KNEG CPAs is seeking an addition to their firm.  We have an opening for an experienced accountant/auditor.    3-5 years of prior career experience in a public accounting firm is essential.  CPA designation desired, but not required.  The national shortage of qualified professionals that meet the criteria for this position is astounding. If you know anyone that you would recommend, or if you yourself think you are a good fit, please contact Melody at 772-231-6902 or mipolito@knegcpa.com. KNEG was a 2012 winner of the Best Places to Work in Indian River County!  We appreciate you sharing this post on Facebook and other social media platforms.

c/o: admeijer

Another tax season has come and gone, but that doesn’t mean that taxes are off your brain. If you’re new to the freelance or entrepreneur world, this past tax season was probably quite challenging. Digging up W-2s, 1099s and receipts for personal taxes is hard enough, let alone everything you need for your business. When people see how much they have to pay for self-employment taxes and first quarter estimates, it can add insult to injury.

Fortunately, there’s plenty you can do to prepare yourself for next year. Below are helpful tips that every new entrepreneur should know.

Keep organized by tracking receipts

It may seem silly to save receipts for a few pens, notebooks or printer paper, but the cost of these materials really adds up. Save the receipts of the expenses that you can write off in an expandable folder. Also, start a spreadsheet that lists the expenses so that everything is organized in one location, and you can keep a running tab.

Put all business expenses on one card

Another helpful tip is to put all business expenses on one card. Come tax time, it makes it easy to track your expenses when they’ve been placed on one card, and you know that you’re not forgetting to write off certain expenses.

Hire a seasoned CPA

You may be tempted to handle your taxes on your own, but when you have your own business, the task gets that much more complicated. The bottom line is that you shouldn’t be going at this alone, so take the time to hire an accountant that is easy to work with and can answer questions as you go along.

Track 1099s

Keep a spreadsheet that lists the 1099s that you have received or given out. It’s easy to forget small jobs along the way, so it’s best to track them each month. File the 1099s you have received in a manila folder along with your receipts and other documents.

Have a nest egg fund

Tax time comes quickly, and many new entrepreneurs have a rude awakening at this time of the year. If you find your business growing, overestimate your earnings, subtract the taxes and have a nest egg fund that you will appreciate come tax time. You also need to spend lightly during the first quarter, so be sure to budget in addition to putting money away.

While taxes aren’t always the most exciting affair, they are necessary. In order to prevent a stressful tax season, you need to prepare for this day all year long. When you keep all important receipts and papers filed, have running spreadsheets, money set aside and a helpful accountant, you can tackle each tax season with ease.

c/o: shho

If you are unable to file your income tax return by the April 15^th deadline, you may apply for an extension. You may think that the IRS isn’t very understanding, and sometimes they aren’t, but when it comes to filing taxes, the IRS gives plenty of opportunities to do so correctly. If you cannot make the deadline, you are given an additional six months, making your new filing date October 15, 2013. Here’s what you need to do to qualify for an extension.

Contact your CPA

Contact your CPA immediately.  Request that an extension be filed to meet the April 15th deadline.   Gather up all pertinent information. This way, if you are going to owe taxes for 2012 you will have all the information you need in one place and your tax preparer will be able to complete your filing before October 15th to save on penalties and fees.  Hopefully you will have used a CPA in the past that can estimate the amount you may owe in taxes for the current filing year and know if utilizing the extension period is in your best interest.

Pay Something

If your taxes have been completed but you cannot pay the full amount, pay something and immediately contact the IRS to make payment arrangements for the remaining balance.  Your CPA can complete the necessary forms for these payment arrangements and work on your behalf with the IRS.  Being proactive in this regard will save on penalties and fees.

Utilize Your Extension Period

The purpose of this additional time is provide you the opportunity to gather all of your documents  and files so that your CPA can review your books, make necessary adjusting journal entries, ask questions that could lead to tax savings and provide you with the best possible tax return outcome.  Do not let the October 15th deadline sneak up on you like the April 15th deadline did!

Blog sponsored by: KNEG CPA

Another tax season done – you can finally breathe a sigh of relief because you’re getting back a refund and not owing anything to the IRS. Now it’s time to decide how you will put your tax refund to good use. For small businesses, tax refunds are vital to the growth and development of the business. When you spend much of the year using limited funds to keep your business up and running, a nice bonus at tax time is a great way to pour a little more into your livelihood.

Let’s take a look at some of the smartest ways to use your small business tax refund.

Webinars – Webinars are a great way to learn new information about the industry and educate employees as well. Since they are done over the internet, you don’t have to worry about paying for the cost of travel and lodging. Many webinars also have certificates for completion of the course.

