Tax Savings Tips for a Home-Based Business

So you have decided to start home-based business. Whatever the reasons might be, a home-based business is a great start for entrepreneurs and there are many factors to be considered. One of the most important is Tax Planning. True tax planning provides concepts and strategies needed to minimize taxes and is one key to financial success in any business venture.

There are many tax savings benefits available for home-based businesses. One of the most important is home office deductions. If you use part of your home for business you may be able to deduct expenses for the business use of your home. This deduction is available to both homeowners and renters and applies to all types of homes. To claim the deduction you must prove that the office space in your home is the principal place of your business and is regularly and exclusively used for business purposes. The deductions can be computed using a simplified method or a regular expense method. The “regular expense method” requires determination of actual expenses for the entire home, including mortgage interest, insurance, utilities, repairs and depreciation. Deductions for a home office are based on the percentage of your home devoted to business use. The “simplified method” is allowed starting 2013 and permits standard deductions of $5 per square foot of home used for business up to a maximum of 300 square feet.

Another important deduction is Automobile expenses for business use. Auto expenses can be claimed using standard mileage rate or actual expense method. For actual expense method, taxpayers must keep track of all expenses related to the automobile including repairs, gas, tolls parking and depreciation. If the automobile is for both business and personal use, only the portion related to business use is deductible. The standard mileage rate method does not require tracking actual expenses but provides standard mileage rate of 56.5 cents per mile (for 2013) in addition to parking and tolls. Taxpayers in this case only need to track mileage driven for the business purposes during the year. I recommend computing both methods to see which produces the most deductions.

Self-employed taxpayers can deduct health insurance premiums on their personal income tax returns instead of itemized deductions which is subject to limitations. Self-employed taxpayers often overlook qualified pension plan contributions which are tax deductible.

Another tax-savings idea is to hire your child for your business. Wages paid to a child are deductible business expenses. Your spouse also can be hired as an employee. Family members can contribute money towards individual retirement accounts, which is another legitimate way to reduce tax burden. It is very important however, to hire family members to fill a business need and not just hire them for tax savings purposes.

Self-employed individuals are subject to estimated tax payments. Probably the most common mistake among self-employed individuals is neglecting to put aside enough money for estimated taxes. Making sure to pay estimated taxes quarterly is as important as running your business.

Incorporating a business (Corporation or LLC) may provide home-based business owners legal protection, so if your business is operated as sole proprietorship, consider incorporating.

Good tax planning begins with getting organized—particularly when it comes to keeping records about the things you spend money on for your business. Keeping track of auto mileage, business income and spending will ensure proper tax treatment of business related income and expense. Whether you decide to follow just one of these tips talk with www.outsourcedbookeeping.com.

How To Record Outsourced Payroll in QuickBooks

The first thing to know about how to record your outsourced payroll is that you should be outsourcing your business's payroll. Trying to do your own  payroll opens you up to a lot of exposure to errors and problems like miscalculating taxes, which can lead to even bigger problems like penalties and interest.

It is important that you record your payroll correctly or you could be over or understating your expense or net income. We find that many clients will just record the net amount that comes out of their checking account. They will debit payroll expense and credit cash. This is not the proper way to do this, and can lead to dangerous irregularities. There are several buckets that payroll falls into:

Salaries: This will be recorded as an expense (or debit). This is your gross wages.

Payroll Tax Expense: This should be recorded as an expense (or debit). This represents the employer's piece of FICA, SUI & FUTA.

Payroll Liabilities: This is basically anything that you deduct from your employees' paychecks. It includes things like 401Ks, health insurance, payroll taxes, and garnishments. These deductions would all be recorded as a credit on your journal entry. When these deductions get paid out, you  will relieve the liability.

Payroll Processing Fee: This is the fee that the payroll company charges you for their service. This would be recorded as an expense (or debit).

Direct Deposit/Live Checks: This represents the net amount of the employees' checks. This would be recorded as a credit to your checking account.

It is important to understand the difference between an expense and a liability so that you can record your entries correctly. Once you have your entry fgured out, I would recommend setting up a memorized transaction so that all you have to do is just change the figures but not the accounts. This way there's less change being made, and therefore a smaller chance for error.

Outsourced Accountants Do Daily Bookkeeping work

If you’re a small business owner with a rapidly growing business and annual revenue in the $1 to $25 million range, you may find yourself overwhelmed with bookkeeping duties. You may be considering Outsourced accountants, but you’re not sure if you’re ready to take that step.

You've probably grown past the stage where you’re doing the bookkeeping and accounting yourself, but as a steady stream of in-house bookkeepers enters and leaves your office, you may find the tasks fall into your lap more often than you’d like.

