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Small Business Tax Calendar for August 2008
Following is a list of August dates that small business owners, bookkeepers and accountants should be aware of:
Receiving Payment Against an Invoice in QuickBooks
To record a payment received against an open invoice in QuickBooks, make sure to use the Receive Payments window. New QuickBooks users often make the mistake of recording the payment directly into the check register, which results in erroneous reports (P&L is wrong because income is counted twice - once when the invoice was created and again when the payment was received, AR reports will be incorrect) and messy books (an invoice is left open that you are no longer awaiting payment on). Therefore, if you use invoices in QuickBooks, then remember to use the Receive Payments window.
Open the Receive Payments window from the Customer menu.
Set Up an S Corporation to Reduce Self-Employment Taxes
Small business owners should consider whether or not it makes sense to set up an S-Corporation as a way of reducing total taxes paid. If your business currently operates as an LLC, a partnership or a sole proprietorship, then your profits are subject to self-employment taxes. As an S Corporation, only your salary is subject to self-employment taxes. Here are the details:
Applying Credits to Invoices in QuickBooks
When a customer has a credit balance because they overpaid on a prior invoice or because you created a credit memo for some other reason, you can apply this credit balance to new invoices when you create them or when you receive payment against them. Instructions for both follow:
Thoughts About the Federal Minimum Wage Rate Increase
The federal minimum wage rate increased from $5.85 to $6.55 per hour today, a 12% increase. This is the second of three scheduled increases. The first increase occurred a year ago today and raised the federal minimum wage from $5.15 to $5.85 per hour. The next increase, which will raise the federal minimum wage to $7.25 per hour, takes effect on July 24, 2009. All totaled, these hikes result in a federal minimum wage rate increase of $2.10 (from $5.15 to $7.25), or 41%, in just two years. Here are a couple of thoughts about this:
SSA Adds New Retirement Calculator to its Website
The Social Security Administration just added an easy to use retirement estimator to its website. The retirement estimator makes it easy to obtain an estimate of the monthly benefit you will receive when you retire. You simply input your name, social security number, and date and place of birth, and then input last years earnings (prior years earnings come from the Social Security database).
Deciding Whether Or Not To Use Invoices in QuickBooks
As a general rule, if you don't receive payment in full from your customers at the time you deliver your product or service, then you should probably use invoices. The main reason is that using invoices helps you keep track of exactly how much money your customers owe you. However, there are many other reasons to consider using invoices:
Creating Invoices in QuickBooks
If you don't receive payment at the time you make a sale, then you should probably use invoices in QuickBooks. Doing so will make it easy to keep track of which customers owe you money and how much they owe you. Instructions for creating invoices in QuickBooks follow:
Open the invoice window by clicking on Create Invoices in the Customer menu.
Federal Minimum Wage Rate to Increase
The federal minimum wage rate will increase on July 24th from $5.85/hour to $6.55/hour. As employers are required to pay the higher of the federal and state minimum wage, only employers in states with a minimum wage lower than $6.55 will be affected by this. The federal tipped minimum wage, currently $2.13/hour, is not changing.
QuickBooks Tutorials: Historical Transactions & Writing and Printing Checks
Recently added QuickBooks tutorials on our site explain how to write and print checks in QuickBooks and how to enter historical transactions. As with the other QuickBooks tutorials on our site, these QuickBooks tutorials include specific instructions, screen shots and some thoughts.
The QuickBooks tutorials added over the last couple of weeks include:
