Archive for the ‘QuickBooks’ Category

Why Should I Reconcile My Bank Account?

Tuesday, November 18th, 2014

Authored By:  Connie Ward, in our Logan Bookkeeping Department

With the convenience and popularity of online banking, the basic task of monthly bank reconciliation sometimes gets overlooked.  However, monthly reconciliation is one of the most important tasks in a business.

3 reasons you need to reconcile monthly are:

 1. Validates Data Entry  

Reconciling your accounts each month will help identify data entry errors.  One data entry error example occurs when transactions appear on the bank statement but were never entered in Quickbooks.  Another example includes transactions that were recorded in Quickbooks but were maybe coded to the incorrect bank account.  I recently had a client discover through reconciling that 2 of their contributions that were processed to fund HSA contributions were cancelled through their provider.  These transactions were entered in Quickbooks but never showed up on the bank statement.

 2. Confirms Financial Statements Are Accurate

Reconciling your bank accounts each month confirms that all transactions that have been recorded on your bank statements have been entered into Quickbooks.  This means that your financial statements reflect all sales and expenses.

 3. Accurate Tax Reporting

The financial data you enter into Quickbooks is what is used to prepare the annual tax return.  If you have not been reconciling your bank statements on a regular basis, it is likely that your financial statements are not accurate and this leads to reporting incorrect information on the tax return.

Checking accounts are not the only ones that need to be reconciled.  Credit cards, savings accounts, and loans should all be reconciled monthly.  If these accounts are all reconciled,  you will save time and money when it comes to having the tax return prepared.

Even if you have a low volume of transactions, you should still be reconciling your accounts each month.  In addition to the 3 reasons always mentioned, it can alert you to any fraudulent activity that may be occurring on your account.

For additional information, feel free to contact one of the professionals at Cook Martin Poulson, PC.

Work Opportunity Tax Credit (WOTC)

Thursday, July 18th, 2013

Authored By: Connie Ward, from the Logan Bookkeeping Department

What is WOTC?
The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers for hiring individuals from certain target groups who have consistently faced significant barriers to employment.

What does WOTC do?
WOTC helps targeted workers move from economic dependency into self-sufficiency as they earn a steady income and become contributing taxpayers, while participating employers are able to reduce their income tax liability.

How large is the tax credit?
The maximum tax credit ranges from $1,200 to $9,600, depending on the employee hired.

Eligible New Hires
A veteran who is:
• A member of a family that received SNAP benefits (food stamps) for at least a 3-month period during the 15-month period ending on the hiring date.
• Entitled to compensation for a service-connected disability:
o Hired within 1 year of discharge or release from active duty
o Unemployed at least 6 months in the year ending on the hiring date
o Unemployed:
o At least 4 weeks in the year ending on the hiring date
o At least 6 months in the year ending on the hiring date

Please note that to be considered a veteran eligible for WOTC, an individual must meet these two standards:
• Have served on active duty (not including training) in the U.S. Armed Forces for more than 180 days or have been discharged or released from active duty for a service-connected disability
• Not have a period of active duty (not including training) of more than 90 days that ended during the 60-day period ending on the hiring date

Long-term Temporary Assistance for Needy Families (TANF) Recipient:
A member of a family that meets one of the following circumstances:
• Received TANF benefits for at least 18 consecutive months ending on the hiring date.
• Received TANF benefits for at least 18 consecutive or non-consecutive months after August 5, 1997, and has a hiring date that is not more than 2 years after the end of the earliest 18-month period after August 5, 1997.
• Stopped being eligible for TANF payments during the past 2 years because a Federal or state law limited the maximum time those payments could be made.

Short-term TANF Recipient:
• A member of a family that received TANF benefits for any 9-month period during the 18-month period ending on the hiring date.

SNAP (food stamp) Recipient:
• An 18-39 year old member of a family that received Supplemental Nutrition Assistance Program (SNAP) benefits for the 6 months ending of the hiring date or received SNAP benefits for at least 3 of the 5 months ending on the hiring date.

