Larry, I ran across your blog and was wondering if you could answer a question for me. I was interviewing an accountant for my taxes and he was telling me that the only choice for year-end for a C Corp fiscal year is either Oct. 1st or Jan. 1st. I could not find the info on the IRS web site. Thanks for your time.
Kyle
Kyle, a "C" corporation can have a fiscal year-ending at the end of any calendar month. Either there is a misunderstanding, or you need to find yourself a professional tax advisor who is a little more knowledgeable about such basic matters. If this is what the accountant really thinks, consider yourself lucky that this person revealed his ignorance so early in your potential relationship.
Good luck.
Larry Kopsa CPA
Thursday, April 30, 2009
GOOD NEWS - CONSUMER CONFIDENCE IS UP
Consumer confidence climbs to highest level since November
Consumer confidence in the U.S. exceeded the predictions of economists in April, the Conference Board reported. The Consumer Confidence Index, a widely followed benchmark of how consumers feel about the economy, reached its highest level since November. Google/The Associated Press
Consumer confidence in the U.S. exceeded the predictions of economists in April, the Conference Board reported. The Consumer Confidence Index, a widely followed benchmark of how consumers feel about the economy, reached its highest level since November. Google/The Associated Press
Wednesday, April 29, 2009
QUESTION ON CHANGING A C-CORP YEAR-END
Hi – we have a c-corp small business with a year-end of June 30 and would like to change that to a calendar year. Any advice on what the procedures are?
Derek
Derek, I hope all is well. First of all, make sure that you check with your tax advisor on the wisdom of changing year-ends. We usually like to have a different corporate year-end than our personal year-end. Different reporting periods allows us to move some money back and forth between the taxing entities and therefore postpone paying tax.
For example, if the corporate income is high on June 15th, the corporation could pay a bonus to the individual prior to June 30th and get a deduction which reduces the corporate tax. The individual, on the other hand, would not have to pay tax on the bonus until April 15th of the next year when he or she files the return.
Changing year-ends is fairly easy. The IRS does not even require advanced approval to change year-ends. All you have to do is file the short year tax return.
Again, you must review this with your tax advisor because there is annualization of income that must take place, which is not a big deal but you better check it out before you file the short year return. In addition, if you have any loss carry-overs or other attributes they might be impacted by filing for the new year-end.
Good Luck
Larry Kopsa CPA
Derek
Derek, I hope all is well. First of all, make sure that you check with your tax advisor on the wisdom of changing year-ends. We usually like to have a different corporate year-end than our personal year-end. Different reporting periods allows us to move some money back and forth between the taxing entities and therefore postpone paying tax.
For example, if the corporate income is high on June 15th, the corporation could pay a bonus to the individual prior to June 30th and get a deduction which reduces the corporate tax. The individual, on the other hand, would not have to pay tax on the bonus until April 15th of the next year when he or she files the return.
Changing year-ends is fairly easy. The IRS does not even require advanced approval to change year-ends. All you have to do is file the short year tax return.
Again, you must review this with your tax advisor because there is annualization of income that must take place, which is not a big deal but you better check it out before you file the short year return. In addition, if you have any loss carry-overs or other attributes they might be impacted by filing for the new year-end.
Good Luck
Larry Kopsa CPA
Tuesday, April 28, 2009
WHERE IS MY REFUND?
I filed my 2008 taxes and was supposed to get a refund. Is there a way that I can check the status?
Ted
Ted, the IRS has made checking the status of your refund pretty easy. If you already filed your federal tax return and are due a refund, you can check the status of your refund online. Just go to www.IRS.gov and click on Where's My Refund?
Where’s My Refund? gives you online access to your refund information. If you e-file, you can get refund information 72 hours after IRS acknowledges receipt of your return. If you file a paper return, refund information will be available within three to four weeks.
