Friday, March 28, 2014

Many Retirees Face April 1 Deadline To Take Required Retirement Plan Distributions

Issue Number:    IR-2014-38

Many Retirees Face April 1 Deadline To Take Required Retirement Plan Distributions

WASHINGTON — The Internal Revenue Service today reminded taxpayers who turned 70½ during 2013 that in most cases they must start receiving required minimum distributions (RMDs) from Individual Retirement Accounts (IRAs) and workplace retirement plans by Tuesday, April 1, 2014.
The April 1 deadline applies to owners of traditional IRAs but not Roth IRAs. Normally, it also applies to participants in various workplace retirement plans, including 401(k), 403(b) and 457 plans.
The April 1 deadline only applies to the required distribution for the first year. For all subsequent years, the RMD must be made by Dec. 31. So, for example, a taxpayer who turned 70½ in 2013 and receives the first required payment on April 1, 2014 must still receive the second RMD by Dec. 31, 2014. 
Affected taxpayers who turned 70½ during 2013 must figure the RMD for the first year using their life expectancy on Dec. 31, 2013 and their account balance on Dec. 31, 2012. The trustee reports the year-end account value to the IRA owner on Form 5498 in Box 5. Worksheets and life expectancy tables for making this computation can be found in the Appendices to Publication 590.
Most taxpayers use Table III (Uniform Lifetime) to figure their RMD. For a taxpayer who turned 71 in 2013, for example, the first required distribution would be based on a life expectancy of 26.5 years. A separate table, Table II, applies to a taxpayer married to a spouse who is more than 10 years younger and is the taxpayer’s only beneficiary.
Though the April 1 deadline is mandatory for all owners of traditional IRAs and most participants in workplace retirement plans, some people with workplace plans can wait longer to receive their RMD. Usually, employees who are still working can, if their plan allows, wait until April 1 of the year after they retire to start receiving these distributions. See Tax on Excess Accumulations in Publication 575. Employees of public schools and certain tax-exempt organizations with 403(b) plan accruals before 1987 should check with their employer, plan administrator or provider to see how to treat these accruals.
The IRS encourages taxpayers to begin planning now for any distributions required during 2014. An IRA trustee must either report the amount of the RMD to the IRA owner or offer to calculate it for the owner. Often, the trustee shows the RMD amount in Box 12b on Form 5498. For a 2014 RMD, this amount would be on the 2013 Form 5498 that is normally issued in January 2014.
More information on RMDs, including answers to frequently asked questions, can be found on

That's Not MY Job

How often have you heard a co-worker say- "that's not my job, I'm not doing that" Sadly it has become common place in many offices. What happened to the team spirit and helping others, without being asked, even if it's not "in your job description"? I have seen far too many people succumb to this attitude and that is not going to help any business grow.

I was at a client the other day, the garbage was full at the desk I was using, when I left I took it out. Another lady in the office was shocked and said "why are you doing that, that's not your job, so n' so has to do that" Ok, why? I'm leaving the building anyway and my car is parked close to the dumpster, so why not pitch in? I just don't get it... Seems to me like just plain laziness not to help.

So how do we get attitudes to change? This potentially employment-ending habit is referring to the overall mindset of people who senselessly refuse taking on additional work even when it’s legitimately needed for the success of the team. There are times when we all have to do a little more to support others, even if it’s not specifically a part of our job description. That’s what it means to be on a team. Hopefully, at some point in the future, your co-workers will do the same for you.

If you have the time available and knowledge to do extra work to help out a co-worker, do it. There’s no harm in acknowledging that you’re doing him or her a favor and optimistically they will do the same for you. 

It’s okay to say “no” in the workplace. However, you should show valid reasons, My workload is full to capacity already, I’m not trained in that function, etc. and the wrong reason, It’s not my job. Make sure that you are setting limits for a legitimate purpose, not simply because you don’t feel like being bothered. Give an earnest and equitable explanation as to why you can’t help right now.