Designated Community Resident:
• An 18-39 year old who lives within one of the federally designated Rural Renewal Counties or Empowerment Zones.

Vocational Rehabilitation Referral:
• An individual with a disability who completed or is completing rehabilitative services from a state-certified agency, an Employment Network under the Ticket to Work program, or the U.S.
Department of Veteran Affairs.

Ex-felon:
• An individual who has been convicted of a felony and has a hiring date that is not more than 1 year after the conviction or release from prison.

Supplemental Security Income (SSI) recipient:
• A recipient of SSI benefits for any month ending during the past 60-day period ending on the hire date.

Summer Youth Employee
• A 16 or 17 year-old youth who works for the employer between May 1 and September 15 and lives in an Empowerment Zone.

Employers use Form 8850 to pre-screen and to make a written request to a state workforce agency to certify an individual as a member of a targeted group.

Importing Accountant’s Changes

Friday, May 24th, 2013

Authored By: CodyWebb, Cody is an accountant in the Logan office of Cook Martin Poulson, PC. He specializes in new business setup, federal and state payroll taxation, workers compensation, QuickBooks consultation, and individual and business taxation.

How do I import the accountant change file back into my QuickBooks? If you are tired of having your QuickBooks display “Accountant’s Changes Pending” in the title bar and have now received an accountant’s change file (.qby) back from your accountant, you can use this file to automatically import your accountant’s changes into your company file.
It is important to note that only the QuickBooks Administrator can do this task. So if you have multiple users set-up within your QuickBooks, you will have to log-in as the administrator to be able to incorporate the changes.

The steps to importing the Accounting Change File are as follows:

1. Open the company file from which you created the Accountant’s Copy.

2. Choose File > Accountant’s Copy > Import Accountant’s Changes From File.

3. Locate the accountant’s changes file (.qby), from your CD, thumb drive, Desktop or wherever you have the file saved, and click Open.

4. Review your accountant’s changes. You can use the [+] or [-] to expand or collapse each change to see the details.

5. (Recommend) Click Print to print a copy of your accountant’s changes, or click Save As PDF to save a PDF file of your changes. This step is recommended so you have a record of your accountant’s changes.

6. After reviewing the changes, click Incorporate Accountant’s Changes.

7. Click OK to close the QuickBooks windows.

By following these simple steps, it will allow you to automatically incorporate the changes made by your accountant into your QuickBooks. The benefit is that your QuickBooks company file will now be up-to-date and accurate to the records and tax returns prepared by the accountant as well as saving you the time from having to make these adjustments manually.

If you have additional questions regarding QuickBooks or QuickBooks files, please feel free to contact me or the professional you work with.

How to Create a QuickBooks Accountant’s Copy

Thursday, May 16th, 2013

Authored By: CodyWebb, Cody is an accountant in the Logan office of Cook Martin Poulson, PC. He specializes in new business setup, federal and state payroll taxation, workers compensation, QuickBooks consultation, and individual and business taxation.

How do I create an Accountant’s Copy of my QuickBooks? Why should I create an Accountant’s Copy versus a backup or portable copy? These are two common questions that new users of QuickBooks face at periodic times during the year when they need to send a copy of their QuickBooks file for quarterly reports, accounting adjustments, tax projections, or tax return preparation.

An Accountant’s Copy is a version of your company file that we can use to make changes to your data while you continue to work. When we are done adjusting your file, we can send our changes back to you for easy importing into your working company file. All of the adjustments that we have made to your QuickBooks and all of the work that you have continued to do easily incorporate together after we send the changes back to you. These adjustments can only be incorporated automatically back into your QuickBooks if you send us an Accountant’s Copy.

The steps to creating an Accountant’s Copy are as follows:

1. Choose File > Accountant’s Copy > Save File.

2. Confirm you want to create an Accountant’s Copy and click Next.

3. Choose a dividing date.
• You will be able to work with all transactions dated after the dividing date and we will be able to work with transactions prior to that date. For example, for year-end tax preparation purposes you would select December 31 of the prior year as the dividing date. For quarterly reports or periodic accounting adjustments, you would select the last day of the previous month or quarter.