When checking the status of your refund, have your federal tax return handy. To get your personalized refund information you must enter:
Ted
Ted, the IRS has made checking the status of your refund pretty easy. If you already filed your federal tax return and are due a refund, you can check the status of your refund online. Just go to www.IRS.gov and click on Where's My Refund?
Where’s My Refund? gives you online access to your refund information. If you e-file, you can get refund information 72 hours after IRS acknowledges receipt of your return. If you file a paper return, refund information will be available within three to four weeks.
When checking the status of your refund, have your federal tax return handy. To get your personalized refund information you must enter:
- Your Social Security Number (or Individual Taxpayer Identification Number).
- Filing status (Single, Married Filing Joint Return, Married Filing Separate Return, Head of Household, or Qualifying Widow(er)).
- Exact refund amount shown on your tax return.
I hope that you get your refund soon.
Larry Kopsa CPA
Monday, April 27, 2009
COMMENT ON KINDERGARTEN DIVERSON ARTICLE
I recently did a posting about an article that a member of my staff received in her child's kindergarten newspaper. I thought it was great that the salon that posted the article was educating consumers about diversion. What better place to get to young parents than a kindergarten newspaper.
After posting, I received the following from a reader that took issue with the article. As stated in my response, I think that he missed the point of my article
Larry Kopsa CPA
The following is the reader's response. (LK note: I have listed John's comments in red.)
"Do you really buy into this? Most professionals have learned to read right through this spin! Do you do programs for Mitchell distributors? If so I guess I get it? These products and many more are going through a web that is designed for these diverting companies to avoid being found out that they are turning their heads, allowing diversion and gaining the sales. It's just a matter of greed.
Stay focused on the areas that you are providing benefits to the profession, don't go and boost these companies esteem. You just don't look good.
This is from your newsletter.
After posting, I received the following from a reader that took issue with the article. As stated in my response, I think that he missed the point of my article
Larry Kopsa CPA
The following is the reader's response. (LK note: I have listed John's comments in red.)
"Do you really buy into this? Most professionals have learned to read right through this spin! Do you do programs for Mitchell distributors? If so I guess I get it? These products and many more are going through a web that is designed for these diverting companies to avoid being found out that they are turning their heads, allowing diversion and gaining the sales. It's just a matter of greed.
Stay focused on the areas that you are providing benefits to the profession, don't go and boost these companies esteem. You just don't look good.
This is from your newsletter.
- The next time you buy a professional hair product in a drugstore or grocery store, you may want to think twice. It’s either diverted or counterfeit, and using these products could put your health at risk. The professional hair care industry identifies product as “diverted” when a professional-use-only product or a product that requires a professional recommendation shows up on grocery, drug or Internet store shelves.
- In most cases, manufacturers will guarantee professional hair care products only when purchased from a hair salon. John Paul Mitchell Systems, manufacturer of Paul Mitchell, is one such company. “The professional salon industry is our only business,” said John Paul DeJoria, Chairman and CEO of John Paul Mitchell Systems. “If you buy Paul Mitchell at a grocery store, drug store or from the Internet, it’s not authentic and it’s not guaranteed.”
Comment from John: This is a joke! Go to CVS, do you think they are buying counterfeit products every week?
- It’s a Health Hazard. How diverted products reach mass retail shelves is a dark story. Generally acquired through the gray or black market, diverted products are tampered with, so what’s on the label is not necessarily what’s in the bottle.
Comment from John: Are you kidding me? Go JP.
- Counterfeit products are even more dangerous independent tests run by FOX News found toxic levels of bacteria in the counterfeit products it analyzed. More importantly, these types of diverted products can make their users sick enough to require medical care. (Source: FOX News, June 2003 and Independent laboratory analysis.)
Comment from John: Whose products? This is the only story Mitchell was able to pull off way back in 2003.
- It’s a Steal – Not a Deal Buying diverted products can actually cost more than if you purchase authentic products at a hair salon. The product passes through so many hands before reaching a mass retailer’s shelves that a single bottle can cost as much as $3 more than if it was purchased in a hair salon.
