May 2013 – Financial Dream Team

Preparing Purchase Orders Precisely

Part of the reason for QuickBooks’ success is its exceptional flexibility. By allowing users to turn features and preferences on and off, the same software can be used by a wide variety of business types and sizes.

In some cases, the default settings that QuickBooks supplies will work fine for your company. This is not necessarily true in the case of purchase orders, since the whole inventory procurement process is so complex, and users can have such a diverse range of needs.

Figure 1: QuickBooks 2013’s default Create Purchase Orders screen. You can see that formatting options are available when you click the Formatting tab.

So before you order your first widget, make sure that your purchase order form is designed to accommodate all of the information you want to record and track, with no unnecessary data fields to confuse staff.

Working with Templates

There aren’t many program preferences to check. If you can open a purchase order, you’re set. If not, go to Edit | Preferences | Items & Inventory and be sure that the box next to Inventory and purchase orders are active is checked.

What you want to find first is the Additional Customization screen for the Custom Purchase Order Template. This is easily accessed from the Create Purchase Orderscreen itself in QuickBooks 2013, but if you’re using an earlier edition, go to Lists | Templates | Custom Purchase Order Template. Double-click on it to open the Basic Customization page. Here, you can add a logo, change fonts and colors, etc. But go ahead and click on the Additional Customization button at the bottom of the screen. This window opens:

Figure 2: The left pane of the Additional Customization window contains additional fields that you might want on your purchase orders, like Ship Via and Terms.

(Tip: If you want to design multiple purchase order templates, click Manage Templates on the Basic Customization screen, then Copy on the Manage Templates page. Rename the form and make your modifications. This version will always be available as an option when you create purchase orders.)

Making It Yours

Each of this window’s four tabs opens a new screen that gives you customization control over a different element of the purchase order form: the top, bottom and midsection, and printing options. You simply check the boxes next to the fields that you want to add to the current form (be sure to check both columns if you want the fields to appear both onscreen and in your printed versions; sometimes, one is not an option) and uncheck any you want to delete.

In the right pane of this window, a dynamic preview changes to reflect each addition or deletion. And when you’ve finished altering the set of fields, you can see an actual print preview. Close that and keep clicking OK until you get back to the Templates window.

This simplicity and ease carries over into the more cosmetic elements of your purchase order. Make sure the template you want to redesign is highlighted and click Templates | Create Form Design. QuickBooks walks you through the process of adding a logo and background, colors and fonts, and a grid style, and it lets you apply this same theme automatically to all of your forms. (You can modify your design similarly on the Basic Customization page, minus the wizard-like approach and the background options.)

Simple but Complicated

One more comment about the QuickBooks 2013 purchase order screen. Beyond making your formatting options available in the “ribbon,” it also moves you through purchasing to the receiving process. With the appropriate purchase order open, click Create Item Receipts in the ribbon. This window opens, with the correct vendor name selected. When you click in the Item field, this small window appears:

Figure 3: Click Yes here and select the correct PO, and QuickBooks fills in the data. If you check the Bill Received box, the Enter Bills window opens.

QuickBooks’ purchasing and receiving tools makes your inventory-tracking job easier, but you still need to understand the workflow. We encourage you to let us work with you as you begin managing inventory – or to contact us if you’re tangled up in what can be a very challenging element of QuickBooks.

Tax Rules for Children With Investment Income

Children who receive investment income are subject to special tax rules that affect how parents must report a child’s investment income. Some parents can include their child’s investment income on their tax return, while other children may have to file their own tax return. If a child cannot file his or her own tax return for any reason, such as age, the child’s parent or guardian is responsible for filing a return on the child’s behalf.

Here’s what you need to know about tax liability and your child’s investment income.

1. Investment income normally includes interest, dividends, capital gains and other unearned income, such as from a trust.

2. Special rules apply if your child’s total investment income is more than $2,000 ($1,900 in 2012). The parent’s tax rate may apply to part of that income instead of the child’s tax rate.

3. If your child’s total interest and dividend income is less than $10,000 ($9,500 in 2012), then you may be able to include the income on your tax return. If you make this choice, the child does not file a return. Instead, you file Form 8814, Parents’ Election to Report Child’s Interest and Dividends, with your tax return.

4. If your child received investment income of $10,000 or more in 2013 ($9,500 or more in 2012), then he or she will be required to file Form 8615, Tax for Certain Children Who Have Investment Income of More Than $2,000, with the child’s federal tax return for tax year 2013.

If you have any questions about tax rules for your child’s investment income in 2013, don’t hesitate to send us an email or give us a call.

Six Tips for People Who Pay Estimated Taxes

If you have income that is not subject to withholding you may need to pay estimated taxes to the IRS during the year. Whether you need to pay estimated taxes is dependent upon your financial circumstances, what you do for a living (if you’re self-employed for example), and the types of income you receive. Here are six tips that explain estimated taxes and how to pay them.

1. If you have income from sources such as self-employment, interest, dividends, alimony, rent, gains from the sales of assets, prizes or awards, then you may have to pay estimated tax.

2. As a general rule, you must pay estimated taxes in 2013 if both of these statements apply:

1) You expect to owe at least $1,000 in tax after subtracting your tax withholding (if you have any) and tax credits, and2) You expect your withholding and credits to be less than the smaller of 90 percent of your 2013 taxes or 100 percent of the tax on your 2012 return. Special rules apply for farmers, fishermen, certain household employers and certain higher income taxpayers.

3. Sole Proprietors, Partners, and S Corporation shareholders generally have to make estimated tax payments if they expect to owe $1,000 or more in taxes when they file a return.

4. To figure estimated tax, include expected gross income, taxable income, taxes, deductions and credits for the year. You’ll want to be as accurate as possible to avoid penalties and don’t forget to consider changes in your situation and recent tax law changes.

5. For estimated tax purposes the year is divided into four payment periods or due dates. These dates are generally April 15, June 15, Sept. 15 and Jan. 15 of the next or following year.

6. The easiest way to pay estimated taxes is electronically through the Electronic Federal Tax Payment System, or EFTPS, but you can also figure your tax using Form 1040-ES, Estimated Tax for Individuals and pay any estimated taxes by check or money order using the Estimated Tax Payment Voucher, or by credit or debit card.

Give us a call today if you need help making estimated payments.

Month: May 2013