4. Click Next.

5. (Optional) Change the suggested location for the file and the filename that QuickBooks suggests for the Accountant’s Copy. The file must have a .qbx extension. You need to choose the desired location of where you will save the Accountant’s Copy. I have often found that it is easiest to save it to your Desktop and then move it to your Cook Martin Poulson Sharefile account or to a CD, flash drive, email attachment, or link that you receive from us.

6. Click Save.

7. Give the Accountant’s Copy transfer file (.qbx) to your accountant and continue to work.

After saving the Accountant’s copy, QuickBooks displays “Accountant’s Changes Pending” in the title bar and will remain there until you incorporate the changes back from the accountant or you remove the restrictions. Be aware that if you remove the restrictions before the accountant sends back the changes, you will no longer be able to incorporate any adjustments made by the accountant automatically into your QuickBooks.

You should be aware that there are some limitations to the things that we can adjust with an Accountant’s Copy file, and thus it may not be suitable for all companies. For example, we cannot add, edit, void or delete payroll, estimates, sales orders, transfers of funds between accounts, or inventory build assemblies.

Your accountant can tell you if they prefer you to upload an Accountant’s Copy or backup file to us but in most cases the Accountant’s Copy will be the preferred option.

If you have additional questions regarding QuickBooks or QuickBooks files, please feel free to contact the professional you work with.

Reporting Payments on Form 1099

Wednesday, October 10th, 2012

Authored By: Janell Liechty, Bookkeeper in our Logan Office.

We get questions quite often from clients as to whether they need to issue a 1099 to someone and what are the rules for issuing 1099’s so I thought I’d go over that subject a little. Form 1099 is used to report different types of taxable income. There are several types of 1099’s. The letters listed behind the 1099 indicate what type of form it is. The IRS requires taxpayers to issue 1099’s in order to encourage other taxpayers to recognize income and comply with filing requirements.

• Form 1099-B reports the sale of stocks, bonds, mutual funds and other securities.
• Form 1099-C reports debts that were canceled.
• Form 1099-DIV reports dividends, qualified dividends, and capital gains distributions.
• Form 1099-G reports payments from state governments such as unemployment payments and state tax refunds.
• 1099-I reports interest earned
• Form 1099-Misc reports various types of income like payments for rent, royalties, and non-employee compensation.
• Form 1099-MSA reports distributions for a medical savings account.
• Form 1099-OID reports original issue discount income
• Form 1099-PATR reports patronage dividends paid by a cooperative.
• Form 1099-R reports distributions from a retirement plan such as a IRA, 401(k) or pension, life insurance proceeds and annuity payments.
• Form 1099-S reports proceeds from the sale of real estate.
• Form SSA-1099 reports Social Security benefits paid.
• Form RRB-1099 reports railroad retirement benefits.

For most of our clients, Form 1099-Misc, is what you’ll need to consider issuing for payments made to individuals, vendors, subcontractors, and independent contractors if you paid them $600.00 or more during the year in the following circumstances:

• cash payments to fishermen
• crop insurance proceeds
• medical and health care payments
• prizes and awards
• proceeds paid to attorneys
• rents
• services (contract labor) (including parts and materials)
• other types of payments not covered by another information reporting document

If the recipient that you’ve paid is incorporated or a LLC that has made the election to be taxed as a corporation then you do not need to issue them a 1099 but if they are an individual, partnership or LLC treated as a partnership or sole proprietorship, then you do issue one. An easy way to determine if you are required to issue a 1099 to the recipient is to require them to provide you with a form W-9. We find it helpful to require the W-9 before you pay them. One exception is for payments to attorneys. You’ll need to issue a 1099 to them even if they are incorporated. If you’re unsure if you need to issue a 1099, please contact us. You can also go to the Internal Revenue’s website at www.irs.gov/form1099misc where it gives more in-depth information on 1099-Misc.

 

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Fat Boy Ice Cream

Utah Accountant and CPA

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