It’s Professional for a reason. Manufacturers invest millions of dollars to train hairdressers on the proper use of professional salon products. In turn, hairdressers share their expertise when recommending products clients can use for their hair type and condition.
Thanks,
John
April 27, 2009
John, I appreciate your comments. Your point is valid. As you well know, we see articles all the time blaming the manufacturer or the distributors for diverted products. Vindicating the manufacturers was not my point for posting the article. The reason I posted the article was not for the professional behind the chair, but rather the average consumer. How many average consumers know about diversion? My guess is very few. The salon that placed this article in the school newspaper was, like myself, trying to educate the average consumer. I say ‘hats off’ to the salon for running this article!
Larry Kopsa CPA
MY 2008 INCOME IS HIGHER. DO I STILL GET A STIMULUS CHECK FOR 2009?
I had an unusual situation in 2008 that boosted my income from all sources (gross and AGI) by about $15,000 over normal (to over $100K). $11,000 of that went direct to Uncle Sam (I withdrew $ from IRA to pay tax bill on 2007). Does that mean a zero stimulus package payment for me and my husband? Is there an appeals process for special situations?
Nancy
Nancy, sorry, no appeals are built in, but you may not be in a bad spot. I presume that you are referring to the 2009 stimulus, not the 2008 stimulus. (It would seem that we should be pretty stimulated with all of this so called stimulus that they are throwing around). Anyway, here is the deal on the 2009 law.
· Since you are an employee, you will get the stimulus through a reduction in your payroll taxes. The money will come though a higher payroll check estimated at about $13 per month. You will get this no matter what.
· The IRS gave your employer new payroll withholding payments. You should probably have seen an increase in your net payroll check.
· When you file your 2009 tax return (by April 15th of 2010), you or your tax preparer will determine whether or not you qualified. If you did not qualify, you will have to pay the money back with your 2009 1040.
· Since you are married, in order to qualify your adjusted gross income (AGI) for 2009 would have to be under $150,000. The additional money that you made in 2008 makes no difference; it is just your 2009 AGI.
· If you are wondering what your AGI is, for 2008 it is on line 87 on the bottom of page one of your 1040.
Please let me know if you have any other questions, or if your question was on the 2008 stimulus. It is a pleasure serving you.
Larry Kopsa CPA
Nancy
Nancy, sorry, no appeals are built in, but you may not be in a bad spot. I presume that you are referring to the 2009 stimulus, not the 2008 stimulus. (It would seem that we should be pretty stimulated with all of this so called stimulus that they are throwing around). Anyway, here is the deal on the 2009 law.
· Since you are an employee, you will get the stimulus through a reduction in your payroll taxes. The money will come though a higher payroll check estimated at about $13 per month. You will get this no matter what.
· The IRS gave your employer new payroll withholding payments. You should probably have seen an increase in your net payroll check.
· When you file your 2009 tax return (by April 15th of 2010), you or your tax preparer will determine whether or not you qualified. If you did not qualify, you will have to pay the money back with your 2009 1040.
· Since you are married, in order to qualify your adjusted gross income (AGI) for 2009 would have to be under $150,000. The additional money that you made in 2008 makes no difference; it is just your 2009 AGI.
· If you are wondering what your AGI is, for 2008 it is on line 87 on the bottom of page one of your 1040.
Please let me know if you have any other questions, or if your question was on the 2008 stimulus. It is a pleasure serving you.
Larry Kopsa CPA
Friday, April 24, 2009
WOW!!! A DIVERSON ARTICLE IN A KINDERGARTEN NEWSPAPER
You can learn about diversion in a kindergarten school paper.
Hats need to go off to GG & Company of Omaha, Nebraska. Christina Larson, CPA, one of our great staff people, was for some reason looking at her kindergarten daughter’s school news paper. There in the middle of the school newspaper was an article entitled “CAUTION: This shampoo may be hazardous to your health.” The content was provided by GG & Co., a full service salon.
