks Pro 2009 products to accountants. Accounting professionals can also pass along free software and more than $2,000 in savings on select Intuit financial and business management products and services to their clients.

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Wednesday, January 28, 2009

Do You Need Accounting Software?

If your bookkeeper spends Saturdays in the office trying to keep up with paychecks and taxes and tax code updates and outstanding invoices, you know what?—you need accounting software.

If someone came to your office and asked to see your accounting system, what would you show them?

If you haven't been using accounting software, it would probably be going something like this: You'd turn to your PC and fire up some Excel spreadsheets and Word documents. Pull open a drawer and grab some invoices and purchase orders that need processing. You might nod your head toward a calculator and a label printer, and point out your checkbook and envelopes. There are sticky notes on your monitor, one from an employee who wants to change her income tax withholding, another from a vendor wanting to check on a payment, and another from a customer checking on an order.

If you have coworkers, that same scene more than likely would be duplicated at their desks.

What if your visitor asked you for a current list of your customers? Quick—how many widgets did you sell last month? How many are left in inventory? Which of your employees are on a health-care plan? What was your profit or loss from last quarter? Whom do you buy widgets from, and what are your credit terms?

In the time it's bound to have taken you to accomplish all of this, you could have set up and started using small business accounting software. Because it sounds as if you need it.

A Place for Everything
There are three major areas of benefit in using accounting software if you have a small business, and lots of little ones. Taken together, they mean you're sure to save time and even money—and gain time to concentrate on growing your business.

Customers. That list of customers you're trying to maintain as a Word document or in Outlook or a Rolodex or—say it ain't so—on paper? That list needs to be in a database designed for finances. Accounting software contains record formats that let you type in—or sometimes import—relevant details, things like contact information, credit terms and limits, credit card numbers, and price levels. You can usually set up custom fields to track any additional information you'd like to. And sometimes customer records can also contain descriptions of jobs you're working on for that company; they may even display a history of your transactions with them.

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Tuesday, January 27, 2009

Bookkeeper Service – Top 5 Things to Check

For all types of business, maintaining financial data is important. What’s even more important is having someone who can do this work flawlessly. This is the reason why businesses continuously look out for the perfect bookkeeper service.

With the appropriate bookkeeper service, business owners should be worry-free. Bookkeepers will handle the tasks relating to financial transactions including recording income and expenditure, drafting bank reconciliation statements, handling invoices, and managing payroll. All business owners know how important it is to have a bookkeeper. However, what most do not know is how to actually find a good one.

First, it is important to evaluate potential bookkeepers in terms of training and educational background. Although bookkeepers are not necessarily required to have a degree in accounting, all must have had formal training in the field. You will most likely find individuals who have gone through some college coursework or have been certified by accredited institutions.

Second, most business owners also prefer a bookkeeper service provided by an experienced bookkeeping firm. Hiring an experienced bookkeeper allows you to ensure expert management of your financial records. Furthermore, experienced bookkeepers work more efficiently. Because bookkeeper services are often paid on an hourly basis, individuals who work faster will allow you to save more. To prove actual bookkeeping experience, most bookkeeping firms would not hesitate to provide a list of references.

Third, personality is also worth observing when evaluating those who provide bookkeeper service. Obviously, it would be important for you to get along with your bookkeeper but more importantly, it is worth taking the time to observe and look out for signs of customer responsiveness, organization, and attention to detail. More often than not, individuals who have these qualities provide a good bookkeeper service.

Fourth, although some businesses still engage in traditional bookkeeping service, most have adapted to the technological changes in business by doing computerized bookkeeping work. If your business uses specific software, it would also be important that potential bookkeepers be familiar with that.

Lastly, it is important to make sure that the bookkeeper you want to employ will suit the budget of your business. Ask your potential bookkeeper how much they charge. If their rates are not reasonable for your company, do not hesitate to speak to them to see if you can discover a better pricing plan.

The benefits of hiring a good bookkeeper service are undeniable. However, the value of a bookkeeper would depend mostly on qualifications and capabilities. For this reason, it is important to thoroughly evaluate each and every potential candidate and hire only the bookkeeping firm that provides a bookkeeper service that is most appropriate to your business’ needs.

Good Bookkeeper Services work flawlessly and help the business owner make sound business decisions. There are many reputed Bookkeeper Services Firms that help small and medium businesses worldwide.

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Monday, January 26, 2009

Property Tax Deadline Is January 31

The Jan. 31 property tax deadline is less than a week away and the Smith County tax office wants property owners to know that owning property means owing taxes.

"If you own property, you owe taxes," said Tax Assessor/Collector Gary Barber. "A lot of people assume because they didn't receive a statement that they don't have to pay but that's not the way it is. They are still responsible for that property and the taxes on it."

Barber said owners not exempt from paying property taxes need to be aware that penalties begin at 7 percent on Feb. 1 and increase 2 percent per month until reaching 18 percent on July 1.