Google AdWords – AdWords is an integral part of any PPC marketing campaign. You only pay when your ad gets clicked, making it easy to decide how much you want to spend on your campaign.

Marketing – Marketing in general is something that small businesses don’t get enough of. Since it costs so much to jumpstart a business and keep it running, marketing becomes an afterthought. This year, use your tax refund for a marketing strategy that will boost customer interest and have measurable results.

Website Design – For a fee, you can have your website redesigned to fit the standards of today’s websites. You want your site to be user-friendly, fast, responsive and simple. If your website is outdated, it’s time to get it up to speed so that you can attract more customers.

Mobile Website – With so many users relying on their smartphones and tablets, it’s important that you have a mobile website as well. These sites cost far less than PC-based websites, so you can get more bang for your buck. If you don’t have a mobile-based website, it’s time to get one so that the competition doesn’t pass you up.

Reinvesting your tax refund is a great way to keep your business alive and growing, especially when funds are limited throughout the year.

Blog sponsored by: KNEG CPA

Even if you find that you do not need to file taxes this year, you may still want to go through the motions to take advantage of tax credits and tax breaks that may be available. And, if you’re unsure of whether or not you should file, always err on the side of caution. You certainly don’t want a letter from the IRS penalizing you for not filing your personal taxes accordingly.

What Forms do I Need to File Personal Taxes?

At the end of January, you will receive all of the documents you need to file your taxes. Your employer will send you a W-2 Form that shows the wages you have been paid for that year. If you work two jobs, you will have separate W-2 Forms. Any additional money that is earned over the year other than from your employer will come through on a 1099 Form. Also, you will receive a 1098 from your mortgage company if you own a home, and a 1098-E Form if you are claiming interest from your student loans.

There are convenient tax software programs that will guide you through your taxes, ensuring that you take the correct deductions. All forms must be received on April 15 in order to avoid late fees, or at 11:59 pm on April 15 for electronic submissions. It can be difficult to file taxes on your own, especially if you have a unique situation, are self-employed or unfamiliar with the tax laws. Since the tax laws are always changing, having an accountant can help you take advantage of the most tax credits.

Why Taxes are Important 

Although many people complain about paying their taxes, they have an important job of generating revenue for the country. Taxes help pay for new roads, schools, parks, transportation and health care. Even though we may not enjoy paying taxes, consider that every day you live in the state, you’re using the state’s resources. Additionally, if you don’t pay your taxes, you are subject to civil or criminal penalties.

Let the tax experts at KNEG CPA help you get the most of your tax refund this year.

c/o: Darren Shaw

If you have a small business that has corporation status, March 15 is the date to know. This is the deadline for your tax return, so you can’t miss your crucial opportunity to get everything in. The good news is that you only have to have the forms postmarked on or before this date; it’s okay if you don’t get everything to the IRS on the 15^th. The forms you will need for your corporate taxes include Forms 1120 or 1120S. If you are not ready, you may file an extension using Form 7004.

What Forms do I Need to File Corporate Taxes?

Many people want to know what the difference is between Forms 1120 and 1120S. If your business is a C corporation, you will file Form 1120. If your business is an S corporation, you will file Form 1120S. The majority of corporations are C corporations and file their taxes using the traditional 1120 Form. With an S corporation, the company pays taxes like a partnership or LLC. In this case, all profits and losses must go through the business and be reported on the owner’s personal income tax return.

Can I File an Extension? 

Many companies are unable to file their corporate taxes at this time, and that’s okay. It’s better to do things the right way than rushing to get things done. If you’re not ready to file, fill out Form 7004 on or before March 15. This form is for both C and S corporations and gives business owners an additional six months. It’s one of the easiest forms to fill out, with no signature required and no questions asked. With completion of Form 7004, you now have until September 15 to file your corporate taxes.

Although filing separate taxes for your corporation can be time consuming, it’s worth the effort. With this approach, you can retain more profits and be able to deduct the full cost of fringe benefits that are provided to business employees. There are some situations where filing corporate taxes may not be in your best interest, such as if you have experienced financial losses or are planning on selling the business.

For more information on filing corporate taxes, be sure to consult with an experienced tax expert such as those at KNEG. If you do decide to file your corporate taxes using electronic tax software, make sure that your electronic submission is received by 11:59 pm on March 15 in order to avoid late charges.

c/o: Sarah Hoffman

Most condo and homeowner’s associations allow a property management company to handle the basic accounting and bookkeeping that goes on throughout the year. Smaller communities may even have the treasurer take on these responsibilities. Yet once a year, there needs to be a larger, more precise accounting done to ensure that the responsibilities are being handled correctly. This task is generally carried out by an outside accountant who can provide a complete audit.

