By Bob Fisher on September 3, 2010
At Schlabig, we’ve paid careful attention to the support and service you need to help grow your business and increase your productivity, especially as it pertains to QuickBooks. That’s why several of our associates are both QuickBooks ProAdvisors and Advanced Certified ProAdvisors.
And here are the top 5 reasons why you should take advantage of our QuickBooks Advanced Certified ProAdvisors:
5. Not everyone can become an Advanced Certified ProAdvisor. It takes committing to an intense series of courses and testing to earn this elite certification. Approximately 1,500 of the 35,000 QuickBooks ProAdvisors carry the Advanced designation.
4. ProAdvisors must show dedication to the QuickBooks program for at least three years before becoming eligible for the Advanced Certification process.
3. No problem is too big to be conquered by an Advanced Certified ProAdvisor. Advanced Certified ProAdvisors are your go-to QuickBooks problem solvers. Their level of understanding and knowledge of the QuickBooks program, clients’ needs and dedication to their field allows them to serve clients and peers as troubleshooters and QuickBooks educators.
2. Advanced Certified ProAdvisors can streamline your accounting processes, making it an easy, efficient process for you and your business.
1. Advanced Certified ProAdvisors can tailor your QuickBooks file to suit your business, you and your goals.
Our team of Advanced Certified ProAdvisors and ProAdvisors in QuickBooks are ready to simplify your accounting processes today! Email me to set up a brief consultation.
Posted in Accounting, Bookkeeping, QuickBooks
By Debbie Petrone on August 25, 2010
Earlier this month I wrote about the 2010 suspension of the federal estate tax. Now I would like to discuss the estate tax that is still alive and well in Ohio. Only 18 states including the District of Columbia have an estate tax that is still collected. For those of us who live in Ohio, the threshold of the gross taxable estate is $338,333, which is the lowest in the United States! Ohio’s estate rate starts at 6 percent and increases to 7 percent when the taxable estate exceeds $500,000.
It is important to note that all assets, probate and non-probate, are subject to Ohio estate tax. Probate assets are assets that are appraised, inventoried, and submitted to the court for review before distribution to the heirs after payment of debts, taxes, and expenses. Non-probate assets pass directly from the decedent to the beneficiary automatically at death. Examples of non-probate assets are assets included in “living trusts,” assets transferred or payable upon death, and property held jointly with right of survivorship.
Because Ohio is only one of four states in which over 50 percent of its land is classified as “prime farmland,” agriculture is very important to the state. One of the most beneficial elections for Ohio farmers is the Qualified Farm Property Valuation election. This election determines the taxable value of the farm property based on the current agricultural use valuation (CAUV) from the county auditor’s real estate property records as an alternative to fair market value. This discounted value can greatly reduce Ohio estate tax.
Ohio also allows an estate tax deduction for qualified family-owned businesses that piggybacks on Internal Revenue Service Code section 2057. Every definition and term used for the federal estate tax Qualified Family-Owned Business Interest deduction applies to the Ohio estate tax return even if a federal return is not required to be filed.
Ohio also offers several more elections to reduce Ohio estate tax such as a marital deduction, an alternative valuation date, and qualified terminable interest property election. These elections correspond to what was in place federally prior to 2010.
Posted in Business Advisory, Tax, Trust & Estate
By Les Smeach on August 19, 2010
The cash cycle of a business is the amount of time from the point when a business makes an outlay to purchase material to the time cash is collected from the sale from using that material. This concept can be used in all types of businesses. Shortening the cash cycle can make a big improvement in cash balances and cash management.
The common components of the cash cycle are:
- Average age of Inventory or Work In Process
- Average age of Accounts Receivable
- Average age of Accounts Payable
After one knows the above three components the cash cycle is 1 + 2 – 3. For example, let’s say the average age of Inventory is 85 days, the average age of Accounts Receivable is 70 days, and the average age of Accounts Payable is 35 days, then the cash cycle would be 85 + 70 – 35 or 120 days. This means your cash is tied up on average 120 days in the form of Inventory or Accounts Receivable.
The strategy to shorten the cash cycle can be done several ways:
- Shorten the days of the cash tied up in Inventory or Work In Process
- Shorten the days of cash tied up in Accounts Receivable
- Lengthen the days before you pay Accounts Payable
- An interplay of the above three to meet yours, your customers’, and your suppliers’ needs
This is one cash management tool that can increase cash flow in a time when “Cash is King.”