He said by July a person's tax statement will have incurred a 33 percent penalty and he encourages payment even if it is not the full amount.

Owners with questions can contact the tax office staff for information regarding properties, Barber said. He said staff can locate the tax information with the address or former property owner's name.

Property owners can also access tax information and make payment on the county Web site.

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Friday, January 23, 2009

Free tax help is available for those with low incomes

Low-income taxpayers in need of help preparing their returns and obtaining refunds can once again get help from a host of free tax preparation sites being launched this Saturday.

The Creating Assets, Savings and Hope (CASH) Coalition, an initiative of the United Way of Buffalo and Erie County, is offering four hours of free tax preparation and filing as part of its Cash In Saturday event.

The group will also offer access to a wide range of other services for those earning less than $40,000 a year, such as information on earned government benefits and adult education opportunities. Qualified taxpayers are also eligible for other services from 25 local banks, educational institutions, health and human service nonprofit agencies, and government agencies.

The event, which will take place from 10 a. m. to 2 p. m., marks the grand opening this year of the coalition’s one-stop resource for such services, known as The Hope Center, located at the Tri-Main Center at 2495 Main St. in Buffalo.

Separately, accounting students from the University at Buffalo School of Management, who are certified by the U. S. Internal Revenue Service, will also provide free tax preparation to individuals and families making less than $42,000 a year.

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Thursday, January 22, 2009

Have an IRS Tax Problem? Here Are 6 Strategies to Solve Your Tax Problems Today

If you owe money to the IRS, you have many options legally available to you, to help you solve your tax problems.

Full Payment

The first option is the simplest and most straight-forward. You can simply pay off the outstanding tax balance. This assumes you have the resources to do so. You could either pay from current funds on hand or from borrowed funds. Once your account is paid in full, all collection activity will cease. Any outstanding liens and levies will be automatically removed. Unfortunately, not everyone can afford to make full payment. If you were able to make full payment to the IRS, you probably wouldn’t have a tax problem .

Installment Agreement

If you cannot afford to pay in full your past tax liability, you can request for an Installment Agreement. An installment agreement is effectively a loan from the IRS. There is no credit check although penalties and interest will continue to be charged until the balance is paid off. This will allow you to pay off your tax liability through monthly installments.

The installment agreement may pay all (Full Pay) or part (Partial Pay) of your past tax liability.

If your total tax debt is less than $25,000 the IRS may consider you for a streamlined installment agreement under which you must complete the payment of your tax within 60 months. This type of installment agreement typically does not require as much financial disclosure. If you cannot pay the amount within 60 months, you must make full financial disclosure of your income, expenses and assets. These Installment Agreements can be much more difficult to obtain.

You must file Form 433-A or 433-B (or both). The IRS will analyze your Form 433-A or 433-B and use the information to determine the amount you can pay monthly. Your monthly income is compared to actual expenses and the amount of expenses considered “allowable” by the IRS. These allowable expenses may be much lower than what you are actually paying. The IRS ultimately has the discretion to decide on the payment amount.


In certain limited circumstances, the IRS has the authority to settle, or compromise, federal tax liabilities by accepting less than full payment. This is what is known as an offer-in-compromise. By making an offer-in-compromise, you agree to pay less than the full amount of the taxes owed by you. The IRS has the discretion to accept less than the full amount of taxed owed by you based upon doubt as to your liability (whether you actually owe the taxes) or based upon collectibility (you do not have the resources to pay the amount owed).

If there is no doubt about your liability or collectibility, but an exceptional circumstance exists, then the IRS may still consider an offer in compromise. To be eligible on this basis, you must demonstrate that collection of the tax will create an economic hardship or will be unfair and inequitable.


Currently-not-Collectible status means the taxpayer does not presently have the ability to pay their tax debts. The IRS uses this status to protect taxpayers from hardships that can be caused by collection activity. To qualify for Currently-not-Collectible status, your allowable expenses must exceed or come close to exceeding your income. The IRS will also consider your assets before placing your account into Currently-not-Collectible status.

Once your account in placed in Currently-not-Collectible status, the IRS will stop all collection activity including levies and garnishments. The IRS will send you an annual statement stating the amount of tax still owed. Your account will be reviewed periodically to determine if your financial situation has changed and whether you still qualify to be classified as Currently-not-Collectible.

While your account is in Currently-not-Collectible status, the IRS will continue to add interest and penalties but it will not try to collect the taxes from you. When your account is placed in Currently-not-Collectible status, you must continue to file your returns each year to remain eligible for the status.


Bankruptcy proceedings discharge certain taxes including federal income taxes. Federal income taxes can be discharged in a Chapter 7 bankruptcy proceeding. Many penalties and other assessments can be discharged through a Chapter 13 payment arrangement. Payroll tax liabilities cannot be discharged in bankruptcy.

