2011’s IRS Hot Buttons for Form 1040

As you begin preparing for your 2011 taxes, it’s important to be aware of the areas that are being scrutinized this year.

First, here’s a quick single-stop index of terms for you from Fairmark.com:

Form 1040 and Attachments

Form 1040	U.S. Individual Income Tax Return Form Instructions Use this form if you can't use Form 1040EZ or Form 1040A.
Schedule A Schedule B	Itemized Deductions Interest and Ordinary Dividends Form Instructions The IRS combines both forms in a single electronic file, and also combines the instructions for both forms in a (different) single electronic file. Schedule A: For more information see Your Itemized Deductions. Schedule B: Most taxpayers don't need this schedule unless they have $1,500 or more of interest income, or $1,500 or more of ordinary dividend income.
Schedule C	Profit or Loss from Business Form Instructions Use to report income and deductions from a sole proprietorship (a business or profession of your own). For more information see Your Business.
Schedule C-EZ	Net Profit from Business Form & Instructions You can use this easier version of Schedule C if you don't have a loss, have business expenses of $2,500 or less, and meet other requirements set forth at the top of this form.
Schedule E	Supplemental Income and Loss Form Instructions Use to report income and deductions from rental real estate, royalties, partnerships, S corporations, estates and trusts, and residual interests in REMICs.
Schedule EIC	Earned Income Credit Qualifying Child Information Form & Instructions File this schedule if you claim the earned income credit and you have one or more qualifying children. For more details see Pub 596 below.

 

Form 1040 Red Flags

Inconsistencies or incomplete information in the following areas are hot buttons on Schedules A, C, and E that are likely to earn you a closer look, either from your tax professional or from the IRS:

Schedule A

• Unreimbursed employee business expenses claimed on Form 2106;
• Mileage;
• Travel, meals, and entertainment expenses that require documentation; and
• Receipts for cash charitable contributions and adequate documentation of noncash contributions.

Schedule C

• Gross receipts not fully reported;
• Expenses must be ordinary and necessary; and
• Expenses must be paid or incurred during the taxable year.

Schedule E

• Rental income and expenses not property reported;
• Depreciation not properly calculated; and
• Passive activity and basis limitations not properly calculated.

It’s never too early to start preparing for the April 15^th deadline. When do you usually get started with your taxes?

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QR Codes: A How-To Guide For Business Use

Are you capitalizing on the latest little bit of free Techie gadgetry that's all the rage? We’re talking about QR codes, which are one of the easiest (and cheapest) marketing tricks a business can take advantage of.

Click here for eight more low cost social media tips we posted a few weeks ago and sit back to bask in the warmth of a new piece of technology fun that doesn't cost a thing!

What is a QR Code?

QR stands for Quick Response and was created by the automotive industry to help track vehicles during the manufacturing process. A QR Code is a barcode that stores a web address of your choosing.

If you scan the one above, you'll go to our Facebook page where we just posted some fun photos from our Halloween costume competition. There are apps available in both the Android and the iPhone that let you scan a QR code to quickly go to a website.

Note: To scan the code, you’ll need an app like QR Scanner [iTunes link] for the iPhone and iPod touch, or ShopSavvy for Android devices.

Marketing uses for QR Codes:

·    QR Codes are being used at some grocery stores and restaurants to give you recipes and nutritional information about the food you're buying.

·    To give you access to coupons, both in-store and on the internet.

·    On business cards, signs and brochures. A simple little barcode allows you to give the info you need to on the card or sign and, with a single click, also help the person to visit the webpage of your choice.

·    On clothing labels (Macy's and other retailers are already using this) to tell you about that item and others you may like in the store.

·    On anything with packaging, to push people to a website, Facebook or review page.

Can I get a QR Code of my very own?

Of course! There are tons of free spots to generate a QR code. Bit.ly and Social Oomph are two of the easiest.

To use Bit.ly:

·    Visit bit.ly, write or paste in a URL address, click “Shorten,” and add .qr to the end of the generated bit.ly link (like so: http://bit.ly/tm90xj.qr).

·    Copy the modified link into a new browser window to view the QR code.

·    Once you see the code on your screen, you can print it out, send to your friends via e-mail, post on your blog, etc.

