Month: October 2017

You can get an enormous amount of useful information from QuickBooks’ reports, especially if you customize them to isolate the precise data you want. Reports included with the software range from the very simple, like Open Invoices, to output that’s exceptionally complex, like Trial Balance and Profit & Loss.

Warning: Standard financial reports like Trial Balance are easy to run in QuickBooks, but very difficult to understand and analyze. You should, though, be aware of what they’re telling you at least once a quarter – even once a month in some cases. Please call if you need help with this.

Sometimes, especially first thing in the morning as you’re planning your day, you just want to cut to the chase and get a quick overview of your company’s finances. That’s where QuickBooks’ Income Tracker comes in. It not only provides that overview, but it also contains links to related screens where you can do the work that’s needed there.

A Simple Layout

Click the Income Tracker link in the toolbar to open the tool’s main screen. If you’ve been using QuickBooks for a while, you’ll see a framework like this with your own company’s data already filled in.

Figure 1: QuickBooks Income Tracker displays both summaries of income types and the specific transactions that contribute to those totals.

Look first at the top of the screen. You’ll see six horizontal bars, each of which represents groups of transactions that either require immediate attention or will at some point in the future. Besides identifying the type of transaction, each block displays the number of transactions involved and their total dollar amount. They are:

• Estimates – estimates that have been created and shared with customers, but haven’t yet turned into sales
• Sales Orders – orders that have been entered but have been neither fulfilled nor converted to invoices
• Time & Expenses – hours that have been recorded for customers but not yet invoiced
• Open Invoices – invoices that have been created and sent to customers, but no payments have been received
• Overdue – open invoices that have passed their due dates
• Paid Last 30 Days – payments that have been received within the last 30 days

Modifying the View

Click on any of the colored bars, and the list of transactions below will change to include only those that meet that particular criteria. To get back to the default display of all transactions, click the Clear/Show Alllink in the upper right of the screen.

QuickBooks also lets you display a user-defined subset of the transactions. Click on one of the four drop-down lists above the transaction grid itself to change the view of:

• Customer: Job – choose just one from the complete list
• Type – Sales Orders, Invoices, Received Payments, etc.
• Status – All, Open, Overdue, or Paid
• Date – multiple ranges available

You can also modify the toolbar if your company doesn’t use all the sales forms/transaction types supported. To do so, click the gear icon in the far upper right of the screen and click in the boxes in front of Estimates, Sales Orders and/or Time & Expenses to remove them.

Taking Action

QuickBooks’ Income Tracker provides a great way to get a quick look at your finances. But it also serves as a launching pad for related activities.

Figure 2: Click the down arrow in the Action column to take care of tasks related to that transaction.

Highlight a transaction by clicking in the row, then click the down arrow at the end of the row in the Action column. The options that appear there depend on the type of transaction you selected. Choose a Sales Order, for example, and you can Convert to Invoice, Print Row, or Email Row. Options for an invoice are Receive Payment, Print Row, or Email Row.

As mentioned previously, QuickBooks offers numerous reports that can give you more insight about your accounts receivable. If you understand the software’s robust customization tools, you can create reports about your income that will answer questions you may have. If you’re unsure of what to do, please contact the office for assistance.

• By Leon Clinton
• October 31, 2017

The CP2000 is a notice commonly mailed to taxpayers through the United States Postal Service. It is generated by the IRS Automated Underreporter Program when income reported from third-party sources such as an employer does not match the income reported on the tax return.

What to do if you Receive a CP2000 Notice:

The CP2000 is not a tax bill, it merely informs you about the information the IRS has received and how it affects your tax; however, it is important to pay attention to what your CP2000 Notice states because interest accrues on your unpaid balance until you pay it in full. If you cannot pay the full amount that you owe, then you can set up a payment plan with the IRS.

If you receive a CP2000 Notice in the mail complete the response form. If your notice doesn’t have a response form, then follow the notice instructions. If the new information is wrong, then check the notice response form for instructions on what to do next. You also may want to contact whoever reported the information and ask them to correct it.

Note: If the information is wrong because someone else is using your name and social security number please call the IRS and let them know. You also can the link on the IRS Identity theft information webpage to find out more about what you can do.

Do I need to amend my return?

If the information displayed in the CP2000 notice is correct, you don’t need to amend your return unless you have additional income, credits or expenses to report. If you agree with our notice, follow the instructions to sign the response page and return it to the IRS in the envelope provided.

If you have additional income, credits or expenses to report, you may want to complete and submit a Form 1040-X, Amended U.S. Individual Income Tax Return. If you need assistance with this, please call the office.

How to Avoid Receiving a CP2000 Notice:

• keep accurate and detailed records
• wait until you receive all of your income statements before filing your tax return
• check the records you receive from your employer, mortgage company, bank, or other sources of income (W-2s, 1098s, 1099s, etc.) to make sure they are correct
• include all your income on your tax return including that from a second job or fees derived from the sharing economy (e.g. renting a spare room out on Airbnb)
• follow the instructions on how to report income, expenses and deductions
• file an amended tax return for any information you receive after you’ve filed your return
• Use a professional tax preparer who will help you avoid mistakes and find credits and deductions you may qualify for.

Beware of Fake IRS Tax Bill Notices

Taxpayers and tax professionals should be on guard against fake emails purporting to contain an IRS tax bill related to the Affordable Care Act. Generally, the scam involves an email notice that is sent electronically–even though the IRS does not initiate contact with taxpayers by email or through social media platform. The fake CP2000 notice is sent as an attachment.

Don’t hesitate to contact the office if you have any questions about IRS notices or letters you have received in the mail or otherwise.

• By Leon Clinton
• October 28, 2017

As a small employer, you may be eligible for a tax credit that lets you keep more of your hard-earned money. It’s called the small business health care tax credit, and it benefits employers that:

• offer coverage through the small business health options program, also known as the SHOP Marketplace
• have fewer than 25 full-time equivalent employees
• pay an average wage of less than $50,000 a year ($52,400 in 2017 as adjusted for inflation)
• pay at least half of employee health insurance premiums

Here are five facts about this credit:

• The maximum credit is 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers.
• To be eligible for the credit, you must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program Marketplace, or qualify for an exception to this requirement.
• The credit is available to eligible employers for two consecutive taxable years beginning in 2014 or later. You may be able to amend prior year tax returns to claim the credit for tax years 2010 through 2013 in addition to claiming this credit for those two consecutive years.
• You can carry the credit back or forward to other tax years if you do not owe tax during the year.
• You may get both a credit and a deduction for employee premium payments. Since the amount of your health insurance premium payments will be more than the total credit, if you are eligible, you can still claim a business expense deduction for the premiums in excess of the credit.

Contact the office today if you’d like more information about the small business health care tax credit.

• By Leon Clinton
• October 25, 2017