For example, if you buy a computer for your small business, under Section 179 you can deduct the full cost of that computer in the year of purchase rather then spread the cost out over five years as required by the IRS.

So what types of small business property does Section 179 apply to?  The property must be “tangible, depreciable, personal property which is acquired for use in the active conduct of a trade or business.”  If you give us a call one of our Fort Wayne CPA’s can explain what the IRS means with this statement!

There are annual limits on the 179 deductions your Fort Wayne small business can elect to use.  The maximum section 179 deduction for 2011 is $250,000.  Since section 179 is targeted towards small businesses this annual limit is reduced by the amount by which the cost of section 179 property placed in service in the tax year exceeds $800,000.

For the last several years a large majority of tax preparers and business owners have aggressively used accelerated depreciation and section 179 in order to lower their current year taxes.  We do not believe it is always appopriate to use section 179.  We carefully consider the tax situation of our clients when making this determination.

Please give one of our Certified Public Accountants a call at 260-338-0833 today!

Mike Sylvester, CPA/BV, MBA “Accredited in Business Valuation”

Congress extended the payroll tax cut for the first two months of 2012 – meaning employees only pay 4.2% social security instead of the normal 6.2%.  This tax cut was set to expire, but of course Congress is trying to get it extended at “the last minute.”

So don’t let your payroll be out of date, every time you are prompted to update your payroll tax tables, please make sure you do so.  Additionally, I highly recommend you update your payroll tax tables before you run your first March payroll.  To update your payroll tax tables, go to the employee menu at the top of the page and then select Get Payroll Updates.

If you have any questions regarding any payroll taxes, please feel free to give us a call at 260-338-0833 and ask for Brent or Karena!

Karena Sylvester, CPA

1. It is difficult to get it done in one weekend.
2. The bookkeeping is often wrong because items are misplaced or the business owner cannot remember what each receipt was for.

The largest problem with this method is the business owner has no idea exactly how much money they have made or lost until early the following year.  Further they do not know which expense categories increased, which revenue stream decreased, etc.

Bookkeeping should be done on a regular basis.  Our Fort Wayne CPA’s handle the bookkeeping for many of our small business clients in northeast Indiana.  We have clients we handle weekly, bi-weekly, monthly, quarterly, and everything in between.  Our CPA’s travel to the offices of many of our Fort Wayne business clients.  Many of our clients drop their small business bookkeeping and accounting off at our office on the north side of Fort Wayne, Indiana.

Small business bookkeeping and accounting is critical to the success of any small business.  We can show you how to handle your bookkeeping in an efficient manner or we can handle it for you!  Please give us a call today at 260-338-0833!

Mike Sylvester, CPA/ABV, MBA

The Indiana Department of Revenue (INDOR) is also mandating that all new businesses
pay their withholding and sales taxes using their online system called INTAX.  I think INTAX is a user friendly system that only has one drawback:  you cannot pay or
file the Food and Beverage taxes using INTAX.

The Indiana Department of Workforce Development (INDWD) also has a new
system called Uplink.  I find that this system isn’t as user friendly as others.
Additionally, to pay this tax, INDWD is requiring a $3 convenience fee
which the other agencies don’t change.  While, I don’t like Uplink as well as the others, I still prefer to use it rather than filing with paper forms because you can see in real time whether or not the forms have been successfully filed and returns paid.

Accurate bookkeeping is absolutely critical to the success of your small business.  A business cannot be successful unless it knows how much money it has earned and what its expenses are.  Our firm employs three Certified Public Accountants and all three have a great deal of experience handling small business bookkeeping.  All of our clients partner with one specific CPA in our firm; this allows our CPA’s to learn a great deal about the small businesses they partner with!

Bookkeeping tips from our CPA’s:

1. Do your bookkeeping on a regular schedule.  It is far easier to ensure your bookkeeping is accurate when you do it on a weekly or monthly schedule.  It is a bad idea to try to do your bookkeeping by throwing all of your receipts into a “shoe box” and spending a couple of days trying to figure out what happened over the prior year.
2. Do not assume that your spouse wants to handle the bookkeeping for your small business.  If I had a dollar for every client I have (especially men) that “dumped” their bookkeeping on their spouse and hoped for the best; I could take a nice vacation!  Bookkeeping is important and it is not something that everyone “has a knack” for; nor is it something that everyone is willing to do in the first place.
3. Partner with a CPA who can answer your bookkeeping questions throughout the year.  It is far easier to ensure your bookkeeping is accurate and up-to-date if you have a professional that you can call who can answer your bookkeeping questions.
4. Use a bookkeeping system that makes sense for you based on your needs.  The majority of our clients use QuickBooks; however, a fair numbers use an excel spreadsheet and a few do it the old fashioned way with pen and paper.  All three work and you should use the method you are most comfortable with.

If you own and operate a business near Fort Wayne, Indiana and you need help with your small business bookkeeping give one of our CPA’s a call today at 260-338-0833!