To use Social Oomph:

·    You need to sign up for a free account, whereas for Bit.ly, you could sign in with Twitter (but it still asks for your email address).

·    Once you're signed in, l00k at the left navigation bar - "Shorten URL" is the fourth choice from the top.

·    Click the Shorten URL shortcut and type or paste the address in to the "Long URL" box and click the Shorten button.

·    There's a box that says QR Code - copy the link out of there and follow all the same steps as above in the Bit.ly example.

From Wikipedia: Users with a camera phone equipped with the correct reader application can scan the image of the QR code to display text, contact information, connect to a wireless network, or open a web page in the telephone's browser. This act of linking from physical world objects is termed hardlinking or object hyperlinking. Click here for more details than you probably want on how to work QR Codes. :-)

UPDATE: In the last few weeks since we wrote this post, viruses have targeted QR Codes here and there. That doesn't mean they aren't safe but, just like email, watch where you click. More details here on how to avoid viruses.

Does this give you any new marketing ideas for your business marketing or advertising efforts? Are you already using QR Codes? What has your experience been?

BCWS would like to connect with you! Please come join us at:  

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Important Federal Tax Developments for 2011

The last few years have been extremely busy in terms of education for your accountants.

During the third quarter of 2011, there were many important federal tax developments -- enough to keep the team at BCWS hopping to stay on the front lines in terms of education.

Here are highlights of some of the most important updates:

Federal taxes

President Obama unveiled a number of tax proposals and revenue raisers in September as part of his proposed American Jobs Act.

• The Act proposes to extend and enhance the 2011 employee-side payroll tax cut
• Expand tax credits for hiring military veterans
• Extend 100 percent bonus depreciation
• The Jobs act proposes NOT to extend the Bush-era tax cuts for higher income taxpayers.

 

Worker classification

The IRS unveiled the Voluntary Classification Settlement Program (VCSP) in September. The VCSP is open to employers that currently treat their workers as independent contractors and that want to prospectively treat the workers as employees. The VCSP provides a reduced penalty framework and audit protection to qualified employers.

Cell phones

• The IRS announced that employer-provided cell phones, provided primarily for noncompensatory business reasons, will not be treated as taxable compensation to employees and that personal use is nontaxable.
• Likewise, employer reimbursements to employees who use their personal cell phones for business will not be taxable.

Exempt organizations

The IRS issued final regulations to implement redesigned Form 990, Return of Organization Exempt From Income Tax. The final regulations reflect proposed regulations and provide for the elimination of the advance ruling process for new Code Sec. 501(c)(3) organizations.

Health care reform

• The Sixth Circuit Court of Appeals upheld the constitutionality of the individual coverage mandate in the Patient Protection and Affordable Care Act (PPACA).
• In Thomas More Law Center v. Obama, CA-6, June 29, 2011, the Sixth Circuit found the health care reform law was a reasonable exercise of Congress’ authority to regulate commerce.
• However, the Eleventh Circuit Court of Appeals struck down the individual mandate in the PPACA in August.
• The Eleventh Circuit found that Congress cannot require individuals to enter into contracts with insurance providers.

 

Tax collection

The IRS increased its enforcement revenue in fiscal year (FY) 2010, the Treasury Inspector General for Tax Administration (TIGTA) reported in August. FY 2010 gross collections included approximately $1.2 trillion from individual taxes, $800 billion from employment taxes and $300 billion from corporate taxes.

The information here was culled from various issues of the CCH Federal Tax Weekly. For a complete resource for all the Federal Tax Developments for 2011, click here or here.

If you have any questions about these updates, or any tax questions, please contact our office.

 

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8 Easy Ways To Grow Your Social Media Footprint

In today’s economic climate, finding and retaining great people and great clients are two top concerns for any business. Social media is bridging the gap and helping businesses connect on both fronts.

Look at this article from Business Week back in 2008 – Social Media Will Change Your Business. There’s a fun recap at how far things have come since 2005. (Light years!) Now compare it to the L.A. Times article this week, Social Media Giving Small Firms A Boost, which cites social media as a portal to success for small businesses.

Below are eight low-cost tips to help you expand your current social media footprint. We'd love to hear from you in the comments section about how many of these you're already using.