Statute of Limitations

The IRS does not have forever to collect the money that you owe them. They cannot chase after you for the rest of your life. There is a 10 year statute of limitation for collecting tax (6 years for assessments of tax or levy made on or before November 5, 1990).

This 10 year period begins to run on the day after the date of assessment. The statute is extended for the period of time you have a Bankruptcy filed and pending. The statute is also extended during the time you have submitted an offer-in-compromise and are waiting for an approval. This 10 year statute of limitation can be extended by mutual agreement if the agreement is made within the 10 year period.

About The Author

Larry M. Weinstein, CPA, Certified Tax Resolution Specialist is the Director of the Nat'll Tax Practice for, and has developed a 7 Step Proprietary Process known as, the “Strategic IRS Tax Problem Resolution Process” and is the author of “The 7 Things You Must Know Before Solving Your IRS Problems-Learn How to Solve Your Problem as Quickly and Painlessly as Possible.”, a copy of which is available at the website.

If the IRS doesn't collect the full amount in the 10 year period, then the remaining balance on the account disappears forever. All collection activity by the IRS must stop at this time.

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Wednesday, January 21, 2009

Top 5 Tax Season Tips

January 6th, 2009 IRS launched the new tax filing seasons. IRS wants people to know that they are providing assistance to those who owe back taxes. The type of assistance range from postponement of collection actions, added flexibility for missed payments, to additional review for offers in compromise on home values. In addition, IRS made new features to their website to make it more user friendly.

Tips to keep in mind for the 2009 tax season.
  1. Start collecting the necessary paper work early. For complex filers, sort receipts by type and then sort each type by date.

    Common documents include
    1098-E Tax Reporting Information for Account (Student loans)
    1099-INT Interest Income statement ( Savings accounts)
    Tax Return from last year (for reference)
    W2 for all jobs.

    If you have not received your W2 by January 31, call your company. Other documents and statement may also be available on the internet, if you have online accounts.

  2. Save money by E -filing for free.

    Visit IRS.GOV for a list of companies. Typically, you can file free federal online tax preparation and e-file if your adjusted gross income is $56,000 or less and you are age 50 or younger. You must link to the company through the IRS site.

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Tuesday, January 20, 2009

10 New Tax Rules for 2008 Taxes

With each new year comes a new batch of tax rules and miscellaneous changes to the laws that taxpayers need to be aware of. There's no denying that the tax code in the United States is incredibly complex, and there are tons of changes. But here are some of the rule changes that are likely to affect the average consumer:

Recovery Rebate Credit – If you weren't eligible for an economic stimulus payment in 2008, you might still be able to get that money. The initial payments were based on your 2007 income, and if your income was too low or too high, you may have missed out. You can now use your 2008 income to collect, and the IRS is offering help in calculating whether you qualify.

AMT Exemption Increased – The Alternative Minimum Tax (AMT) is a law that was created to make sure high income earners didn't get out of paying income taxes. Now this rule is affecting more middle-income taxpayers, but the "bailout bill" upped the exemption amount for 2008 to spare more taxpayers from the AMT for one more year. The 2008 exemption amounts are $33,750 for individuals and $45,00 for married filing jointly. Don't worry if your income is around those figures, however. Those numbers are part of a much larger (and complex) calculation. You probably only need to worry about AMT if you're single and making more than $100,000, or married and making more than $175,000. (These are just rough guidelines, however. So if you're anywhere close to that range you should speak to a tax preparer.)

First Time Homebuyer Credit – If you bought your first home between April 9, 2008 and June 30, 2009, you might qualify for a new credit. Taxpayers can get up to $7,500 from the federal government, which has to be paid back over 15 years at a rate of $500 per year. It amounts to an interest-free loan from Uncle Sam that can help you get your first house. More on this credit can be found in this article.

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Monday, January 19, 2009

Bookkeeping Help: Your Trusted Partner In Lightening Bookkeeping Burden

There is no need to describe the importance of managing the financial aspect of every business as it gives any business the stride to climb the corporate ladder. On the contrary, it is also true that doing this work can be actually tiresome and time consuming as well. If you have got tired of managing financial and accounting records, bookkeeping help is the solution for all your accounting hassles. The bookkeeping help you get gives your business ample scope to grow faster as it saves your hard earned money and human resource.

Bookkeeping help from hired bookkeeping service providers definitely come with a bunch of advantages for your business as it helps you in managing your financial and accounting records efficiently. It not only makes your accounting hassle free but also monitors all day-to-day, monthly and annual monetary transactions. The moment you hire a bookkeeping help provider you are free from tensions of bookkeeping as they are better in taking care of your accounting records. They cannot even afford to miss a single entry as it can affect the growth of your organization.

