Month: April 2019

Last month, we showed you how to start building a foundation for tracking jobs in QuickBooks. We explained that you can use the software’s jobs tools to track income and expenses for any related group of items and/or services (you can think of them as projects, if you prefer).

We covered three elements of preparing to use “jobs”:

• Creating job records that you can use in transactions (example: develop promotional materials)
• Creating item records that can be assigned to jobs (example: website development)
• Determining whether you’ll need to create a new account in your Chart of Accounts for your job income and expenses. You should consult with a QuickBooks professional anytime you think it might be necessary to modify the Chart of Accounts.

Using Your Job-Related Records

Now that you’ve recorded the items and jobs themselves, you can start using them in transactions, and eventually track your progress by generating reports.

Let’s say you worked eight hours on website development for your promotion job. You would open the Employees menu and select Enter Time | Time/Enter Single Activity to open this window:

Figure 1: You can enter individual, billable activities and assign them to jobs.

In the example above, you are limited to recording one day’s work on a specific SERVICE ITEM. You would verify the date and select from the drop-down lists to complete the fields for employee NAME, CUSTOMER:JOB, and SERVICE ITEM. You can either use the timer to time the job or enter the number of hours manually in the DURATIONbox. Click in the Billable box to create a checkmark and add NOTES if you would like. The CLASS field is optional; talk to us if you’re not familiar with this feature.

If you worked on two separate service items on the same day for that CUSTOMER:JOB, you would create two individual records. You can also enter billable activities directly on a timesheet by clicking Employees | Enter Time | Use Weekly Timesheet. Once you select the employee NAME at the top, any single activity(ies) you created that week will appear as individual records, and vice versa.

Writing a check or using a credit card for a job-related purchase that should be billed to the customer? You would fill out these forms in QuickBooks like you usually do, making sure that you document the items or services by highlighting the Items tab, select the correct CUSTOMER:JOB, and make a checkmark in the BILLABLE? column.

Figure 2: If you write a check or charge your credit card for purchases that can be billed to a CUSTOMER:JOB, be sure to record it in QuickBooks.

If you will be doing some billable driving for your job, you should also be tracking your mileage in QuickBooks. Open the Company menu and select Enter Vehicle Mileage. If you haven’t created a VEHICLE record in QuickBooks, click and easily do so. Complete the rest of the fields and save.

Tip: Do you want to see some of your overhead expenses on job costing reports? Create a CUSTOMER:JOB named “Overhead” and assign related costs to it.

Billing the Billables

When the time comes to invoice your customers (Customers | Create Invoices), you’ll see how your careful work in QuickBooks simplifies that task. Open an invoice form and select a CUSTOMER:JOB. If you’ve entered billable items for him or her, this small window will open:

Figure 3: When you create an invoice for a CUSTOMER:JOB who has billable time, mileage, or other expenses, QuickBooks can automatically add them.

If you leave the first option checked and click OK, another window will open that lists all of the expenses you’ve marked as billable to the customer, arranged by type. Click in the first column of each expense you want to include and click OK. Your invoice containing those entries will open. Do any editing necessary, and then save it.

Note: You’ll probably notice two fields in the Choose Billable Time and Costs window that refer to Markup. This is an advanced concept that we can explore with you, should you want to charge customers more for expenses you’ve incurred on their behalf.

Related Reports

QuickBooks contains a wide variety of reports related to your work billing customers for jobs. Click Reports in the navigation pane or Windows menu, then Jobs, Time & Mileage to see what’s available. Choose a date range and click Run to see them appear with your own data.

If you’ve never worked with jobs in QuickBooks, we strongly recommend that you let us help you here. There are a lot of moving parts, and you don’t want to miss out on any of your efforts or expenses that are billable.

• By Leon Clinton
• April 30, 2019

The Tax Cuts and Jobs Act included a number of tax law changes that affect small businesses such as deductions for fringe benefit, which can affect both a business’s bottom line and its employees’ deductions. Here’s a summary of what these are:

Transportation fringe benefits. The new law disallows deductions for expenses associated with qualified transportation fringe benefits or expenses incurred providing transportation for commuting, except as necessary for employee safety.

Bicycle commuting reimbursements. Under the new tax law, employers can deduct qualified bicycle commuting reimbursements as a business expense for 2018 through 2025. The new tax law suspends the exclusion of qualified bicycle commuting reimbursements from an employee’s income for 2018 through 2025. Employers must now include these reimbursements in the employee’s wages.

Moving expenses. Employers must now include moving expense reimbursements in employees’ wages. The new tax law suspends the former exclusion for qualified moving expense reimbursements. There is one exception for active duty members of the U.S. Armed Forces. They can still exclude moving expenses from their income. There is additional guidance on reimbursements for employees’ who moved in 2017, but were reimbursed for expenses in 2018. Generally, reimbursements in this situation are not taxed.

Achievement awards. Special rules allow an employee to exclude achievement awards from wages if the awards are tangible personal property. An employer also may deduct awards that are tangible personal property, subject to certain deduction limits. The new law clarifies the definition of tangible personal property.

Don’t hesitate to call if you have any questions about tax law changes affecting fringe benefits and your small business.

• By Leon Clinton
• April 27, 2019

If you haven’t contributed funds to an Individual Retirement Arrangement (IRA) for tax year 2018, or if you’ve put in less than the maximum allowed, you still have time to do so. You can contribute to either a traditional or Roth IRA until the April 15 due date, not including extensions.

Be sure to tell the IRA trustee that the contribution is for 2018. Otherwise, the trustee may report the contribution as being for 2019 when they get your funds.

Generally, you can contribute up to $5,500 of your earnings for tax year 2018 (up to $6,500 if you are age 50 or older in 2018). You can fund a traditional IRA, a Roth IRA (if you qualify), or both, but your total contributions cannot be more than these amounts.

Traditional IRA: You may be able to take a tax deduction for the contributions to a traditional IRA, depending on your income and whether you or your spouse, if filing jointly, are covered by an employer’s pension plan.

Roth IRA: You cannot deduct Roth IRA contributions, but the earnings on a Roth IRA may be tax-free if you meet the conditions for a qualified distribution.

Saving for retirement should be part of everyone’s financial plan and it’s important to review your retirement goals every year in order to maximize savings. If you need help figuring out which retirement strategies are best for your situation, give the office a call.

• By Leon Clinton
• April 24, 2019