Even when you’re not managing the books, you’re managing the accounting department, which means hiring, training and overseeing your bookkeeper. This is not what you signed up for as a small to mid-sized business owner.

More and more business owners like you are discovering the answer to bookkeeping success in Outsourced accountants through outsourcedbookeeping.com. The Outsourced accounting department we provide to clients takes care of all the bookkeeping and accounting services businesses need from dedicated, secure home offices. Let’s take a look at some of the daily, weekly and monthly tasks of your Outsourced accounting department.

Daily Bookkeeping Processes

On a daily basis, Outsourced accountants provide GAAP-compliant, accrual basis bookkeeping. This includes:

- Accounts Payable

- Accounts Receivable

- Banking

- Payroll

- Financial reporting

Because outsourcedbookeeping bookkeepers work the same hours you do, in your time zone, they are typically available via instant messenger or email if you  have questions or need timely information.

Your Outsourced Accounting Department

When you contract with Outsourcedbookeeping.com, you get even more than just daily bookkeeping services. Our trademarked "Processes in Place" procedures includes a Client Procedures Manual that outlines your expectations and the services and information our Outsourced accountants will deliver to you on a schedule we set together.

Our Accounting Grader tool helps you see your organization’s strengths and weaknesses in your bookkeeping and accounting processes, so you can work with outsourcedbookeeping.com to improve processes and procedures for maximum productivity and profitability.

Outsourced Accountants and Financial Controller Services

In addition to your full-charge bookkeeper, your Outsourced accounting department includes a financial controller. This person oversees your bookkeeper and reviews your company’s financial data with you, so you can understand what all the financial statements really mean. Think of this person as your trusted business adviser, a service you’re not likely to find in an in-house bookkeeper.

What Outsourced Accountants Won’t Do

So you’re unhappy with your experiences with in-house bookkeepers and you’re contemplating Outsourced accountants. It’s important to understand the benefits, but also to know what Outsourced accountants won’t do for your company.

Your Outsourced accountant and financial controller won’t attempt to take control of your company. Your financial controller will provide advice, but the final decisions are always up to you.

Outsourced accountants won’t gossip about your company. They live hours away and have nothing to gain and everything to lose by airing information about your company. If this has been a concern, in the past, with in-house bookkeepers, you can rest easy.

Finally (and we hope this isn't a deal breaker), Outsourced accountants won’t answer the phones in your office when the administrative assistant goes on break, make coffee or greet clients. It’s just not practical.

But if you’re looking for someone who will keep your books up to date and provide accurate financial reporting, you’re in the right place at outsourcedbookeeping.com.

Outsourcing Of Accounting And Bookkeeping Responsibility: Ten Points To Keep In Mind

While it may seem like a mammoth step for the uninitiated, many claim that accounting outsourcing is not only an effective but also a smart solution. If you choose the right BPO partner, you get great benefits in managing day to day accounts and finance tasks in the most secure, efficient and reliable manner ever. However, before you do that, you must know what the essential qualities of accounts and finance outsourcing are.

1. Accounting outsourcing proves to be a right decision only when you have a bulk of non-core accounting tasks that takes up most of your time. It can also cover tricky accounting tasks that you and your staff are unable to do. Small businesses hire talented account and finance professionals so that they can gain insight from them and get their routine or tricky accounting jobs done.

2. Many companies hire the services of accounts professionals only during the year end or when they have heavy influx of work. It is the best way to save money as you only pay when your company needs the service the most. However, if you have a steady flow of heavy work, it would be advisable to make a long-term contract at a discounted price.

3. You can hire accounting staff of all levels from CFO to a specialist for accounts payable and receivable. This flexibility allows you to pay for what you need.

4. Always ensure you get proper closing procedures at the end of the month and get the accounts double checked by a QA (Quality Analyst). With a proper quality control system in place, you can check for discrepancies and ensure you get reliable and accurate financial reports. This way, you are not in for surprises when your company is audited.

5. You must know how to allocate tasks and duties to the outsourcing partner and your staff. If you have a clear job description, there will be less hassles and shirking of duties in future.

6. Outsourcing is a great way to increase accountability and transparency in organizations. If you suspect that your in-house staff is not giving the true picture of your accounts and finance, it may be just the time to think about outsourcing.

7. The best part about accounts outsourcing is that you are hiring field experts that have sound knowledge of regulatory compliance.

8. Another benefit of outsourcing is you can inculcate finance best practices in your organization with the help of their expertise and guidance. This can improve your accounts maintenance and reporting functions. However, most companies fail to make use of this greatest benefit and sadly neglect it.