1.  After-hours Voicemail If you haven’t added your Facebook address and Twitter username to your voicemail, you are missing out on some cheap easy marketing. Hundreds of people hear your voicemail each year and could be connecting with you online.

2.  Your website Does your company’s website have clear links to your Facebook, Twitter and LinkedIn Company page? What about to your blog? If someone finds your website, you want to make it easy for them to find the rest.

3.   Printed materials Do you have your social media information printed at the bottom of each letter and brochure you put out? What about on your business cards? It’s easy to make room in the address block for something so important. Try including this the next time you print any company materials.

4.   Email Signature Do you have all your social media icons in the signature blog on your email? It’s amazing how many people will click that link if you make it easy.

5.   Email marketing It’s a good idea to build an email list and use it for some email marketing. I didn’t say spamming. Once or twice a month is fine for connecting. Once a day is not. Be sure to include all your links as well as a periodic promotion. You’ll be surprised at the results. Tools like Constant Contact can track this for you.

6.   Signage at your workplace Do you have a sign up at your front desk or in your window telling your customers how to connect with you via social media? It’s likely you’re missing out on some contacts you could have made. When clients are waiting in your lobby, you’ve got a pretty captive audience.

7.   Business presentations Do you or other team members do any public speaking? Your social media contact information should be on each slide, in any handouts you provide and should also be verbalized by the presenter at the beginning and end of the presenation.

8.   Cross-promotion between platforms It’s a very good idea to be sure that your customers and potential employees can find you anywhere. The easiest way to do this is to list your social media information on each platform – Twitter, LinkedIn, Facebook and your blog.

Remember, “Content is King” – nothing will replace good content. But Social Media is Queen these days and small businesses should cast their social media net as widely as they can.

Are there any social media marketing tips you’d like to share? Which platform has worked best for your business?

BCWS would like to connect with you!

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Are You On Top Of Your Tax Deadlines?

The fall is a busy time in the tax season for most accountants.

BCWS is fast approaching several critical tax deadlines, which means you are too. In case you’ve ever wondered what happens this time of year, here is a breakdown of the key tax deadlines for the rest of 2011.

September 15, 2011 

• 3rd quarter estimated tax payments due for 2011 tax year.
• Final deadline to file corporate tax returns if an extension was requested. (Forms 1120, 1120A, 1120S).
• Final deadline to file trust income tax returns (Form 1041) if an extension was requested.
• Final deadline to file partnership tax returns (Form 1065) if an extension was requested.

October 3, 2011

• Final deadline for self-employed persons or employers to establish a SIMPLE IRA for the year 2011.

October 17, 2011

• Final deadline to file individual tax returns (with extension).
• Last day the IRS will accept an electronically filed tax return for 2010. If filing after October 17th, you'll need to mail in your tax return for processing.
• Final deadline to fund a SEP-IRA or solo 401(k) for tax year 2010 if you requested an automatic extension of time to file.

November 2011

• Start planning any year-end tax moves. 
• BCWS does extensive planning with our clients in November and December but if you don’t have a good accountant and need some assistance with planning, click here.

December 1, 2011

• If you are covered by an HSA-compatible health insurance policy as of December 1st, you'll be eligible to contribute the full amount to a Health Savings Account for the year.

December 31, 2011 

• Last day to make any tax moves for the year 2011.
• Last day to set up a solo 401(k) for self-employed persons.
• Marital status on this date determines your marital status for the whole year.

Source: Tax Calendars for 2011 (IRS Publication 509)

The last year has seen an unprecedented number of changes to the tax laws. It is more important than ever to be sure you have an accountant who is up to date on these changes. Your bottom line depends on it.

If you are choosing to do your taxes yourself, below are some links that can help:

• IRS 2011 Withholding Calculator
• Top 5 Tax Calculators from About.com
• Estate Tax Planning Calculators

Other great tools:

• 2011 Estimated Tax Calculator
• 1040 Tax Calendar and Tax Rates for 2011
• Payroll Deductions Calculator for 2011

Remember: Behind every good business is a great accountant.  Our goal is to help your business thrive.

BCWS wants to connect with you!  Please come join us at:

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How Important Are Presentation Skills?