The reason for hiring an outside accountant for a yearly audit is twofold. First, HOAs want to ensure that there is no fraud going on and that all payments are being handled correctly. Having someone who is removed from the situation and looking at the numbers through a different set of eyes can provide this clarity and assurance. Second, sometimes there are simple mistakes that are made that need to be corrected, and other times the bookkeeping doesn’t fit within the standard accounting principles.

It’s true that many property management companies do exceptional work when it comes to accounting duties, but for other companies, they lack in this area. That’s why it pays to have a second look by an experienced CPA for an annual audit review. The CPA can provide something as basic as a compilation or as in-depth as a full audit.

With the compilation, the CPA will read the financial documents and look for errors that stand out. There is no analysis done, however, so the CPA cannot say whether or not there appears to be fraud. During the review, a limited analysis is done on the financial information. A review also does not assess the risk of fraud, but it does go a step further by asking about policies and procedures.

The audit is the last but biggest step; it’s where the highest level of scrutiny is delivered. The CPA makes sure that the bookkeeping follows the auditing standards put in place by the Generally Accepted Accounting Principles (GAAP), and all financial documents are confirmed for accuracy. The risk of fraud is analyzed here as well. At the end of the process, the HOA will receive a certified letter saying that the financial documents are correct. Having a full audit done is most expensive, but it’s the best way to be certain that condos and HOAs are being run accordingly.

Blog sponsored by: KNEG CPA

c/o: Dani Simmonds

Forensic accounting is a specialized field, and a branch between accounting and forensic science. Forensic accountants investigate fraudulent financial information, and they may have to give expert advice at trial when necessary. Generally speaking, all moderate- to large-sized accounting firms have forensic accountants that work for them. These specialized accountants look at such documents as bank statements, tax returns and business records for the purpose of separating fact from fiction.

In many cases, fraudulent spending can be difficult to identify and often shows up as complicated and cluttered numbers. There are a number of techniques used to determine whether or not the numbers are indeed fraudulent, but spotting the inconsistencies is the first step in determining fraudulent claims. Forensic accountants can be used in private practice or at the government level.

So, with what types of situations do forensic accountants work?

-      Embezzlement

-      Bankruptcy and insurance claims

-      Malpractice suits

-      Business dissolutions

-      Shareholder disputes

-      Audit services

-      Economic damages and loss profits

-      Divorce

-      Breach of contract

-      Corporate fraud

There are a number of techniques used to study financial assets, and these methods are being practiced by forensic accountants every day. They include the following:

-      Benford Testing: Based on Benford’s Law, numbers are non-uniform. Therefore, people who make up numbers tend to distribute them uniformly.

-      Genograms: Visual displays of an individual’s business and personal relationships. This model is used to display relationships, motives and patterns of behavior.

-      Full and False Inclusion: Full and false inclusion tests are used to determine whether or not the included information is comprehensive or if it includes irrelevant information.

Blog sponsored by: KNEG CPA

c/o: businessweek.com

The ‘fiscal cliff’ was a term coined by Federal Reserve Chairman Ben Bernanke as he described the economic situation that would occur if the tax breaks from the Bush-era were not extended. Basically, if the tax cuts did expire, it would put added financial strain on American families and spiral us back into another recession. After a long deliberation, we finally got word that the fiscal cliff was averted. But does that mean that there are no implications? Not exactly.

First, income tax cuts were made permanent for moderate and low-income families, but taxes are going up for those making $400,000 or more per year ($450,000 when filing jointly). The new rate is raised from 35 percent to 39.6 percent. Therefore, if you are a business owner bringing in this much money each year, your income tax rate is going up.

Also, social security payroll tax cuts were not extended, so pretty much everyone will have more money taken out of their paychecks to cover these taxes. Starting in 2013, people will be responsible for a 6.2 percent tax rate as opposed to last year’s rate of 4.2 percent.

There are some small perks included in the fiscal cliff deal, such as benefits to small business owners, modifications to certain tax rates and an extension of unemployment benefits for long-term jobless Americans. However, the fiscal cliff deal did not address federal debt or make strides toward long-term tax reform. While many breathed a sigh of relief when news came back that an agreement had been made, it seems that the bigger picture was never touched upon.

The good news is that if you’re a middle-class family, you won’t see much difference, except for slightly smaller paychecks thanks to the increased payroll tax. Otherwise, you can carry out your 2012 tax return in the same way, depending on how you chose to handle last-minute tax preparations. For example, many people chose to decrease their taxable income by putting money into 401ks, adjusting their withholdings or selling stocks that weren’t doing well.

Remember that there may be more changes in store because the fiscal cliff deal only guaranteed a short-term solution.

Blog sponsored by: KNEG CPA