9. When you outsource your tasks, remember you do not outsource your responsibilities. Make regular checks and ensure there are no errors. This way you are better prepared for audits.

10. Most importantly, choose a genuine, authorized outsourcing service provider that can deal with any accounting challenges, is equipped to handle the pressure during emergencies, adjusts to the size of your organizations and turns in work on a regular basis.

With more and more business responsibilities and functions being outsourced, why should finance and accounting be ignored? Accounting outsourcing is one of the business functions that can safely be outsourced to a third party.

We understand that choosing to outsource is an important business decision. It is a question of not only earning money by cost cutting but the integrity and bottom line of your company is at stake. So, you need a business partner who values as much your customers as you do. Please be assured that our skilled teams, who are minimum commerce graduates, have sufficient exposure and experience of handling the outsourced bookkeeping and tax return preparation assignments.

Outsourced Bookkeeping can help you to take the benefit of saving your costs by outsource to us.

Reading A Balance Sheet : Liabilities

Much like how a company’s assets are broken down into subcategories, liabilities are segmented as well. Usually, liabilities are divided into two major categories – current liabilities and long-term liabilities. On a balance sheet liabilities are typically listed in order of shortest term to longest term, which at a glance, can help you understand what is due and when.

Current Liabilities

Current Liabilities are items that need to be paid off in less than a years’ time. Some examples of current liabilities include:

Loans

Short-term loans are factored under a company’s current liabilities. Securing the loans are the company’s existing assets and inventory. Because these loans have a short repayment schedule, the balance of the entire loan is recorded.Reading A Balance Sheet: Liabilities

Even though long-term loans are considered a long-term liability, sections of these loans do show up under the “current liability” section of the balance sheet. Say for instance, a start-up company has a loan of $200,000 with $25,000 due this year. The portion of the loan due this year ($25,000) shows up in the current liabilities section, while the remainder ($175,000) will be recorded under the long-term assets category.

Accounts Payable

Your accounts payable are usually set up on a payment schedule. On average, vendors will give a company thirty days to pay an invoice, unless other arrangements have been made. This thirty day period of credit is in essence a short-term loan, which is why payables are recorded under the current liabilities section of the balance sheet. The amount of accounts payable recorded on a balance sheet is the amount due to vendors and suppliers as of the date the balance sheet is run.

Accrued Liabilities (Expenses)

Accrued liabilities (also called accrued expenses) are expenses that have occurred over the course of a set period, but have not been paid or recorded under accounts payable. Accrued expenses include payroll. Employee wages aren’t paid ahead of time, but are compensation for work already provided. Take for example, a company whose payroll cycle occurs once per month. Charging an employee’s pay in June as an expense for June is inaccurate. You are technically paying for the employee’s work he or she performed in May. To balance this out, you record the payroll as an accrued expense, as it reflects that it is a payment for May even though the check doesn’t get cut until June.

Long-Term Liabilities

Long-term liabilities are anything that has a repayment schedule of a time period of more than one year. Items that are considered long-term liabilities include company bonds, and long-term loans such as mortgages and other bank-loans. Owner’s equity is also included in this category. Company shares and stocks are recorded as long-term liabilities as are retained earnings which are profits that have been reinvested into the business.

Outsourced Bookkeeping Services Put Your Financial Statements at your Fingertips

Where are your most important financial statements right now? If you wanted to check your company’s cash flow, profit and loss, or Accounts Receivable, would you know how? Maybe you’d ask your bookkeeper, and she’d generate those reports … when she gets a chance, as soon as he gets through the rest of the papers on his desk.

Some business owners worry that if they shift to Outsourced Bookkeeping services with a virtual bookkeeping firm, they’ll lose control of their own company’s finances. After all, you’re putting your financial statements “in the cloud,” which sounds sort of ethereal, other-wordly, or out of your control.

But that’s not true at all.

As part of your outsourcedbookeeping.com, all your up-to-date financial records are stored securely on our servers and backed up multiple ways. No matter what happens, you’ll always have access to your data.

If you want to check any financial statement, simply log in to QuickBooks through any internet-enabled device with the latest version of a Web browser (for security), and you can generate your financial records with just a few clicks.

If you have questions about the financial data, it’s as easy as sending an email or instant message to your outsourcedbookeeping.com full-charge bookkeeper during business hours. She’ll get back to you in a timely manner.