At some point, all of us have to explain a concept, process or project to someone else, especially in today’s financial climate where downsizing is more common. Businesspeople are wearing more hats than ever before and not all of them fit comfortably.

One important skillset in everyone’s “business bag of tricks” is (hopefully) the Art of the Presentation. In today’s business environment, that will usually be done in conjunction with slides from PowerPoint on the PC or Keynote on the Mac.

It should be noted that three out of every four individuals suffer from speech anxiety, some so violently it qualifies as a phobia. Extreme fear of public speaking is called Glossophobia.  Here is a test if you’d like to rate your own speech anxiety.

Many presenters have visions of wowing a big crowd just by standing up and giving a presentation cold turkey. Others are more like the gentleman who clings for dear life to the podium so his voice isn’t so shaky. Or the well-meaning presenter who darts from one side of the room to the other, hoping to outrun her I-Hate-Public-Speaking nerves.

Practice and some training helps most people get over these nerves. Below are some tips to help you when it’s your turn to present at the next staff meeting (or wherever).

Tips for Effective Presentations

Below are some tips from our trainer to keep on hand as you begin to prepare your own presentations.

General Presentation

·         Check the spelling and grammar on every slide. Then check it again.

·         Practice so you can expand on abbreviated bullet points, rather than reading the slides. The text should be a cue for the presenter, not a message for the viewer.

·         If the content is complex, print out the slides so the audience can take notes.

·         Do not turn your back on the audience. If using a computer, try to position the monitor so you can speak while facing it.

·         Give a brief overview at the start. Then present the information. Finally review important points.

Special Effects

·         If sound effects are used in your presentation, wait until the sound has finished before you speak. If possible, pause for just a beat.

·         It is often more effective to have bulleted points appear one at a time so the audience listens to the presenter rather than reading the screen.

·         Use a wireless mouse or pick up the wired mouse so you can move around as you speak. A moving target (within reason) helps to keep the audience’s attention.

Color

·         Limit the number of colors on a single screen (no more than 3-4/pg).

·         Bright colors make small objects and thin lines stand out. However, some vibrant colors are difficult to read when projected. (Think of orange and red side-by-side in a pie chart. Ouch.)

·         Use no more than four colors per chart, if at all possible.

·         Check all colors on a projection screen before the actual presentation. They may project differently on different projectors and VERY differently than on your computer.

Fonts

·         Select sans-serif fonts such as Arial or Helvetica. Avoid serif fonts such as Times New Roman or Palatino as they are sometimes more difficult to read.

·         Use no font size smaller than 24 point in a large conference room.

·         Clearly label each slide. Use a larger font (35-45 points) or different color for the title.

·         Use a single sans-serif font for most of the presentation. Different colors, sizes and styles (bold, underline) are used sparingly to add impact.

·         Avoid italicized fonts as they are difficult to read quickly.

·         Use dark text on light background or light text on dark background. However, dark backgrounds sometimes make it difficult for some people to read the text.

·         Do not use all caps except for titles.

·         Try to shoot for no more than 6-8 words per line. 

·         For bullet points, use the 6 x 6 Rule. One thought per line with no more than 6 words per line and no more than 6 lines per slide. Trust me on this one.

To test the font: Stand six feet back from the monitor and see if you can read the slide.

Graphics and Design (many points here…)

·         Keep the background consistent and subtle.

·         When using charts or graphs, use only enough text to explain the graphic clearly.

·         Keep the design clean and uncluttered.

·         Leave empty space around the text and graphics.

·         Use quality clipart and use it sparingly. The graphic should relate to and enhance the topic of the slide.

·         Try to use the same style graphics throughout the presentation (e.g. cartoon, photographs)

·         Limit the number of graphics on each slide.

·         Check all graphics on a projection screen before the actual presentation

·         Avoid flashy graphics and noisy animation effects unless they relate directly to the slide. Massive animation = Death By PowerPoint (or Keynote)

·         Limit the types of transitions used (def: how a slide or bullet appears). It is often better to use only one kind so the audience knows what to expect.

What is your experience with public speaking? Is it easy or hard for you? Are there tips that help you get through it? Do you use presentation software like Keynote or PowerPoint, or something else entirely?

BCWS would like to connect with you! Please come join us at:

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