MEDICAL PREMIUMS ON W-2

Q: Larry, I heard for someone that we are going to have to put any medical/dental premiums that we pay for our employees on the W2s starting this year.  Do you have any information about this or know where I would be able to look that up?  We just want to make sure that we have it covered sooner rather than later.

A: As long as a business had less than 250 employees in 2011, then there is relief, in that, there will not be a requirement to report in 2012.

Use this link to see Q and A sheet on IRS website - CLICK HERE

 

QUICKBOOKS SETUP ERROR & HOW TO FIX IT #3

Most errors can be avoided simply by planning your setup and knowing what your business needs are. Here is another QuickBooks setup error that we see the most AND how to fix it.

Vendors

Redundant or duplicate: The same as with the Chart of Accounts, you don’t want bloated Vendors list. So periodically review the list for duplicates and merge the Vendors.

Vendors properly not set up for 1099 reporting: Check with your accountant/tax profession regarding the necessary paperwork and filing requirements but you can (and should) track 1099 amounts in QuickBooks. When done properly, year-end 1099 filing is simple.

Remember, standing in a garage, doesn’t make you a car… knowing a bit about QuickBooks and being able to navigate it, does not make you an accounting expert. Don’t be afraid to look for or ask for some help.

CHANGES IN THE TANNING TAX FOR SINGLE MEMBER LLC’S

The tanning tax deposit rules are changing for some types of businesses.  Starting after June 30, 2012, one-owner LLCs must deposit tax under the entity’s name and ID number.

Previously, these entities had been allowed to make deposits using the owner’s name and ID number. The change affects one-owner LLCs and qualified S firm subsidiaries that are otherwise treated for tax purposes as entities not separate from their owners.

So these firms will have to obtain their own tax identification numbers from IRS before filing Form 720. The change affects 720s due on or after Oct. 31, 2012.

IT IS NOT THE 1% THAT ARE STRANGLING THE ECONOMY

Everybody should have a favorite economist. Mine is Professor Ernie Goss of Creighton University.  The following is from his July newsletter.

The 25%, Not the 1%, Are Strangling the U.S. Economy

It's not the 1 percent that is siphoning U.S. economic resources. It is the 25 percent--the portion of the U.S. population born between 1946 and 1964 or, baby boomers like me. Not only are we 25 percenters leaving the workforce at very high rates, (consuming instead of producing), we are draining the U.S. Treasury via higher Social Security (SS) benefits and greater Medicare spending. Over the past decade, SS outlays soared by 69 percent and Medicare expenditures rocketed by 135 percent, enlarging the nation's debt to $16 trillion. This debt which is the largest in the galaxy and 100 percent of GDP will ultimately be paid for by the 60 percenters (those born after 1964). We need to take steps to reduce this wealth transfer from young to old by: (1) raising the SS retirement age from 67 to 70 by increasing it 2 months per year, (2) increasing the Medicare eligibility age from 65 to 67 and, (3) cut the yearly SS inflation adjustment by 1 percent. Taking these actions would save $360-$400 billion between 2012 and 2021. Additionally to reverse the aging of the nation’s labor market, the U.S. should expand legal immigration allowing younger workers and their families to enter the U.S. Latest U.S. Census data show the median age is 38.3 for Whites, 35.3 for Asians and 27.4 for Hispanics. By increasing legal immigration and slowing the growth in SS and Medicare spending, the U.S. would avoid the stagnation and looming economic calamities threatening Japan and Europe as a result of their aging populations and expanding pensions/healthcare payments to baby boomers. Ernie Goss.

I found his comments on a “fix” to the deficit that the Social Security fund very interesting.  Last fall I attended the National Tax Conference in Washington D.C.  One of the sessions was on Social Security and Medicare, the speaker, Theodore Sarenski echoed some of the advise that Dr. Goss presented.  If this happened, according to Sarenski, no person over 55 would be see their benefits change and people under 55 would still receive at least 85% of their benefits. 

FEDERAL STUDENT AID NEW WEBSITE

Federal Student Aid launched a new streamlined website, StudentAid.gov, which will assist in making it easier for students, parents, and borrowers to navigate the financial aid process. These new resources offer more than just information in an easy-to-read format; they also feature interactive tools, such as videos and infographics, to help answer the most frequently asked questions about financial aid.

StudentAid.gov is the first step to develop a single point of entry for students accessing federal student aid information, applying for federal aid, repaying student loans, and navigating the college decision-making process.

QUICKBOOKS SETUP ERROR & HOW TO FIX IT #2

This is my second Quickbooks tip posting:
QuickBooks is driven by lists – quite a few of them. You have to know your business and know what the lists mean so that you can efficiently and effectively create a database.  Here is another QuickBooks setup error that we see the most AND how to fix it.

Customers and jobs

Customer and job organization not appropriate for reporting needs: Customer/Jobs don’t work for every QuickBooks user. In my experience, I’ve seen it used most often in construction, home improvement or real estate/property management companies where there are multiple & concurrent “jobs” worked for each customer that the business owner would like to track separately (typically for profitability reporting reasons). If this does not describe you and your business, then the extra level of “Jobs” is inappropriate for your reporting needs and is probably overkill.

Redundant or duplicate: Again, the same as with the Chart of Accounts, you don’t want a bloated list of Customers/Jobs. Periodically review the list for duplicates and merge the Customers.

Jobs not properly assigned to customers: If you use Jobs, you want to make sure that they are properly assigned to Customers. Periodically review your customer & job list to make sure that everything is as it should be.

 Don’t be afraid to ask for some help.

THE COST OF A BAD HIRE

If you have employees I am sure that you have at least once made a bad hire.  I know that it has happened to me.  The key is to make sure that you have systems in place and that you do background checks.  I even know of situations (this is plural) where employers have hired employees that have been fired because they were dishonest.   

The costs of a bad hire are staggering. A recent survey by Career Builder reports more than two-thirds of employers were affected by a bad hire last year, according to AOL Jobs. Of nearly 2,700 employers surveyed, 41% estimate a single bad hire cost $25,000; a quarter estimate a bad choice cost $50,000 or more — not to mention the demoralizing effect of the issue on other employees and on the new hire. Losing a job is one of the most stressful events a human can experience. 

Remember to do your homework.