You may also schedule a skype meeting with your part-time financial controller to help with strategic planning or to help you analyze financial statements that may be beyond your grasp. With all this financial data right at your fingertips, and expert advisors explaining what it means, you’re in a better position than ever before to make financial decisions about the future of your company.

Knowledge is power. outsourced Bookkeeping services through outsourcedbookeeping.com gives you more power over your company’s finances than ever before.

In-House Bookkeeping Vs Outsourced Bookkeeping

Most businesses rely on an in-house bookkeeper to handle their bookkeeping needs. Usually, this in-house bookkeeper is an office assistant who handles bookkeeping in addition to various other tasks. Having bookkeeping handled by non-specialists is error-prone and expensive especially when you can outsource bookkeeping at a fraction of the cost while dramatically improving its quality. How is that possible, you may ask?

Until recently, outsourced bookkeeping was only feasible for the largest businesses. The advent of the Internet and access to a global pool of virtual resources has made outsourcing feasible for even small businesses. Anyone anywhere with access to a computer and Internet can provide bookkeeping services.

Outsourcing enables specialization and quality improvement not just with bookkeeping but throughout the business. The quality of bookkeeping benefits from access to a rich pool of virtual bookkeepers. Quality of other processes in the business improve due to more time that is now available. As a result, 

outsourcing enables the business to focus on what it does best and allows the service provider to deliver what they do best. So, outsourcing improves quality by enabling specialization throughout the business.

Outsourcing offers significant cost savings. By having access to a rich pool of talented virtual bookkeepers across the globe which includes low cost countries like India, the business can cut costs from lower hourly rates and from lesser number of hours it takes the bookkeeper complete tasks. Outsourced bookkeeping also reduces overhead. With an in-house assistant, you usually have to provide an office desk with computer and pay the assistant whether or not there is actual work. Such pay includes salary, vacation time, sick time, social security, medicare and healthcare. With an outsourced bookkeeper, you only pay for hours you use and there is no additional overhead.

Outsourcing reduces business liability in two ways. First, by letting a third party handle the books, any errors do not result in criminal prosecution as the business can easily point their fingers at the virtual bookkeeper. Second, having a specialist handle the bookkeeping drastically reduces the number of errors and associated liabilities.

If competition is staged between in-house bookkeeping and outsourced bookkeeping, the chances of in-house employee is slim because bookkeeping firms have larger workforce and professionalism compared to in-house employee. Bookkeeping firms engagement with business can be controlled based on the volume and can be slashed according to the requirements. Bookkeeping demands the specialization and vary among the nature of businesses. It is important that books are handled in precise environment, in order to lay down the road map for future engagement s. In-house bookkeeping is recommended only when the resources are high but the trend is slowly shifting towards bookkeeping firms as the precision and engagement is better. Bookkeeping firms entitle to perfect turnaround time and can be held accountable for entire bookkeeping process.

In time Bookkeeping, Outsourcedbookeeping.com has expertise and appropriate resources to provide all the services like bookkeeping, accounting, payroll and taxation in cost-effective way.

Outsourced Bookkeeping : Transforming The Business Bottom-Line

Business operations are redefined every moment and the challenge lies in adopting new techniques. In order to deliver high performance, it is evident that business should be more focused on core values rather than non-core part of the establishment. Outsourced bookkeeping services will only reduce the concern and allows focusing more on central business values. Outsourcing accounts is the growing trend and has been endorsed by leading financial officers of mega corporations. Accounting outsourcing is not restricted to only big players and can be easily incorporated by all the players irrespective of business size. Outsourcing will only enhance the chance to reach the desired position in the market. Bookkeeping services will provide unique opportunity to reduce operation costs and allows infiltrating more on central business activity predominantly.

Accounting outsourcing is a larger idea to minimize the business efforts and has been ideally proved to be worthy for many business. Small business bookkeeping is easy but proves to be costly affair at the times where central business processes are more demanding. Accounting firms has evolved and proved its potential in managing the books. Outsourced accounting has more accountability than the internal accounting department as the books are dealt by professionals. Many studies suggest that business will reach its full potential only when core value is given its credible position.

An outsourced accounting firm holds the vital key as it triggers all its operations using cutting edge accounting software. Outsourcing accounts initiates to reduce the head count of the firm and allows one to dictate the terms to handle their books. Accounting outsourcing has been accepted by many mainly due to non disclosure agreement facility as it directly deals with sensitive information of the enterprise. Accounting firms mainly deal with basic transnational processes, such as accounts payable to more strategic functions, like budgets, payroll accounting, forecasts and internal audits. It covers the major portion of non core business and facilitates the business to consider central values.

