Just a few short weeks and the film, Lake Effects, will begin production at Smith Mountain Lake. I am so excited for the producer and my friend, Sara Elizabeth Timmins! She has worked hard to see her vision become a reality. Little did I know when I met Sara Elizabeth a year ago that I would have a dream come true! I am a big movie buff and I often sit through the credits at the end of movies. A secret desire of mine was to see my name in the accounting credits for a movie (can you say “geek”?), but I couldn’t fathom how that would happen. I am thrilled to be a part of the team at Life Out Loud Films, which also includes Erin Bukowski, CPA. Erin and I are working together to oversee the necessary financial reporting.
Being a movie production accountant is challenging and the entire month of October is going to be a busy one for me. I am learning about movie budgets, specialized payroll requirements, and the Screen Actors Guild. I have quite the library on the topic of movie production and accounting. I hope that more movie production accounting is in my future. I like the challenge, the fast pace, and of course, the potential opportunity to meet some of America’s “royalty.”
Check out Sara Elizabeth’s website for updates on the movie at http://www.lifeoutloudfilms.com/Services.html
The recently passed Hiring Incentives to Restore Employment Act (HIRE) gives employers two types of tax relief. Employers can receive an exemption from paying for hiring employees who meet a particular threshold for unemployment, and then earn a credit for retaining employees for a particular time. In other words, you can save money while getting the help you need to get the job done.
The tax exemption is for hiring unemployed workers. Employees that would qualify the employer for the tax exemption have worked less than 40 hours in the 60 days preceding the hire date. The employer would receive an exemption from the employer’s 6.2 percent share of social security tax on wages paid. For full information regarding this type of exemption, reference the following link – http://tinyurl.com/2awlt66
The tax credit applies to employers who retain the employees hired under HIRE for at least 52 weeks. The amount of the credit is the lesser of $1,000 or 6.2 percent of wages (as defined for income tax withholding purposes) paid by the employer to the retained qualified employee during the 52 consecutive week period. For full information regarding this type of exemption, reference the following link – http://tinyurl.com/24xs9o7
For full information, you can go to http://tinyurl.com/y5fqj8d .
If you have additional questions, contact your favorite accountant. That’s me, of course!
Tax season is here once again and with it are many changes to the tax law. Highlights of the new tax provisions include homebuyer credits, unemployment credits, education credits, and health coverage credits.
The homebuyer credit was expanded and extended on November 6, 2009. The provisions according to the IRS website (http://tiny.cc/homebuyer250) include:
An eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.
The new law also:
- Authorizes the credit for long-time homeowners buying a replacement principal residence.
- Raises the income limitations for homeowners claiming the credit.
- The 2009 first-time homebuyer credit increased to $8000
Additional provisions for individual tax payers include (http://tiny.cc/IRS568):
Money Back for New Vehicle Purchases. Taxpayers who buy certain new vehicles in 2009 can deduct the state and local sales tax they paid or other taxes and fees they paid in states with no sales tax.
Up to $2,400 in Unemployment Benefits Tax Free in 2009.
Health Coverage Tax Credit. The credit increases from 65 percent to 80 percent of qualified health insurance premiums, and more people are eligible.
Education benefits. The new American Opportunity Credit and enhanced benefits for 529 College Savings Plans help families and students find ways to pay for college.
Visit the IRS website for a complete list and explanation of new provisions for both individuals and businesses.
An entourage is a group of associates that surrounds us. A well-crafted entourage will not only add flavor to your business and personal life, but contribute to your success in both areas. An entourage is different from a clique, which is an exclusive group of people. A clique is closed and doesn’t allow for the variety that a flowing entourage does. I became intrigued by the idea of an entourage after reading a Daily Tip about cultivating an entourage on the social network site, Ladies Who Launch. I have been thinking about who makes up an excellent entourage.
I am going to call mine the “Goddess Entourage.” My Goddess Entourage includes:
1. Goddess History. Goddess History is important in my circle because sometimes I need help being grounded. I have known my Goddess History since childhood. She has seen the good times and the bad. She understands how I became the person I am today. She reminds me of how far I have come and she celebrates the triumphs with me in a way no one else can.