I like to have these blog entries fairly small and easy to read so I would rather link you to the article, but unfortunately the kindergarten newspaper is not online so I have to reprint the whole thing.
The next time you buy a professional hair product in a drugstore or grocery store, you may want to think twice. It’s either diverted or counterfeit, and using these products could put your health at risk.
The professional hair care industry identifies product as “diverted” when a professional-use-only product or a product that requires a professional recommendation shows up on grocery, drug or Internet store shelves. In most cases, manufacturers will guarantee professional hair care products only when purchased from a hair salon. John Paul Mitchell Systems, manufacturer of Paul Mitchell, is one such company.
“The professional salon industry is our only business,” said John Paul DeJoria, Chairman and CEO of John Paul Mitchell Systems. “If you buy Paul Mitchell at a grocery store, drug store or from the internet, it’s not authentic and it’s not guaranteed.”
It’s a Health Hazard
How diverted products reach mass retail shelves is a dark story. Generally acquired through the gray or black market, diverted products are tampered with, so what’s on the label is not necessarily what’s in the bottle.
Counterfeit products are even more dangerous independent tests run by FOX News found toxic levels of bacteria in the counterfeit products it analyzed. More importantly, these types of diverted products can make their users sick enough to require medical care. (Source: FOX News, June 2003 and Independent laboratory analysis.)
It’s a Steal – Not a Deal
Buying diverted products can actually cost more than if you purchase authentic products at a hair salon. The product passes through so many hands before reaching a mass retailer’s shelves that a single bottle can cost as much as $3 more than if it was purchased in a hair salon.
It’s Professional for a Reason
Manufacturers invest millions of dollars to train hairdressers on the proper use of professional salon products. In turn, hairdressers share their expertise when recommending products clients can use for their hair type and condition.
Hats need to go off to GG & Company of Omaha, Nebraska. Christina Larson, CPA, one of our great staff people, was for some reason looking at her kindergarten daughter’s school news paper. There in the middle of the school newspaper was an article entitled “CAUTION: This shampoo may be hazardous to your health.” The content was provided by GG & Co., a full service salon.
I like to have these blog entries fairly small and easy to read so I would rather link you to the article, but unfortunately the kindergarten newspaper is not online so I have to reprint the whole thing.
The next time you buy a professional hair product in a drugstore or grocery store, you may want to think twice. It’s either diverted or counterfeit, and using these products could put your health at risk.
The professional hair care industry identifies product as “diverted” when a professional-use-only product or a product that requires a professional recommendation shows up on grocery, drug or Internet store shelves. In most cases, manufacturers will guarantee professional hair care products only when purchased from a hair salon. John Paul Mitchell Systems, manufacturer of Paul Mitchell, is one such company.
“The professional salon industry is our only business,” said John Paul DeJoria, Chairman and CEO of John Paul Mitchell Systems. “If you buy Paul Mitchell at a grocery store, drug store or from the internet, it’s not authentic and it’s not guaranteed.”
It’s a Health Hazard
How diverted products reach mass retail shelves is a dark story. Generally acquired through the gray or black market, diverted products are tampered with, so what’s on the label is not necessarily what’s in the bottle.
Counterfeit products are even more dangerous independent tests run by FOX News found toxic levels of bacteria in the counterfeit products it analyzed. More importantly, these types of diverted products can make their users sick enough to require medical care. (Source: FOX News, June 2003 and Independent laboratory analysis.)
It’s a Steal – Not a Deal
Buying diverted products can actually cost more than if you purchase authentic products at a hair salon. The product passes through so many hands before reaching a mass retailer’s shelves that a single bottle can cost as much as $3 more than if it was purchased in a hair salon.
It’s Professional for a Reason
Manufacturers invest millions of dollars to train hairdressers on the proper use of professional salon products. In turn, hairdressers share their expertise when recommending products clients can use for their hair type and condition.
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