Outsourcing accounts will simplify key characteristic and by empowering standardized procedures, company's financial outcome will significantly set the baseline of financial processes and better benchmark. With accounts outsourced, majority of financial process will be automated by accounting firms. Information can be gathered at point click away and reports can be generated to clear the books with perfect turnaround time. Every benchmark to accounting firms are assigned by chief financial officers, hence losing the control over the own book is out of the equation. Accounting outsourcing provides cloud environment and allows accessing the books online. With cloud environment being the strategy, saves time and money associated with documenting the process. Delivery of services will be hassle free and predominantly high quality. Inventories can accessed through every platform and solutions are provided to have greater grip on the process and one can expect to streamline management process with centralizing the data.

The real change is point click away.

Exquisite of outsourced accounts are:

• 24/7 access to accounting books

• Finance and accounting processes can be simplified

• Headcounts of the firm can be slashed

• Centralizing the data can be achieved easily

• Safe and secure environment as the books are dealt by professionals

• Operation costs are reduced

• Facilitates to concentrate more on management values

In time Accounting, Outsourcedbookeeping.com has expertise and appropriate resources to provide all the services like bookkeeping, accounting, payroll and taxation in cost-effective way.

Are Your Social Security Benefits Taxable?

How much, if any, of your Social Security benefits are taxable? It depends on your total income and marital status. Generally, if Social Security benefits are your only income, your benefits are not taxable and you probably do not need to file a federal income tax return.

If you receive income from other sources in addition to Social Security and your modified adjusted gross income is not more than the base amount for your filing status, then your benefits will also not be taxed (see below for more on base amounts).

This quick computation will help you determine whether some of your benefits are taxable:

First, add one-half of the total Social Security benefit you receive to all your other income, including any tax-exempt interest and other exclusions from income.

Then, compare this total to the base amount for your filing status.

The 2013 base amounts are:

$32,000 for married couples filing jointly
$25,000 for single, head of household, qualifying widow/widower with a dependent child or married individuals filing separately who did not live with their spouses at any time during the year
$0 for married persons filing separately who lived together during the year

According to the Social Security Administration, less than one-third of all current beneficiaries pay taxes on their benefits.

Eight Facts to Know if You Receive an IRS Letter

The IRS sends millions of letters and notices to taxpayers for a variety of reasons. Many of these letters and notices can be dealt with simply, without having to call or visit an IRS office. Here are eight things you should know about IRS notices and letters.

1. There are a number of reasons why the IRS might send you a notice. Notices may request payment, notify you of account changes, or request additional information. A notice normally covers a very specific issue about your account or tax return.

2. Each letter and notice offers specific instructions on what action you need to take.

3. If you receive a correction notice, you should review the correspondence and compare it with the information on your return.

4. If you agree with the correction to your account, then usually no reply is necessary unless a payment is due or the notice directs otherwise.

5. If you do not agree with the correction the IRS made, it is important to contact us before responding. We'll help you to prepare a written explanation to send to the IRS of why you disagree and make sure it includes any information and documents the IRS should consider that support your case. You should hear from the IRS within 30 days regarding your correspondence.

6. Most correspondence can be handled without calling or visiting an IRS office. In order to handle any issues that arise more quickly, we ask that you please have a copy of your tax return, as well as any correspondence from the IRS available when you speak to us.

7. It's important to keep copies of any correspondence with your other tax records.

8. IRS notices and letters are sent by mail. The IRS does not correspond by email about taxpayer accounts or tax returns.

If you have received a letter or notice from the IRS and have questions or concerns don't hesitate to call us.

What to Do If You Haven't Filed an Income Tax Return

Filing a past due return may not be as difficult as you think.

Taxpayers should file all tax returns that are due, regardless of whether full payment can be made with the return. Depending on an individual's circumstances, a taxpayer filing late may qualify for a payment plan. It is important, however, to know that full payment of taxes upfront saves you money.

Here's What to Do When Your Return Is Late

Gather Past Due Return Information

Gather return information and come see us. You should bring any and all information related to income and deductions for the tax years for which a return is required to be filed.

Payment Options - Ways to Make a Payment

There are several different ways to make a payment on your taxes. Payments can be made by credit card, electronic funds transfer, check, money order, cashier's check, or cash.

Payment Options - For Those Who Can't Pay in Full

Taxpayers unable to pay all taxes due on the bill are encouraged to pay as much as possible. By paying as much as possible now, the amount of interest and penalties owed will be lessened. Based on the circumstances, a taxpayer could qualify for an extension of time to pay, an installment agreement, a temporary delay, or an offer in compromise.