2. Goddess Heart. My Goddess Heart listens to me without judgment. I value how she quietly listens to my ramblings, pieces together the heart of the matter, and returns sage advice that is not tainted with harshness or prejudice. She is kind and soothing like a balm. She is trustworthy and worth her weight in gold.
3. Goddess Truth. Goddess Truth is very blunt and she doesn’t hesitate to point out changes I need to make whether it is business or personal dealings. Her words sting occasionally, but she is motivated out of love for me and I can’t fault that.
4. Goddess Fun. I have to confess Goddess Fun is my favorite Goddess (and yours too!). She is someone I can let my hair down with completely. Goddess Fun stays mostly in my personal zone, but we do have occasion to do business. We are electric together and there is never a dull moment. We bring out the joy and happiness in each other to an extreme and I really like that heady feeling.
5. Goddess Business. Goddess Business is my more serious goddess. She offers excellent advice in how to handle certain business matters. She has a way of seeing a situation that is invaluable when I cannot see the forest for the trees. She tempers my artistic right-brain with her no-nonsense left-brain.
6. Goddess Art. My Goddess Art introduces me to the world of possibilities. With her I explore art, music, fashion, and everything in between. We have existential conversations and we dwell in the realms of dreams and ‘what ifs’. She encourages me to write, draw, paint and most importantly–to explore.
7. Goddess School. Goddess School has been with me through the grueling process of adult education. She understands the stress and pressures that full-time school and work brings. We help each other with assignments or listen to griping about team projects. She is a goddess in other ways too, but she shines in this area.
8. Goddess Network. Goddess Network is a sun in my business universe. She knows a lot of people and she doesn’t hesitate to introduce me around. She has helped me to make a lot of connections and she has shown me how to be an effective networker. She rocks my business world!
9. Goddess Health. My Goddess Health reminds me regularly that I have to take care of myself. She pushes me to exercise and diet. She makes sure I get a regular massage and she takes care of both my body and spirit in the process.
10. Goddess Sister. My Goddess Sister is a relative. She and I have so much in common and we are able to be authentic with each other without fear. She is someone I turn to on a regular basis…for no other reason than I enjoy being with her. She is a rock in the sea of my life.
You may recognize yourself in one of my Goddess Entourage. Some of my Goddesses trade tiaras and switch roles from time to time, but the essence of my entourage stays the same. I love that I have such strong, beautiful women in my life. I value each and every one of them. I am grateful to have such support in both my personal and business life. When we work together for each others successes we are unstoppable!
Who forms your Goddess Entourage?
In February 2009, the American Recovery and Reinvestment Act (ARRA) extended some special tax breaks to small businesses. Businesses need to act fast to take advantage of several of the tax breaks. The bonus depreciation and increased section 179 deduction are valid through the end of 2009. The bonus depreciation is 50% of the cost of new capital expenditures; which allows for faster expense recovery. The section 179 deduction was increased to $250,000 and enables a small business to deduct the cost of machinery, qualifying vehicles, furniture, and computer equipment. If you have been holding off making purchases of new equipment, now is the time to do so!
The second provision that can benefit small businesses involves the net operating loss carryback. The carryback has been expanded to five years from two years for small businesses. The deadline for this special provision is September 15, 2009, for small corporations with a calendar tax year and October 15, 2009, for individuals. It can pay to have a tax expert review your situation and see if tax refunds may be retrieved from prior years by carrying back a 2008 loss.
The third provision is the exclusion of a gain on the sale of certain small business stocks. An exclusion of 75 percent of the gain upon the sale of qualified small business stock is available. The exclusion only applies to qualified stocks purchased between February 17, 2009, and January 1, 2011. The stock must be held for five years to be eligible.
A fourth provision modifies the required estimated tax payments that small business owners may need to make. The estimated tax payments can equal 90 percent of either their 2009 or 2008 tax (whichever is smaller).