Posted in Accounting, Business Advisory
By Tom Hager on August 17, 2010
This has been a hot topic since the Fall of 2009. When I first read the law I asked myself why my favorite Uncle Sam would want me to do this. Does he need the money? I’ve been in this business a long time, and the conventional wisdom has always been “defer income and accelerate deductions.” The Roth conversion goes totally against that conventional wisdom. There is roughly $7 trillion in IRAs and 401(k)s that have gone untaxed. With the current position in Washington, this is an untapped source of tax funds.
The only law that changed making the conversion possible for all people is the $100,000 limitation. Prior to the law change, only people with $100,000 or less in “modified adjusted gross income” could convert. Now anyone can convert. And if you think about it, the people who are more likely to convert are the ones that have more than $100,000 in income and have been able to save money in their IRAs or 401(k)s. The only additional benefit to converting in 2010 is the ability to pay the tax in 2011 and 2012. Otherwise, a conversion in any other year after 2010 means you have to pay the tax in total in the year of conversion. In the State of Ohio, one can reasonably expect to pay a maximum tax of 40 percent on the conversion amount. If you live in a state with no income tax, this rate will be lower.
So is the Roth Conversion a wise decision? For most individuals I would say NO!
The people a conversion makes the most sense for are those that :
- Do not need the money to live on in retirement
- Do not need the Required Minimum Distributions to support retirement income
- Have enough money outside the traditional IRA to pay the Conversion Tax-40 percent
- Have a long-time horizon (10-15 years) to let the funds accumulate
If you don’t meet all of the above conditions, in my opinion, a Roth Conversion is in most cases not advisable.
The only other individuals who should consider a Roth Conversion are those with tax attributes such as net operating loss carryovers or charitable deduction carryovers. These tax attributes help minimize the total tax paid on conversion and could have a direct impact on your decision.
Also remember in the year(s) of conversion because of the increase in income, the following may pertain:
- Medicare premiums may increase
- Social Security benefits may become taxable for years if conversion inclusion
- Medical expense deduction my be reduced or eliminated
- Dependency exemptions may be phased out
- May be subject to AMT
- Credits may be reduced (i.e. Lifetime Learning)
Starting in 2013 there is a 3.8 percent levy on investment income on singles with AGI over $200,000 and “married filing joint” with AGI over $250,000
You can find a number of conversion calculators on the web. This is a very individualized decision with many moving parts. It would be wise to seek professional help in making this decision.
One last thought: the main benefit of a Roth Conversion is being able to pay no tax in the future on any amount withdrawn. Remember: Social Security was never supposed to be taxable.
Posted in Business Advisory, Tax, Trust & Estate
By Sharon Sledzik on August 12, 2010
Get ready for more scrutiny from the IRS and paperwork hassles. A revenue producing provision (Section 9006) of the new health care bill changes two aspects of reporting on Form 1099. Currently, the form is used to report payments of over $600 to non-employees such as freelancers and independent contractors. Starting in 2012, Form 1099 must be provided to most businesses, even if they are incorporated. Also, the new rule includes payments of tangible goods, not just services. Imagine sending forms to your utility companies, office supply providers, and inventory vendors. Yikes!!
All businesses will be required to collect taxpayer identification numbers for all types of purchases. This means bookkeeping systems will have to be designed to collect and collate data needed to generate reports so forms can be completed. Accounting departments will be overwhelmed trying to close year end and get their 1099s out in time.
Regulations have yet to be finalized. Let’s hope they call for some relief and less bookkeeping. The best thing that could happen is for Congress to repeal Section 9006 of the 2010 Health Care Act. The House recently voted down a bill that had such a provision. The AICPA and OSCPA are starting to lobby for the overturn.
Join the rumble! Write your congressman and state representatives and get them to pass the Small Business Tax Relief and Retirement Restoration Act. Let’s not have a tidal wave of 1099s descend upon us in 2012. Follow this link www.stop1099.org to sign a petition and help save a tree!
Posted in Business Advisory, Tax
At Schlabig, we’ve paid careful attention to the support and service you need to help grow your business and increase your productivity, especially as it pertains to QuickBooks. That’s why several of our associates are both QuickBooks ProAdvisors and Advanced Certified ProAdvisors.