It is simply a sensible decision to hire bookkeeping help as after that you will be able to pay more attention to those issues that are ignored due to your busy schedule. Answerability of making accurate transactions will be on them so there are few chances of making mistakes so it is sure that statements that they make will be correct.

Selecting a firm that provides bookkeeping help is as important a decision as maintaining financial records, as accounting data is one of the most confidential records. The first thing that one should keep in mind while hiring a bookkeeping outsourcing service is the authenticity and accountability of that firm. Every company likes to hire a firm which has a good track record and professionals with genuine qualification. Firm which you are hiring must have professionals with genuine qualification. Hire a bookkeeping help only if you are satisfied with its authenticity any reliability once you are satisfied then only the task of handling sensitive financial data can be handed over to firm. Bookkeeping outsourcing is giving wonderful results and that is why it has been included in the key strategy of a company. Bookkeeping outsourcing can be your trusted partner in maintaining and expanding profits.

Bookkeeping outsourcing has become a vital part of many businesses due to its accountability and efficiency. You can maintain, update and change transactions and can also retrieve them as and whenever you need. Bookkeeping help covers a wide range of financial activities right from data entry, single entry commercial bookkeeping and tax filing.

Financial records and statements portray the position of any business. A well-managed profit and loss statement helps you in deciding what is beneficial for the company and what is non-beneficial. Bookkeeping help is therefore, a big help for organizations, as they not help in making properly maintained and processed accounting data in a short notice but also helps in making businesses able to find new resources and scopes of growth.

About Author : Alvis Brazma gives advice to business owners about how to manage their business efficiently without any hassles. To know more about Accounting outsourcing services,Small business accounting,Real estate accounting,Bookkeeping help visit this leading internet source:

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Sunday, January 18, 2009

Tax tip: Paying taxes for a prior year

SPOKANE, Wash. - Don't delay; file your prior year return now! The failure to file a federal tax return can be costly - whether you end up owing more or missing out on a refund.

If you owe taxes, a delay in filing may result in a failure-to-file penalty and interest charges. The longer you delay, the larger these charges grow.

If you are due a refund and don't file you could lose your refund. There is no penalty for failure to file if you are due a refund. However, you cannot obtain a refund without filing a tax return. If you wait too long to file, you may risk losing the refund altogether. The deadline for claiming refunds is generally three years after the return due date.

There are several reasons taxpayers don't file their taxes. Perhaps you didn't know you were required to file. Maybe, you just keep putting it off or simply forgot. Whatever the reason, it's best to file your return as soon as possible. If you need help, even with a late return, the IRS is ready to assist you.

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Thursday, January 15, 2009

Advantage of Outsourcing your Bookkeeping to Professional BookKeepers

What is a role of a bookkeeper in your organisation :

BOOKKEEPERS keep complete, up-to-date, and accurate records of accounts and financial arrangements. Bookkeepers verify and enter information into journals and ledgers or into a computer. They periodically balance the books and compile reports and financial statements. Bookkeepers also receive, record, bank and pay out cash. They balance checkbooks with monthly bank statements. They may calculate employee wages from plant records or time cards and issue payroll checks. Some of the other work they may do includes posting accounts receivable and payable, prepare and make bank deposits, record payrolls, maintain inventory records, purchase supplies, prepare purchase orders and do expense reports. Bookkeepers may also make schedules, sort documents, and file bills. These type of jobs are found in every industry and may have various job titles, such as accounts payable clerk, accounts receivable clerk or assistant bookkeeper.

Cost of a Bookkeeper :

The pay for these jobs depends upon experience, clerical skills, the level of responsibility and the job location. Beginning salaries go from minimum wage to $ 15 per hour. Experienced Bookkeeper can make $ 20 an hour. After having worked for three years with the same firm, a Bookkeeper can earn at $ 25 per hour.

A Bookkeepers usually work 40 hours a week; sometimes it may be necessary to work overtime. Some employers have fringe benefits such as paid vacations and sick leave, life and health insurance, and bonuses. Other benefits that the employer may include are participation in a credit union, or retirement and profit sharing plans.

Advantage of outsourcing Bookkeeping work to a professional bookkeeper :

There are several distinct advantages to outsourcing your bookkeeping functions. First and foremost is saving money. You get what you pay for and if you don't pay for quality than you won't have quality service. However, you can save money by outsourcing because you won't be paying for employer payroll tax expense, workman's compensation and general liability insurances, vacation time, sick time, health insurance and other benefits a good full time bookkeeper will expect from his/her employer. Just remember, however, that these costs will be built into the consultant's hourly rate and their fee will reflect these costs. Any bookkeeping consultant who has not taken these costs into consideration is not a bookkeeper you want - if they don't know enough to include these costs into their fees, then they don't know enough to be a help to your business. You should expect to pay at least three times what you would pay an experienced full charge bookkeeper.