Another provision involves COBRA insurance. Employers that provide 65 percent of the COBRA premium to eligible former employees may claim a credit on the 941 quarterly payroll reports.
Other provisions involve discharge of business indebtedness, acceleration of certain corporate business credits, and the holding period for S corporation built-in gains.
Please see your tax professional to determine if you are eligible for any of these provisions and jump start your economic situation.
(Information obtained from the Internal Revenue Service Website)
As 2008 draws to a close, business owners have more on their mind than the holidays. Taxes and tax planning need to be given some thought before you ring in the new year. Early December is a good time to get accounting caught up and make some projections for the remainder of the year. If a business is new and does not have an accountant, now is a good time to find one. Your accountant can make recommendations on whether to purchase that new piece of equipment you want now or wait until January. Your accountant can also make suggestions on maximizing your expenses.
It is not too late for your accountant to do some tax planning for 2008. If you have not made any estimated tax payments, your accountant can determine if you need to make one or not and save you from paying unnecessary penalties and interest in 2009. Another reason to hire or touch base with your accountant now has to do with payroll.
If you prepare your own payroll tax reports throughout the year, you should consider having your accountant handle the fourth quarter payroll reports and W-2s. A lot of IRS and state tax notices can be avoided if steps are taken to make sure all the wages and taxes reported throughout the year tie into the final reports. Most business owners rely on software to generate the reports and put full trust that what has been printed from the software is correct. Unfortunately, that is not always the case and software is generally not dynamic enough to flag potential errors. In the long run, it can provide peace of mind and save money and many needless hours responding to notices if a professional processes your payroll reports at year end.
Allowing your accountant to get involved well before the taxes are due is always a wise decision. You will save money (and who doesn’t want to save money in this economy) and you will be able to have some quality time with your accountant before tax season makes that nearly impossible. I encourage you to contact your accountant or find a new accountant now before the year ends so you can leverage your budgeted accounting dollars for maximum use.
Choosing the best accounting software for your business can be a challenge with all the choices available today. Some software is industry-specific and quite costly. Other software packages promise to have you up and running in minutes without any bookkeeping or accounting experience necessary. Your accountant is generally the best resource to help you choose the software that will suit you and your business needs.
I have worked with both expensive industry-specific and out of the box accounting software. Both types of software have something in common—you should get an accounting professional to do the initial set up to ensure proper reporting of your financial information. Your accountant should also be able to train you how to use your software correctly and be a resource should you have specific or unique questions regarding how to enter a transaction.
QuickBooks, Peachtree, and Microsoft Money are the most popular out of the box accounting packages for small businesses. They are easy to use and set up. The problem I encounter the most is a lack of understanding of basic accounting principles and this often results in extra time to correct my client books at year end. In the long run, a client will save more money if they will engage my services in the beginning for setup and training. I also like to review the books a few times during the course of the year to ensure there are no incorrect transactions being booked on an ongoing basis. This process makes for a far less painful year-end for both my client and me.
Industry-specific software is generally far more expensive and more complex. Most reputable companies include setup and consulting as part of the front-end cost. I have found that manufacturing, construction, and non-profit type businesses generally should use industry-specific software. The reporting and information capabilities are more suitable than the cookie cutter options of out of the box software. For example, QuickBooks offers manufacturing, contractor, and even non-profit editions; however, the setup may require add-on programs, customized reports and heavy accountant involvement to provide the necessary information for management use. A cost comparison may reveal that you would have been better off purchasing a more expensive program initially.
I have been a QuickBooks Advisor in the past and I am an advocate of this program. I like the ease of use for my clients. Training time tends to be minimal and it is user-friendly software. QuickBooks has a great Simple Start program that is free to use within certain restrictive parameters. This is a great way for a client to try out the program and get a feel for it. A very small business may even decide to stay with the Simple Start program because it suits their needs perfectly.
Get a professional opinion on what is the best software for your needs. Spend the extra money initially to get the software setup and training and you will see the dividend pay-out at year end when you give your accountant a good financial package that requires very little clean up before your tax return can be completed.