Accounting News and Notes

Business owners of all types should be well on their way to pulling together all of the information which will be needed in order to prepare their entities income tax returns. C Corporation as well as S Corporation returns are due March 15th/or within 75 days after the close of the corporations taxable year. C Corporations should file a Form 1120 while S Corporations should file a Form 1120S. LLC’s, LLP’s, and Partnership returns are due April 15th. If one is a single member LLC then you can file a schedule C as part of your personal return. Otherwise LLC’s, LLP’s, and Partnership Returns/a Form 1065 would be filed.

Regular or C Corporation Returns are required to pay taxes on all of the income they generate at the corporate level while all flow through entities (S Corporations, LLC’s, LLP’s, and Partnerships) issue a K-1, as a part of their income tax return, to each owner reflecting their share of each years profit or loss.

Although all income tax returns may be legally extended allowing for a later filing date please be reminded that an extension to file is not an extension to pay and that both the IRS and states will assess penalties and interest to late payment. Accordingly, start today on pulling your information together and get your return filed ASAP so that you can go back to focus on the task at hand of having a successful and prosperous 2008.

The U.S. Senate just voted on a resolution that would save approximately 12 million people an average of $2000 each.  The AMT (Alternative Minimum Tax) rules have been in force for years and were intended to ensure that those in higher tax brackets did not receive undue benefit from certain “tax preference” items.  As a result of the lack of indexing of preference items of the AMT calculations, it is estimated that some 25 million people would be hit by the tax without the pending legislation being passed. The Senate proposal is a one-year fix and does not address how additional funds would be generated.  The House, who consistently strives to pass legislation that is revenue neutral, (i.e. cuts of government revenue dollars must be offset by increases in other areas) is expected to see the Senate version soon.  Our best advice today is to write your Congressmen ASAP.  Your 2007 tax bill depends on it.

The IRS just announced that it is looking for 115,478 of taxpayers who are owed tax refunds totaling $110 million. Due to the IRS not having the correct addresses of taxpayers who had potentially recently moved/changed addresses, the checks were returned marked by the Postal Service as being undeliverable. The average refund check is approximately $950 and are claimable ASAP by the recipients who are due them. In fact, the IRS also announced that several taxpayers had more than one check waiting.

The IRS wants to give the money back to the taxpayers ASAP and is doing what it might to contact all concerned. If you think you might be one of these who is still missing your refund or you know someone who is, go to the IRS’s web-site at www.IRS.gov and utilize the “Where’s My Refund?” tool to check on the status of your refund. Here you can resolve most of the problems you/the IRS might be having in speeding your refund to you. Taxpayers can also assess the IRS regarding their refund by calling 1-800-829-1954.

FYI, the number of undeliverable refunds are relatively insignificant to the total of all refunds as the IRS processes nearly 105 million refunds totaling about $240 billion either by mail or direct deposit.

Have you ever wanted to work with someone whom you felt really cared about you, your business, your retirement, and planning for your family? I have a heartfelt conviction that I really want to “serve” my fellow Business Owners and to give advice that hopefully you will feel are beyond the scope of CPA services you ever experienced. Do you want that ole’ time feeling of being served by someone sensitive to you? I welcome meeting with you FOR FREE to discuss you and your business’s plans.  

I work exclusively with business owners whom are striving to maximize their profit and potential. I bring to the table twenty years of experience as a CPA and 18 years of managing my own successful practice. My credentials include passing most of the CPA exam while still in school, graduating Magna Cum Laude, several honor societies, obtaining the Upcoming Junior Award, working with small rapidly growing privately held companies, a history of success on IRS representation issues, and recently I won the SBA’s Accountant Advocate of the year in Georgia. I strive to anticipate bumps in the road so that you might be able to focus on the business of running your business. I would welcome meeting with you for a free consultation. 

Services Offered

Financial Statements, Tax Planning, Corporate Income Taxes, IRS Representation, Strategic Advice, Personal Income Taxes, Entity Selection, Critical Business Decisions, Banking Relationships, Attorney Relationships, Part Time-CFO

At HIS CPA P.C. we strive to serve all of our clients each and every day utilizing all of our talents, resources, and wisdom to your best advantage. Striving to price our services in the big fat happy middle with many being below and many being above our fees we strive to make an honest day’s wage and in return serve our clients to the highest standards possible. Our motto…”Serving HIM…By Serving You, One Tax Return at a Time”

Business Management and the whole of its many varied issues are a daunting issue for both the new and experienced business owner. HIS CPA P.C. has combined at their web site a litany of many varied issues which has never before been available in such a succinct and well written format. John Dillard, CPA the firms founder desired to develop a firm which lived out the “Golden Rule” in serving others and community. By offering this information gratis, Mr. Dillard’s desire is to heighten the understanding of his fellow business owners and to contribute back to the community in which he lives and works.