And just how do you save money by paying three times the amount you would pay an employee? Well, let's see. There will be no recruiting, interviewing and training costs for start. And if you should find yourself unhappy with the services there will be no additional recruiting, interviewing and training to replace your bookkeeper. Also, you will not have to be concerned about law suits such as sexual harassment, unlawful firing, age discrimination, sexist, etc. Or an increase in your unemployment rates because you laid off an employee that you really wanted to fire but had no lawful cause to do so. So right away we have less time and money spent and potentially less hassle if things don't go well.

And of course you will not be paying workman's compensation and general liability insurance premiums. Also any worthy bookkeeper will expect at least two weeks vacation, coverage for sick time, health and dental insurance and even perhaps more benefits.

Most professional bookkeepers will have their own offices saving you space within your office. So you will not be buying that extra desk, calculator, computer and computer software. Your bookkeeper will be providing all of that as part of his/her fee. No software updates, computer maintenance, training costs, etc. Of course should you prefer to have your computerized bookkeeping records available to you at your office, a small investment in software installed on your computer makes this possible. Also no office supplies to be paid for. You will be amazed at just how much pens, pencils, and paper can be used by a bookkeeper. Your consultant bookkeeper will either ask you to drop off the work at their office, will pick it up at your office or some may even offer remote bookkeeping service. And by having your bookkeeping done off site, your bookkeeper will be able to work more efficiently and accurately because her/his office will most likely offer less distractions than your busy office. All of this is saving you money.

And the best reason for outsourcing is that you control the amount of money spent on bookkeeping. What I mean by this is that the person you hire to do your bookkeeping will be doing just that - not answering the phone, dealing with drop-bys, chatting to other employees, etc. Also you can start with just a few hours a month and add on when you need to and then adjust downward again should it be necessary. Can you imagine finding an employee to start with only four hours a month, then asking them to put in 20 hours a week for awhile and then back down to four hours a month again. I don't think you would keep them for very long, but a free lance bookkeeper is able to work around these variables and even more importantly expects to work with flexible schedules.

About the Author:
Mr.Bhaskar Thakkar is a qualified Chartered Accountant and professional bookkeeper from India. He is a president of M/s. BT Associates, Chartered Accountants. Visit,. A division of said firm provides various outsourcing solutions please visit, to get more details.

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Tuesday, January 13, 2009

Free Accounting Software Tips

Most of the free accounting software are not high end accounting software, but simple, easy to use accounting software. These free software cater to the needs of home users or small business houses. Basically they focus primarily on the management of simple accounting. In fact with a free accounting software you can easily perform the tasks performed by a paid accounting software.

All these lead us to the question whether you should try free accounting software or for that matter download it for permanent use. More importantly- what you should look for and where you should look for free accounting software? Here are some tips.

It has been recently seen that a growing number of companies are developing and providing free accounting software for promoting their products and other marketing campaigns. Keep your eyes open to take advantage of such opportunities.

As there are free products, there are scams also. There are some not so honest sites which advertise that they are providing free accounting software for you to download. You simply need to fill up a registration form, state your personal information and blurt out your credit card number. Take guard against such sites. In fact, a legitimate free site would not ask for such information from you.

It is always better to go for a trail version, when you are considering to download a free accounting software. It is a great way to see whether it meets all your accounting needs or not. The best thing is that you do not have to commit anything. If you think, it is not great for your business, simply discard it and go for another demo version until you find the right one.

From all the above talk, you can safely assume that you can have the best accounting software with great features for free. Different functionalities are added to the existing free download-able software by varying manufacturers. Just browse through the different versions as to find out the perfect accounting software compatible with your business.

You can find free accounting software; which are intuitive, easy to use and robust. It is also possible that you can easily download without any complications. Free Accounting Software support also can be downloaded free from the net with free accounting software.

So using free accounting software is quite easy as well as practical today.

About The Author, Ashish Jain

The author writes about a number of different topics. For more information on accounting software visit

Monday, January 12, 2009

Small Business: Hire out tax prep to focus on the bigger issues

Taking care of clients has to be the top priority

NEW YORK -- The beginning of the year means small-business owners need to start thinking about income tax returns. But with the economy in tatters, they may need to focus more on bringing in revenue than sorting through receipts.

The recession is making many owners re-examine their priorities. Many may realize that chores they've handled themselves in the past like taxes or keeping the company books are better off turned over to someone else.

"It really does detract from the business and what you really need to be focusing on," said Laura Grimmer, president of New York-based Articulate Communications, a public relations firm.

Business owners who choose to spend their time on taxes are "missing an opportunity to take care of the three things that are going to keep the bus going -- existing clients, their employees and new business," Grimmer said

Kristen Collins, who owns KMC Partners, a public relations firm based in Boston, has a business manager and an accountant to care for her company's finances. So, this tax season, she said, "I'll service my existing clients, which has to be my top priority right now."