“It’s not my job,” is probably the most career damaging sentence muttered in the workplace. It’s like a toddler screaming, “No! I don’t have to do it and you can’t make me!” It doesn’t serve any useful purpose either. If you do have to say no, offer a sincere desire to resolve the problem. Suggest alternatives and help find solutions.

And remember, many states including New York, are "Employment At Will" meaning the employer can fire you at anytime for "no reason". So if your boss asks you do something that's "technically" not in your official job description and you refuse they can terminate your employment...

Tuesday, March 25, 2014

Stairway to Success

There is no elevator to success...You have to take the stairs.

Wednesday, March 19, 2014

Failure Not An Option

When you want to give up
just think of the people who would love to see you FAIL

 Don’t Give Them That Pleasure

2013 Home Office Deduction Features Simpler Option

Issue Number:    IRS Tax Tip 2014-36

Inside This Issue

2013 Home Office Deduction Features Simpler Option
If you work from home, you should learn the rules for how to claim the home office deduction. Starting this year, there is a simpler option to figure the deduction for business use of your home. The new option will save you time because it simplifies how you figure and claim the deduction. It will also make it easier for you to keep records. It does not change the rules for who may claim the deduction.
Here are six facts from the IRS about the home office deduction.
1. Generally, in order to claim a deduction for a home office, you must use a part of your home exclusively and regularly for business purposes. Also, the part of your home used for business must be:
• your principal place of business, or
• a place where you meet clients or customers in the normal course of business, or
• a separate structure not attached to your home. Examples might include a studio, garage or barn.
2. If you use the actual expense method, the home office deduction includes certain costs that you paid for your home. For example, if you rent your home, part of the rent you paid could qualify. If you own your home, part of the mortgage interest, taxes and utilities you paid could qualify. The amount you can deduct usually depends on the percentage of your home used for business.
3. Beginning with 2013 tax returns, you may be able to use the simplified option to claim the home office deduction instead of claiming actual expenses. Under this method, you multiply the allowable square footage of your office by a prescribed rate of $5. The maximum footage allowed is 300 square feet. The deduction limit using this method is $1,500 per year.
4. If your gross income from the business use of your home is less than your expenses, the deduction for some expenses may be limited.
5. If you are self-employed and choose the actual expense method, use Form 8829, Expenses for Business Use of Your Home, to figure the amount you can deduct. You claim your deduction on Schedule C, Profit or Loss From Business, if you use either the simplified or actual expense method. See theSchedule C instructions for how to report your deduction.
6. If you are an employee, you must meet additional rules to claim the deduction. For example, in addition to the above tests, your business use must also be for your employer’s convenience.
For more on this topic, see Publication 587, Business Use of Your Home. It’s available at or by calling 800-TAX-FORM (800-829-3676).

Additional IRS References:

Always consult your tax professional regarding your specific situation.

Wednesday, March 12, 2014

Albert Einstein - Quotes

“I fear the day that technology will surpass our human interaction. The world will have a generation of idiots.”- Albert Einstein

Tuesday, March 11, 2014

Small Business Health Care Tax Credit

Issue Number:    HCTT 2014-08

Inside This Issue

HealthCareTaxTip                                                                                     HCTT-2014-08
March 10, 2014

Small Business Health Care Tax Credit

The Small Business Health Care Tax Credit helps small businesses and tax-exempt organizations pay for health care coverage they offer their employees.
A small employer is eligible for the credit if it has fewer than 25 employees who work full-time, or a combination of full-time and part-time. For example, two half-time employees equal one employee for purposes of the credit.
For 2013, the average annual wages of employees must be less than $50,000, and the employer must pay a uniform percentage for all employees that is equal to at least 50% of the premium cost of the insurance coverage.
The maximum credit is 35 percent of premiums paid for small business employers and 25 percent of premiums paid for small tax-exempt employers such as charities.
If you are a small business employer who did not owe tax during the year, you can carry the credit back or forward to other tax years.
For small tax-exempt employers, the credit is refundable, so even if you have no taxable income, you may be eligible to receive the credit as a refund so long as it does not exceed your income tax withholding and Medicare tax liability.
More information