By turning onto their web site you will find a plethora of information which will always be available at your fingertips. Covering issues for selecting a new entity type, how to look for a CPA, new corporation forms, and even a registration checklist is a must read for the new business owner striving to get off on the right foot of their financial future. For those who need financing you will be able to learn the various types of financing options available ranging from both traditional sources to alternative financing methods. By discovering which plan type works best for you and your business you will be better suited to successfully fulfill your business’s financing needs. There’s even a section on how to work with and “court” your banker to gain access to needed financing.

For the savvy business owner their is much to be gained as there are recaps of payroll forms and how they are utilized, clarification of how to properly classify workers as either independent contractors vs. employees, and a checklist on how to come a new employer in Georgia. For those who have run afoul of the IRS and are dealing with tax issues, there are words of wisdom to successfully resolve your tax problems, how to pay your taxes on a timely basis by properly utilizing withholding, estimate payments, and extensions. You will also be able to discover the general guidelines and rules of how to qualify for and process and Offer in Compromise, which is where the IRS & GA both will reduce your bill to what you and afford to pay based upon detailed tax regulations.

Proper preparation of financial statements and their utilization of financial statements are essential to a business owner being able to understand and adequately interpret their own financial results. Explaining the difference between current and long term assets, cash flow statements, forecasting, and gross margin analysis will give the savvy business owner the information they need to account for their business accurately. By utilization and understanding of this information you will be able to accurately decipher trends and variances well before they become problematic or worse. The web site details how to use your own business’s financial information to discover how to manage the pulse and heart beat of your business.

Knowing how to properly track business deductions, protecting your business’s intellectual property, how to buy insurance, handling automobile expenses, mergers and acquisitions, business purchases and sales, and just some of the other issues you will discover as you will want to go back again and again gaining needed wisdom and insight as you plan your business’s future.

If you have either already just started a business or in the process of beginning one, the decision on whether or not to incorporate and its related variables will be one of the most important financial decisions you ever reach. Although many financial pundits will encourage a one size fits all approach encouraging one entity type over another, it is wise to carefully consider and evaluate this decision as both your mode of operation, the availability of certain financial transactions, retirement plans, etc. will be greatly impacted. As not all transaction types are will suited for every entity type knowing what your business short term and long term plans are is the first step in a careful determination of your entity/incorporation type. For example many real estate developers, for a myriad of reasons, are well suited to be an LLC, LLP or partnership due to the flexibility of profit allocations and the movement/transfer of real estate from and to the business. However, as many of these variables/options will not be even a blip on the radar screen for a service, manufacturing, distribution, or wholesale business they may want to consider if an S Corporation might be the best course to pursue due to its profits only being taxed once as opposed to the double taxation of a C Corporation.

The 2007 mileage rate is 48.5 cents per mile for those who utilize their personal vehicle for business use. Whether you own the business yourself or work for someone else tax law requires you to keep a by day log to support your business miles. Just as when you would work for someone else and be required to turn in an expense  report to get reimbursed for any business expenses you might have paid personally, so it is when you are the owner as well as the employee. As it is difficult to recall all the business expenses you might have incurred after the fact, it is usually most advantageous to track items as you go being sure to properly list and document business expenditures you personally pay as they are incurred.

An expense report does not need to be elaborate but it should include the nature and purpose of the business expense and all receipts, in accordance with tax law, over $75 would be maintained. Usually it is easiest to keep copies of all credit card receipts and when needed adding copies of the actual receipts to clarify the actual nature of an expense.

Periodic and consistent tracking such as turning in an expense report at least monthly and perhaps even weekly if you travel often is the best way to stay abreast of expenditures as they are incurred and to seek and obtain current reimbursement for them. If you are able it is always best to obtain reimbursement for expenses rather than deducting these monies on  your personal return as these monies would be a tax free reimbursement of monies to your personal assets rather than a tax deduction which is limited, by tax law, to only the excess of the un-reimbursed business expenses which exceed seven and one-half percent of your adjusted gross income.

If you have not yet file, it is not too late to get your return accurately filed, processed, and paid. Although it is too late to avoid the IRS’s potentially assessing the late filing penalty in addition to any late payment penalties which might be due. As our tax system is a voluntary system the IRS has incentives such as these to encourage taxpayers to pay file and pay their taxes as they become due.

The IRS as well as individual states are a pay as you go system requiring taxpayers to pay their taxes as they earn the monies to which they relate. Many fall prey to believing that an extension to file is an extension to pay and it is anything but that and is well spelled out in tax law that taxpayers are required to submit monies for their taxes as their salaries, profits, and taxable income are earned.

If you have filed and paid late the IRS has several programs geared toward working with taxpayers who have failed to meet required dates and guidelines. Contact us today; you will be glad you did.

Looking ahead to the future while taking care of the past and present are a constant everchanging challenge for the business owner. Although there is no magic bullet, obtain the services of a quailifed professional CPA is your best option to ensure that you satisfy the myriad of steps, actions, forms, and procedures required of a business owner to stay compliant with all federal, state, and local laws.