Collins said, "I am like many small businesses -- my business took a hit" in the third quarter. "When I look ahead to 2009, I can't forecast it. The best thing we can do is to retain clients and retain them through great service."

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Sunday, January 11, 2009

Stop collecting disputed tax demand

It is an open secret that the government fixes revenue collection targets for its tax officials. The targets are often based on the collections made in the earlier year without any regard to the estimated actual profits to be currently made by the businessmen and industrialists.

The tax officers are so obsessed with their targets that they do not hesitate to take coercive measures to collect more and more amount from the assessees. It will be wrong to blame the officers because their promotion, placement, transfer etc. is shown to be dependent upon the collection of taxes under their charge.

A situation often arises when the income-tax department raises a demand of tax from a foreign enterprise but the foreign enterprise does not agree with the department and decides to contest the case before higher authorities. In such a situation, the option is either to pay the disputed demand or obtain a stay till appellate proceedings are over.

The above situation, which on the surface, appears to be simple and logical, in fact, gets highly complicated when applied in practical parlance. In India, completion of tax assessments, including appellate proceedings, usually takes 3 to 5 years up to the tribunal stage and another 10 to 15 years if the matter goes to high court and Supreme Court.

If the foreign company pays the disputed demand, then, upon success in appellate proceedings, it will get a refund along with interest. But, in the process, the foreign company will remain involved in litigation in India in all these years. This creates practical difficulties, particularly in those cases where the foreign company goes back from India after completing its work here. There is, therefore, no dearth of cases when the refunds due to foreign companies remain unclaimed.

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Friday, January 9, 2009

Tax Return Preparation - Some Useful Tips To Help

Now that the festive season is out of the way, you can no longer put off completing your tax return. The 31st January is not just the deadline for filing online tax returns and paying the balance of tax owed but also a good chance to review your overall tax affairs.

All self assessment taxpayers must pay HMRC the balance of any tax owed by 31st January, or risk being charged daily interest after the deadline (currently at 5.5%). Taxpayers may also be asked to make their first 'payment on account' for the current tax year.

Preparation is Key

Leonie Kerswill, tax partner at PricewaterhouseCoopers LLP, gave the following advice:

“You probably find that getting your tax return in tends to slip down the priority list over the festive period but after the expense of Christmas it would be a shame to incur a £100 fine for not getting your tax return in on time, so the sooner you get the form in the better.

“Preparation is key so get your information together before you start and if you need help, ask HMRC or a qualified tax adviser. And do remember that you have to pay your tax – plus any payment on account due – it’s not just about getting the form in.

“The eve of the new year is also a great time to think about some New Year tax resolutions – such as checking tax codes, thinking about tax efficient investments and benefits, inheritance tax planning and generally that you'll take tax seriously!”

Top Tax Return Tips

Here are PwC's top tips for completing your tax return this year:

  • read all the questions carefully;
  • get all relevant paperwork together – such as P60s and P11Ds - before starting;
  • make sure the benefits listed tie up to the P11D (Benefits Statement) and that appropriate expense claims are made;
  • remember that not all benefits are taxable. Although State Pensions and Job Seekers Allowance are, benefits such as Child Benefit are not;
  • include personal pension contributions from post tax earnings;
  • list Gift Aid payments and any other charitable donations and enter the amounts that were actually given;
  • make sure the bank or building society interest received plus the tax that has been deducted (usually 20%) add up to the gross amount;
  • register for the HMRC online filing system by the 22 January to ensure the activation pin is sent out in time.
  • miss out any questions that are set;
  • enter income from ISAs or PEPs;
  • leave it until the last minute - mistakes are more likely to be made if the process is rushed. The online filing system also gets very busy during the last two weeks before the deadline;
  • include pension contributions to an employer’s pension plan deducted directly from pre tax earnings;
  • forget to complete all the relevant supplementary pages eg employment or land and property sheets;
  • forget to tick the box if a repayment is due and include the bank account details where the money should be sent to;
  • forget that any tax owed needs to be paid by 31 January – it’s not just a case of getting the form in.
Source :

Thursday, January 8, 2009

Online Bookkeeping Courses - Why Study Bookkeeping Diploma?

Most small businesses don't require a certified public accountant for their day to day accounting operations, including payroll, benefits enrollment and bookkeeping. Whether you're interested in eventually earning an accounting degree at the bachelor s level, becoming a CPA or taking the path of least resistance toward a rewarding, career building educational tract in the field, an online bookkeeping course is an exceptional place to begin.

The benefits of an online bookkeeping course that leads to a certificate or diploma are many, including focused training, short term commitment and the ability to gain the skill sets necessary for finding employment as a bookkeeping professional. An online bookkeeping course can be completed in as little as 3 to 6 months and gives you the flexibility to fit your educational pursuits into your existing schedule.

