The end of the year is right around the corner. Are you ready?

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(From Left) Brian Godfroid, Julio Davila, Bill Kruse, Abby Romberger, Blake Will, Jessica Murphy

What should small business owners consider before closing their books and heading home for Christmas?  Because of the diversity in small business transactions, a more complete answer can be provided if you’d like to call our office.  However, some of the big picture items which are missed by small business owners are as follows:

1.  Personal use of a business owned automobile.  Go ahead and make at least a rough estimate of the miles in you daily commute.  Include at least these miles in your W2 at the end of the year.    Remember you can’t count the commute as business miles and IRS guidance requires this to be included in your W2.

2.  Health insurance for an S-Corp owner.  If you are an S-Corporation owner, make sure your final W2 includes your personal health insurance cost.  You will not be charged social security tax on the cost of the insurance if it is done properly.  Another IRS required W2 item.

3.  Small business (less than 50 FTE’s) health insurance plans.  The Affordable Care Act is still being tweaked for who or what is required for 2014, however, small businesses should be contacting their health insurance broker and make sure they get their plan renewed prior to December 31 to ensure you miss the big rate increases heading down the pike for coverage of pre-existing conditions.

4.  Prior year Adjusting Journal Entries.  You probably received adjusting journal entries with your 2012 tax return.  If these have not been posted, then your balance sheet will not agree to the 2012 tax return.  Your 2013 return preparation will take longer as we try to figure out why.

5.  Reconcile payroll.  The social security tax hot button is still on fire with the IRS.  Make sure you have reconciled your payroll Form 940 and 941 to your income statement and balance sheet.  This is the first thing they ask for when beginning an audit.  Do it now while the year is fresh.

6.  File Form 1099.  Be careful with contractors and other service providers who have not filed out the appropriate forms for filing Form 1099.  This is another hot button with the Service, so making sure you have filed ALL  of these as necessary is very important.

Getting started early.  Your 2009 return will fall off the grid with the filing of 2013, so let’s file early!  Give us a call and let’s get on your schedule for early January or February. We can be reached at 314-993-4285.

The New IRS and Contracted Employees

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The new IRS and Contract Employees!

2012 is a new year. The same technology which has aided each of us in accomplishing amazing personal and business goals in 2011 is no longer the same in 2012, it continues to change. Technology is more interactive, capable of intuitive manipulation and interwoven into the very framework of our personal and business lives.

As we consider these grand marches, please do not believe the Internal Revenue Service (IRS) has stayed connected with the past. The IRS continues to progress in a massive installation and upgrade of it’s technology and the people who use it. No longer a cost center, the IRS is now a profit center for “the people”.

Small business should prepare itself to be more diligent with filing informational and tax forms. The most important area of consideration is in employment taxes. The IRS is increasing their technological scrutiny of forms and their interconnectivity. Payroll forms 940, 941, and W2 should all tie together, but often enough they do not.

This scrutiny involves all aspects of employment, including and of special interest, contract employees. If you or your business rely on contract labor, check your facts of employment against the contractor test to make sure you are claiming them appropriately.

Do not believe the IRS is the same entity of 2011 or 2010. The Service is faster, smarter, and better equiped to do their job than ever before. The newer smarter IRS has a voracious appetite to assess penalty and interest and is reluctant to abate after assessment.

Comparing the IRS of today with that of five years ago would be like comparing my first Radio Shack computer in 1984 to my son’s Xbox-Live.

Are You Planning for the Changes in Estate Taxes?

Last chance to REALLY plan for the Future:

On December 31, 2012 an opportunity to plan for the future of your family expires. By now we have all heard about the change in the estate tax, as the line goes, Republicans want the tax on estates eliminated and Democrats want to tax all of the value of an estate for redistribution. the only sure bet now is that the estate tax provisions are going to change.

The only real consensus in the industry holds that Congress will take some sort of action on the estate tax issue, however, few believe the current estate provisions will be renewed at present levels.

We believe You should be prepared regardless of which way the wind blows. And we believe much of the industry is missing the REAL opportunity the current law allows.

Generational skipping.

We are able to structure your estate, now, to gift valuable assets to your heirs and still retain control. Under current law, we can accomplish this goal to a successive generation without tax. We of course won’t “skip” your kids in the sense of allowing them to benefit from your assets when you no longer do, but we can skip the estate tax for you kids and allow them to benefit.

Interesting? Let us show you how.