Taxpayers who need more time to pay can set up either a short-term payment extension or a monthly payment plan.

A short-term extension gives a taxpayer up to 120 days to pay. No fee is charged, but the late-payment penalty plus interest will apply.
A monthly payment plan or installment agreement gives a taxpayer more time to pay. However, penalties and interest will continue to be charged on the unpaid portion of the debt throughout the duration of the installment agreement/payment plan. In terms of how to pay your tax bill, it is important to review all your options; the interest rate on a loan or credit card may be lower than the combination of penalties and interest imposed by the Internal Revenue Code. You should pay as much as possible before entering into an installment agreement.

A user fee will also be charged if the installment agreement is approved. The fee, normally $105, is reduced to $52 if taxpayers agree to make their monthly payments electronically through electronic funds withdrawal. The fee is $43 for eligible low-and-moderate-income taxpayers.

What Will Happen If You Don't File Your Past Due Return or Contact the IRS

It's important to understand the ramifications of not filing a past due return and the steps that the IRS will take. Taxpayers who continue to not file a required return and fail to respond to IRS requests for a return may be considered for a variety of enforcement actions.

Tips for Safeguarding Financial Records

With the 2013 hurricane season now under way and memories of tornadoes and other natural disasters fresh in our collective minds, now is the time for individuals and businesses to safeguard their tax records by taking a few simple steps.

Take Inventory. Gather all of your documents and make an inventory list. You may find everything in a single location, but more likely than not, you'll have to hunt around to find all of your documents. Don't forget to check computer files, storage boxes, file cabinets, old and new computers and laptops, thumb drives, and external hard drives and backup disks.

Depending on how complex your finances are, you may opt for a single list or choose to make two separate lists. The first list might include items such as insurance policies, mortgages and deeds, car titles, wills, pension and retirement-plan documents, powers of attorney, medical directives, and so on. The second list might contain a list of less essential documents such as brokerage accounts, loans that have been paid off, end-of-year bank statements, and copies of old tax returns and supporting documentation.

Create a Backup Set of Records and Store Them Electronically. Keeping a backup set of records -- including, for example, bank statements, tax returns, insurance policies, etc. -- is easier than ever now that many financial institutions provide statements and documents electronically, and much financial information is available on the Internet.

Even if the original records are provided only on paper, they can be scanned and converted to a digital format. Once the documents are in electronic form, taxpayers can download them to a backup storage device, such as an external hard drive, or burn them onto a CD or DVD (don't forget to label it).

You might also consider online backup, which is the only way to ensure that data is fully protected. With online backup, files are stored in another region of the country, so that if a hurricane or other natural disaster occurs, documents remain safe. Contact us if you need assistance with this.

Visually Document Valuables. Another step you can take to prepare for disaster is to photograph or videotape the contents of your home, especially items of higher value. Call us for more help compiling a room-by-room list of belongings.

A photographic or video record can help prove the fair market value of items for insurance and casualty loss claims. Store the photos or video with a friend or family member who lives outside the area, or as part of your online document backup.

Update Emergency Plans. Emergency plans should be reviewed annually. Personal and business situations change over time, as do preparedness needs. When employers hire new employees or when a company or organization changes functions, plans should be updated accordingly and employees should be informed of the changes.

Check on Fiduciary Bonds. Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.

In time Accounting  www.outsourcedbookeeping.com has expertise and appropriate resources to provide all the services like bookkeeping, accounting, payroll and taxation in cost-effective way.

What Income Is Nontaxable?

Most types of income are taxable, but some are not. Income can include money, property or services that you receive. Here are some examples of income that are usually not taxable:

• Child support payments;
• Gifts, bequests and inheritances;
• Welfare benefits;
• Damage awards for physical injury or sickness;
• Cash rebates from a dealer or manufacturer for an item you buy; and
• Reimbursements for qualified adoption expenses.

Some income is not taxable except under certain conditions. Examples include:

Life insurance proceeds paid to you because of an insured person’s death are usually not taxable. However, if you redeem a life insurance policy for cash, any amount that is more than the cost of the policy is taxable.

Income you get from a qualified scholarship is normally not taxable. Amounts you use for certain costs, such as tuition and required course books, are not taxable. However, amounts used for room and board are taxable.

All income, such as wages and tips, is taxable unless the law specifically excludes it. This includes non-cash income from bartering, such as the exchange of property or services. Both parties must include the fair market value of goods or services received as income on their tax return.

If you received a refund, credit or offset of state or local income taxes in 2012, you may be required to report this amount. If you did not receive a 2012 Form 1099-G, check with the government agency that made the payments to you. That agency may have made the form available only in an electronic format. You will need to get instructions from the agency to retrieve this document. Report any taxable refund you received even if you did not receive Form 1099-G.