Courses in most of the online bookkeeping tracts available through the fully accredited colleges and universities featured on include basic bookkeeping, accounts payable, accounts receivable, ledger maintenance, methods of inventory accounting and much more. In a short time, you can gain the understanding necessary to embark on an entry level career with great earning potential and the opportunity for advancement.

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Wednesday, January 7, 2009

Online Book Keeping Services

New business start ups mean increased need for book keeping services, since accounting is mandatory. Small businesses do not want to waste the time and energy spent on extensive and complicated paper work so they seek the services of book keeping agencies.

Book Keeping Services Online
Some of the services offered by book keeping services online are, reviewing existing bookkeeping systems to recommend the customer's needs, inputting new information, running financial management statements monthly, quarterly or yearly, and preparing payroll records of state and federal withholding reports. It also includes management report creation, assisting tax preparation, invoice or other office data management tasks assistance, word processing, data entry and bulk mailing, paying salaries, coordinating and handling accounts receivable and payable, balancing ledgers and check books, and organizing financial information required for business plans, loan proposals, and cash flow statements.

Book keeping services online are popular, since businesses can offload all the arduous tasks of managing and maintaining financial records, yet not lose access to important details. Traditional bookkeepers require that the records be submitted to them. This is not so with online book keeping services. Their web based filing systems allow access 24 hours a day. You just send the bills, the invoices and the expenses and everything is filed and maintained by them. They will maintain the records, keeping them up to date for convenient viewing.

Some book keeping services online also help in administering taxes. They even calculate the tax due on the invoices, track the VAT owing to Customs, excise on your web site, and complete the quarterly VAT return where applicable. As the financial records are constantly updated informed financial decisions can be made with ease. These web sites are secure using SSL encryption, which makes them safe.

Many businesses prefer bookkeeping services online for several reasons. There is no need to install bookkeeping software, train personnel to use them, and waste money in maintaining them. Another problem with the book keeping software is that you need to keep updating it yearly. Records are always available and it eliminates paying an accountant hourly rates to do your book keeping, as these services charge a fixed monthly fee. All you need is a computer with access to the Internet and a fax machine.

Book keeping services online are fast compared to traditional bookkeepers and reliable. You can monitor and know exactly how much work is being done on a daily basis and since you get to see all records maintained well, you may not get any rude shocks which are inevitable should you use a book keeper to maintain your books at the last minute. These services are hassle free and convenient and they save time, money and energy, which can be used to help the business achieve success.

About The Author, bizavings

David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their web site

Tuesday, January 6, 2009

Minimize your tax liability exposure

Consider these three simple areas that can make a tremendous difference in your tax liability exposure.

Failure to keep books.

If you do things correctly, your bookkeeping records will clearly reflect the earnings and expenses of your business. This makes for easy and accurate tax preparation as well as appropriate support in the event of a tax audit.

If this isn't motive enough, think about this. In the case of an IRS audit, if your business does not have adequate financial records, they are in their right to "approximate" your income based on industry standards and are under no obligation to assume any legitimate expenses to offset your revenue — thus all profit, all taxable.

If you don't know how to keep records for your business, go to the IRS Web site for small business record keeping publications. You can outsource your recordkeeping to a bookkeeping service or take a class and learn how to manage the financial records of your business. There is no time like the present.

Falling behind on tax payments.

Self-employed individuals do not have the benefit of someone else being responsible for tax withholdings. You are your employer.

As an employee, your employer makes these "deposits" for you. Each pay period, taxes are taken from you check and remitted by your employer, including their portion.

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Monday, January 5, 2009

Top 10 tax tips for 2009

For 2009, here are my 10 resolutions for saving more taxes:

Resolution #1: Open a TFSA. The new tax-free savings account, launched Jan. 1, is the ideal place to put up to $5,000 of savings and earn tax-free income and/or gains for life. Any withdrawals are not taxed, do not negatively affect eligibility for government-tested benefits and can be re-contributed the following calendar year.

Resolution #2: Maximize RRSP contributions. The RRSP limit for 2009 is the lesser of 18% of 2008 earned income or $21,000. Get a head start on your 2009 contribution today.

Resolution #3: Set up a spousal RRSP. The primary benefit of a spousal RRSP is that funds withdrawn can generally be taxed in the hands of the (hopefully) lower-income spouse.

Resolution #4: Earn tax-efficient investment income. For those who have maxed out their RRSP and TFSA contributions, consider tax-efficient investment income outside of these tax-sheltered plans by investing in Canadian dividends, which are eligible for the dividend tax credit, and capital gains, which are only half-taxable.

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Sunday, January 4, 2009

The Importance of Accounting

Accounting can seem a dreadfully boring subject to some, but it gets its moment in the sun whenever there is a financial crisis . . . remember Enron? This time around is no exception. During the panic of September, some people were calling for a suspension of mark-to-market accounting, and while they did not get what they wanted, they succeeded in inserting a provision in the first big bailout bill to study the relationship between mark-to-market accounting and the financial crisis.