P.S.  We do provide expert QuickBooks training for an hourly fee of $70 an hour.

Basically, if in the course of business you pay an individual or an “organization” $600 or more for rent, royalties or services, you need to send the recipients of those funds a 1099.  An “organization” includes sole proprietors, partnerships, LLC’s, etc…  You do not need to file a 1099 for payments to an incorporated business.

Per the new laws those owning rental properties, farmers, and sole proprietors are now considered a business and need to issue 1099′s.

There is an exception to the not having to file a 1099 to incorporated businesses rule.  You are still required to file a 1099 for attorney fees regardless of whether or not that business is incorporated.  The threshold for this is $600 or more.

The IRS has placed a new question on business tax filings (including rental and farm filings as well as sole proprietor filings) in which you verify to the IRS that all required 1099 forms have been filed.  If they have not been filed when they should have been, “red flags” could go up which could have audit implications.

I think a good rule of thumb, is that if in doubt, and you paid someone $600 or more for services, write the 1099.

The 1099′s mailed to the recipients must be post-dated on or before January 31st, 2012.   The due date for the 1099’s (And transmittal Form 1096) to the government is February 28th, 2012.  The penalties for not filing are pretty severe:

1. $30 per 1099 if filed within 30 days of the due date
2. $60 per 1099 if filed after 30 days but before August 1^st
3. $100 per 1099 if filed after August 1^st
4. $250 per 1099 for intentional disregard of the rules.

We advise you to have a properly filled out W-9 form from your vendors prior to hiring the vendors to do work for your business.  This will ensure that you have the necessary
information when it comes time to prepare the 1099’s.  We’ve had experience when the opposite is true and the vendor refuses to provide the 1099 information.

We would be happy to prepare the necessary 1099′s for your business!  Please give us a call at 260-338-0833!

Brent Bracht, CPA

Most small business tax returns are due to be filed by March 15th, 2012.  A smaller number are due to be filed on or before April 16th, 2012.  Congress has increased the size and complexity of the tax code; especially as it relates to businesses.  The tax code is so complicated that businesses should hire a professional tax preparer who understands this portion of the tax code to ensure that they comply with the tax code and minimize their tax due.

Most tax franchise “chains” do not handle business tax returns.  It is nearly impossible for part time employees who work just a couple of months a year to maintain a sufficient level of knowledge to handle small business tax returns.

We have seen some small business tax returns that were prepared with glaring errors by supposed “professional” tax preparers.  Your business tax returns are too important to entrust to someone who does not understand the complexities of our modern tax code!

Please give Mike or Brent a call today at 260-338-0833 to find our

The Internal Revenue Service (IRS) is at it again.  The IRS is demanding more documentation with regard to third party payers.  Basically, if a business accepts credit cards or PayPal as a method of payment, the business will receive a 1099-K from the third party payer.  This 1099-K will show gross receipts broken out by month.  This will create several issues for small business owners.  The largest issue is a difference between revenue and gross receipts.  Gross receipts include things like sales tax and tips – these items are not revenue; however, the 1099-K will list them as revenue.  Most 2011 business tax forms will have a line which says “Merchant card and third-party payment.  For 2011, enter 0″.  The Internal Revenue Service isn’t even sure what they will do with this information; but, it decided to “muddy up the waters” anyway by requiring third party payers to issue 1099-K forms.

If you run a small business in the greater Fort Wayne metro area please give us a call today at 260-338-0833 and ask for Mike or Brent.  We would love to talk to you today!

Mike Sylvester MBA, CPA/ABV “Accredited in Business Valuation”

We are busy preparing payroll and payroll taxes for our clients.  The new 1099 rules are requiring more of our clients to issue 1099′s this year than ever before.

The 2011 payroll tax deadlines are rapidly approaching, if you have any questions about these upcoming deadlines please send you CPA an email today!

Mike Sylvester, MBA CPA/ABV

Unemployment compensation is taxable; if you or your spouse received unemployment compensation you will receive a 1099-G.  This income is reported on line 19 of your annual 1040 form.  In almost all cases you will also pay Indiana and county income taxes on the unemployment compensation you receive.  

If you receive unemployment compensation you should likely have Federal income tax with-held from your unemployment compensation payments.  If you haven’t been working, your first instinct may be to maximize the payments you receive by have no income taxes withheld.  Having 10% or more of your unemployment compensation benefits withheld for Federal income taxes may save you from being presented with a big tax bill from the Internal Revenue Service!

Even if you were unemployed at the end of the year, if you worked for any part of the tax year, you may still be eligible for the Earned Income Tax Credit (EITC). This tax credit is for people who have worked in the tax year, and have earned a low to moderate income. By reducing the amount of taxes you owe, a tax credit means more money for you and possibly a refund.

In order to determine if you qualify for the earned income tax credit, review the rules put out by the IRS on the Earned Income Tax Credit.

Mike Sylvester, CPA/ABV “accredited in business valuation”