Four Tax Facts about the Health Care Law for Individuals

Issue Number:    HC-TT- 2014-06

Inside This Issue

       Four Tax Facts about the Health Care Law for Individuals
There are a few basic tips to keep in mind about the new health care law. Health insurance choices you make now may affect the income tax return you file in 2015.
1. Most people already have qualified health insurance coverage and will not need to do anything more than maintain qualified coverage throughout 2014.
2. If you do not have health insurance through your job or a government plan, you may be able to buy it through the Health Insurance Marketplace.
3. If you buy your insurance through the Marketplace, you may be eligible for an advance premium tax credit to lower your out-of-pocket monthly premiums.
4. Your 2014 tax return will ask if you had insurance coverage or qualified for an exemption.  If not, you may owe a shared responsibility payment when you file in 2015.
What should you do now?
If you or your family does not have health insurance, find out more now. Talk to your employer about the coverage they offer, or visit the Marketplace online.
Find out more about the health care law and the Marketplace at
Find out more about the premium tax credit and the shared responsibility payment at

Thursday, March 6, 2014

PayPal, How To Use The Account In QuickBooks

Paypal is a great way to send and receive payments, but many aren't quite sure how it should be set up in their QuickBooks file.  For all intents and purposes, it's a bank account and it should be treated as such.     

To set up your new PayPal account you go to your chart of accounts and click the Account button on the bottom of the window and click on New.  Name your account PayPal.

How exactly does QuickBooks and PayPal work together you ask?  You can manually enter all your PayPal transactions or you can export them from PayPal as an .iif file and import them into QuickBooks

You will also want to set PayPal up as a payment method both on the customer and vendor side.

When you're recording a payment from your customer you must also record the fees that PayPal charges. PayPal posts the money to your account net, meaning they deposit the funds after they take their fees. There are a couple ways you can post the payment; one way is to post the full amount of the payment and the record the fees as a negative amount when you are making the deposit. The other way is to record the net amount of the payment and "discount" the fee in order for the invoice to be recorded as paid in full.

If you use your PayPal account to pay your vendors you would process the payment in QuickBooks as if you were paying bills from your checking account. You can assign it a number as if it were a check, I like to put PP for PayPal in place of a number.

You will also need to link your checking account with your PayPal account in order to transfer funds from the PayPal account into your checking. PayPal also has a Debit MasterCard you can request that is linked to the funds that are in your PayPal account; makes purchasing easier and no more waiting for funds to be transferred into your checking account.

Don't forget to reconcile your PayPal account monthly just like you do your other checking and credit card accounts.

If you need additional information please contact us at

Wednesday, March 5, 2014

How to Record Non Check Payments in QuickBooks

I have been asked on several occasions how to record a check in QuickBooks when it's not a physical check, but rather a debit card or an electronic transfer. It's easier than you think... You begin with the same "write check" window to record non check transactions as you would to write a physical check. Do not use the field called Check# to insert the reference number or approval code for debit card receipts, this is not the best use the software and will only add to the confusion when you reconcile your bank account. Consider instead using the following abbreviations to identify when a transaction is a debit card purchase or some other type of transaction other than that of a physical check. If you want to record the reference number or approval code, insert it in the memo field. Make sure to uncheck the "print later" box, then you will be able to insert the abbreviation applicable to your transaction. 

Below is a list of abbreviations you can use for the “write check” screen, you can create your own list of abbreviations too. Remember to be consistent with the abbreviations you use; if not it will make reconciling a very tedious task. 

Check# is always used when issuing physical checks.

DC = Debit card purchase
DD = Direct deposit transactions (an example is direct deposit paychecks to your employees)
EFT = Electronic funds transfer (items that come out of your bank account electronically)
BP = Bill payments made with online banking
TX = Transfer between bank accounts if the receiving bank account is not a bank account that is tracked in your QuickBooks Company File (for example a transfer can be funds used for personal reason from business to personal accounts)

If you have any questions please email us:

Monday, March 3, 2014

Tax Season Serenity Prayer

Grant me Serenity to accept that I must pay taxes, Courage to file an extension, and Wisdom to hide the bodies of those who gloat that they got refunds back months ago!