A brief, high-level explanation of the dispute: Under mark-to-market accounting, assets on your balance sheet have to be valued at their current market values. So if you have $10 million worth of stock in Microsoft, but that stock falls to $5 million, you have to write it down on your balance sheet and take a $5 million loss on your income statement. The criticism was that mark-to-market was forcing financial institutions to take severe writedowns on assets whose market values had fallen precipitously, not because of their inherent value, but because nobody was buying these assets - think CDOs - and that banks were becoming insolvent because of an accounting technicality. Under this view, banks should be able to keep these assets at their “true” long-term values, instead of having to take writedowns due to short-term market fluctuations.

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Friday, January 2, 2009


  1. Do not throw away cancelled cheques.
  2. Either file a copy of the sales invoice numerically or by customer, whichever is more logical.
  3. Keep a file of all invoices and bills that are paid.
  4. Perform a bank reconciliation each month.
  5. Periodically, count the inventory on hand.
  6. Review accounts receivable on a regular basis and at year-end; determine those that are uncollectible.
  7. Register for a business number (for GST and payroll taxes).
  8. Discuss your financial statements with your accountant.
  9. Remember to keep your business affairs separate from your personal affairs. OPEN a separate chequing account (very important).
  10. Pay all transactions by cheque if possible; it is easier to keep track of cheques.
  11. Detail deposit slips and keep a copy for your records.
  12. If your books don't balance, try dividing the amount (that your out) by nine.
  13. If your business is not as profitable as you expected, don't be afraid to ask for assistance.

Source :

Thursday, January 1, 2009

Accounting Informational Systems

Just several years before, people, whose work consisted in conducting the financial account of organization, were engaged in much more tedious work than now. Now, these workers are helped by machines – computers, the computer programs are specially created for the conducting of such kind of work. Some people can say that before also existed such «machines», but do you remember how much nerves it cost for you just to reprint this miserable payment because of casual jamming of the keys?! Before, work which was conducting during the whole day by several workers, computer makes immediately, you just need to enter information and all is done. So what does it mean actually«It is the golden age for small and middle-size business»? It means that for the conducting of business, businessmen don’t necessary need to hire a lot of skilled employees, they can simply purchase good computer with specialized, for their type of business software. In this way owners of the business will save money (decreasing amount of money spending on salaries and production) and produce more free time in oder to do something else for earning more money.

Now, I would like to turn your attention to an accounting information system and explain what it is. So, accounting information system is database which emits bookkeeper to meet his engagements. Bookkeeper’s engagements means record keeping in accordance with the legislation. Legislation, unfortunately, compels Ukrainian bookkeeper to conduct accounts of two types: tax, book-keeping.

For the conducting of book-keeping and tax accounts a book-keeper needs information. Namely: agreements, date of conclusion, sum, terms of payment, date of fulfilling a commitment.

It is principally significant that an accountant will make actions only having on hands an agreement or writing active document about transferring of the money to a supplier or the extract of an account to a buyer. For posting, i.e. reflectioning in an account, on the accounts of record-keeping, for example - receiving materials, an accountant can with help of a computer network get information from a storage which is, maybe, hundreds or thousands kilometers away, that materials are acted on a storage. So for accountant, regard to Accounting IS, for him it is not necessary to wait till papers will be brought.

Development of computer technologies influenced very much on the whole world not speaking just about separate part - accountings information systems. With development of computers, develops software under each type of computers. For example about 5 years before accountants prepared the annual accounting in OS - DOS that was an innovation for many and a little bit difficult because far not all people could afford a computer, and work in DOS required from a user certain skills of work in it. Nowadays appeared more powerful computers as a result appeared other operating systems, accordingly other programs. Today, practically everybody is able to use a modern computer, and the use of accounting’s programs became simple and clear for the people who work in this sphere.

Creation of machines able to get and pass the enormous volume of information influenced in sharp reduction of time for treatment of information and terms of making a decision, reduction of amount of people working for an enterprise.

Before on storages worked a lot of people which wrote down the name, amount, cost of got and given out materials in the paper cards of account. Then they made themselves «Financial report after several month several year». In this gaps were put information about arrival and expense of materials.

In conclusion it is obvious to point out that today, each business conducts all this work with help of programs: informational, accounting and etc. Technique development allowed to create such structures of bookkeeping programs which allow to take into account everything to the little things in the mode of the real times. If some years before for treatment of accounting payments people required a month, than now, if you have all required documents, acts, payments it is matter of two days. Only regard to development of technique’s «opportunities» - we can take into account and process more large amounts of information. Development of technique results in possibility of creation of more difficult (I mean detailer) informational systems, including book-keeping, complicating (going into a details) the structure of the informative systems of accountant, and simplifying book-keeper’s life.


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