Office Management: Delegation Works

Set Yourself Free by start delegating the tasks on your table

Delegation of Tasks will free up your time and brain. You’ll actually be able to think, not just react. All of those interruptions and the discussions about the routine have trained your brain to stay in the grip of daily work. When you stop wandering in the routine chores, your brain can fill the void with a grand vision for your company.

Set Your Employees free by start delegating the tasks on your table

You've come to believe that those who report to you, might be inept, not capable, less-than-bright, or down-right stupid. You think you need to fire the whole lot. If you could shift your thinking just a little bit, you might find that they are completely whole, capable, smart, competent human beings who know what needs to done. You've somehow managed to convince them that you are the only one who has all the knowledge needed for them to complete their work. Using a different way to communicate, you’ll help them to think for themselves. They’ll learn, become creative, and stop being dependent on you. They’ll be free. So be a guide instead. Think of yourself in that way when they come to get your answers. Ask them what they think they need to do and how they’ll do it. Listen to what they have to say. Let go of your need to have things done just so. Encourage them, thank them, let them know how much you count on them to do the job right their way, not yours. You’ll be surprised at how smart and capable they are. Happy broad-picture thinking!

You might fail if you don’t figure this out and think broader.So, try it now.

Bookkeeping Tasks Done? Check!

I’m a huge fan of checklists and couldn't live without them. They get me through my day and help me make sure I’m not forgetting something vital. It also saves me from a mountain of post-it notes and little “reminders” that get lost just when you need them. So, if you’re ready to get your bookkeeping organized and on schedule, here’s a list of bookkeeping tasks to help you get organized:

Daily:

• Update bank accounts using transactions downloaded from your bank and credit card accounts.
• Open incoming postal mail, looking for any financial items, then sort as necessary.
• Enter payments received by customers and create a receipt, if necessary.
• Enter new bills from vendors.
• Enter credit/debit card transactions made.
• Enter hand-written checks.
• Document petty cash expenses.
• Update your inventory if you receive or sell items.

Weekly:

• Invoice your customers as soon as work is completed or products are delivered.
• Make bank deposits and record all deposits, including credit card deposits.
• Take your receipts out of your wallet and file, as necessary.
• Review Accounts Receivable and contact customers, as necessary.
• Review Accounts Payable and pay any bills that are due.
• Review Profit-&-Loss for anything unusual.
• If you pay estimated taxes, set aside a percentage of your income for taxes.

Monthly:

• Do the weekly bookkeeping tasks that you skipped. ;-)
• Reconcile bank and credit card accounts.
• Reconcile and replenish petty cash, as necessary.
• Generate monthly invoices, if not already generated.
• Print and review monthly reports, including Profit-&-Loss, Balance Sheet and any special reports.
• Adjust any loan payments for principal and interest.
• Reconcile and pay sales tax, if you file monthly.

Quarterly:

• Review your Accounts Receivable and write off bad debt, as necessary.
• Reconcile and pay sales tax, if you file quarterly.
• Make your quarterly estimate payments, if you pay estimated taxes.

Tips on Income Tax

Income Tax return filing is very simple in US as compared to India. Here tax forms are very simple and easy to fill up. One need not know all about taxation laws, but still can very easily file tax return. Here in US there are two types of taxes. One is the FEDERAL Tax which is something like the Income Tax in India and the other is the STATE Tax. Last day of filing the income tax return is 15th of April. Accounting year is considered from 1st of January till 31st of December. US has a Tax treaty with India. Under this Tax treaty one can file his tax return either in India or in US as per the convenience. But you need to show your income earned in either of the country.

Suppose you come to US in the middle of the year. You must be definitely having some income in India before you came to US in that particular financial year. Also some part of salary is paid to you even when you are in US. This income is taxable and hence you pay tax on that income. Generally you pay tax on this income in India as in most of the cases income tax is deducted at source. So one pays tax on the income in India. So now you are liable only for the tax on the income that you earn in US. Here there are different types of forms for different category of people. For those who are US residents and who have status of Resident Aliens, they have to file the what is called 1040EZ form (form 1040 easy). Any person who is in the US for more than 183 days continuously, gains status of Resident Alien. Any person who is in US for less than 183 days in that financial year is considered as Non Resident Alien.

Non Resident Alien will not have some Tax benefits which any US citizen or Resident Alien will have. Here in particular, Non resident Alien will not get Standard deduction on their income. Also they have to pay Tax as per the Flat rate. So basically when you file your Tax return as NR you land up paying more taxes. But you have to file 1040NR when you are having status as Non resident Alien.

