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Viewing entries tagged with 'Accounting'
Remember to Accrue Revenue and Expenses In QuickBooks at Year-End
Accrual based businesses typically need to make some adjustments before closing their books at year-end. Different businesses make different decisions regarding exactly what to accrue, but whenever an expense is incurred in one year for which the benefit won't be received until the next year, or revenue is received in one year for products or services that won't be delivered until the next year, then it is worth considing whether or not to make an accrual adjustment.
Time to Issue 1099s for CY2008
People often think of 1099s as being essentially a W-2 for independent contractors. While it is true that 1099s are the forms given to independent contractors showing the income they earned during the year, 1099s are also used for many other things. For a list of the types of payments for which 1099s are necessary, see Time to Issue 1099s.
Independent Contractors Earning Less Than $600
Businesses and individuals that pay an independent contractor $600 or more are required to provide that independent contractor with a FORM 1099-MISC reporting the income paid. They are not, however, required to provide a FORM 1099-MISC when they pay the independent contractor less than $600. Because of this, many independent contractors falsely assume that this income is not reportable.
IRS Toll-Free Numbers and Hotlines
The IRS has many different toll-free numbers and hotlines to help you during the filing season and beyond. Use the chart below to figure out which IRS phone number you should call as starting in the right department is sure to save you time.
Reduce Taxable Income By Writing off Bad Debt
Remember to write off your bad debt at year end as a means of reducing your taxable income. I recommend going through all open invoices annually in January to see if there are any you don't expect to be paid on. Simply run an Accounts Receivable Aging Detail report (in QuickBooks, select Customers & Receivables from the Reports menu, and then select A/R Aging Detail) and look at all old invoices.
Small Business Tax Calendar for January 2009
The following list of January tax dates is intended to be useful for accountants, bookkeepers and small business owners:
Download a Free Small Business Tax Calendar from the IRS
The IRS 2009 tax calendar for small businesses and self-employed people is filled with useful information on general business tax issues, IRS and SSA customer assistance, electronic filing and paying options, retirement plans, business publications and forms, common tax filing dates, and more. Download it from the IRS's website.
Are Office Holiday Parties Deductible?
Occasional parties for the purpose of employee welfare are fully deductible to the business. They are not subject to the 50% limit on meals and entertainment. In addition, they are considered to be de minimis fringe benefits and, therefore, are nontaxable to employees. Therefore, have an office holiday party in December, an office golf outing in the summer, or an office cocktail party to celebrate spring. Better yet, have all three. The odds are that if you can justify the expense as being good for the business, then you can probably justify the deduction as well.
IRS Sets First Quarter 2009 Interest Rates
The IRS recently announced that they are lowering interest rates by 1% effective January 1, 2009. Therefore, beginning January 1st, 2009, the interest rates will be:
Are Christmas Gifts to Employees Taxable?
Many companies give small gifts to their employees at Christmas time. Gifts such as fruit baskets, entertainment tickets, and other small items are generally considered de minimis fringe benefits and are nontaxable. Cash gifts, on the other hand, are considered wages and are subject to all taxes and withholdings. In addition, gift certificates are treated as cash. Therefore, if you want to give your employees turkeys at Christmas time, give them the actual turkeys (or a certificate to pick up a turkey). Do not give them a $15 gift certificate to the grocery store.