For filing Tax return form one can get help from the government body which is known as IRS ( Internal Revenue Services ). This is same as Income Tax department in India. Also one has to pay tax to the state government. Each state has a different tax law for the State Tax. Booklet of information on this is available on request. Tax forms are available freely at the public places like Post office, Public library where one can get the form that he/she requires. Also, government gives special services for the people who needs the guidance. One can get this information even on phone by calling them. One can even go in person to understand the form.

Apart from these facilities provided by the government one can even go to private tax consultants. They charge somewhere between $30 to $60. They take care of every detail and one need not bother about anything. Along with the tax you are supposed to send one form called "W2" form. This form is provided by the employer to all the employees. The form contains all the information based on the salary of the person. Also all the taxes paid by the employer to the State government as well as Federal government. Details about the social security taxes and the medical taxes paid by the employer is also included in this form.

There are three copies of this form. One copy is to be sent with the State Tax form, one with the Federal Tax form and one is for the employee's personal record.

Before sending the W2 form one should check the validity of the information in it. Most important is the correct social security number. If there is any change in any of the information one should inform the employer asap. Employer is supposed to send the corrected information to IRS and also a corrected copy to the employee which is called W2C form.

Many states and cities levy hotel taxes, usually as a percentage of the room rate. For example, in New York City, which already has an 8.25% sales tax, the progressive hotel tax can raise the tariff as much as 13% more to 21.25%. When you make room reservations, ask how much tax will be added to the basic rate.

There is no US value-added tax, but sales taxes are set by most individual states, and they can range anywhere from 3% to 8.25%. In some states, localities are permitted to add their own sales taxes as well. Exactly what is taxable, however, varies from place to place. In some areas, food other essentials are not taxable, although you might pay tax for restaurant food. Luxury items such as cigarettes and alcohol are sometimes subject to an extra tax (known colloquially as a "sin tax".) as is gasoline, on the theory that car users should provide funds used to provide roads.

Accounting Outsourcing: Get Error Financial Records

 Maintaining the books of accounts is a crucial aspect inevery business. Any business is not only the realization of the vision of anentrepreneur but involves the efforts of many individuals and multipleresources. Accounting is one such resource. In order to ensure a smoothfunctioning of each segment of the business organization, a business employsvarious employees. Keeping in-house employees for accounting work can prove to be a costly affair. The employees need to be given huge salaries plus allowances like medical benefits etc. Accounting outsourcing solves this problem by providing cheap working force to maintain the books of accounts.

Maintaining the books of accounts is a monotonous process. Only experts and professionals can do this type of work. However, accounting isan important task in any business. It is essential to maintain the accuraterecord of each and every transaction on a daily basis. Most of the businesshouses have realized that if they opt for accounting outsourcing facility, theystand to gain a lot. There are multiple advantages by opting accountingoutsourcing services. The biggest advantage is that the business owner can savehundreds of dollars in salary, which have to be given to in-house employees.This is because accounting outsourcing service providers charge less for hisservices. Accounting outsourcing work is done by qualified accountants who carry out the accounting work using the latest accounting software. The accounting professionals must keep in mind that the records must be maintained accurately. A slight mistake can pave the way to big problems. Deciding the financial position of the business firm can go wrong with a single error in the books of accounts.

By handing over the work to accounting outsourcing professionals, one can be rest assured that that the accounts work will be maintained in a proper and accurate manner. The work done by accounting outsourcing professionals helps in providing instant access to financial records. Tax auditors can access to these records easily. Maintenance of proper records gives an excellent impression of the company in the eyes of auditors, investors, creditors and general public. The business organization is freed from the time and costs involved in hiring the in-house employees. This time and money can be utilized in other areas through which the business organization can reap benefits.

Accounting outsourcing services provide a comfortable and secure option for maintaining the growth and expansion of business. Since the accounting outsourcing professionals update the work on timely basis, the decision makers can move to the next step while keeping in mind the financial position of the business. It is important to hire a reliable and competent accounting outsourcing firm to carry out the accounting work for a business house. Now days, research can be done through online mode also. One can search on the internet and choose the most suitable service provider. This process is hassle free. It saves both time and efforts as there is no paperwork involved in this process. Opting for the services of accounting outsourcing professionals can give an edge to the business over others.

In time Accounting www.outsourcedbookeeping.com has expertise and appropriate resources to provide all the services like bookkeeping, accounting, payroll and taxation in cost-effective way.