Be Nice to a CPA Day

Get Organized!, LLC has founded a new holiday.  ‘Be Nice to a CPA Day’ will be henceforth celebrated on April 14th, the day prior to the much recognized, and sometimes dreaded,  holiday Tax Day – April 15th.

We know that the CPAs, Certified Public Accountants, along with accounting and bookkeeping support staff, are working hard to get tax returns submitted.  This time of year, they are working mornings, nights, and weekends.  So give ’em a hug, give ’em a thank you, and most of all give ’em a break.

Here are 5 things you can do to celebrate the holiday:

1.  File an extension.

If you do not get your information to your tax preparer by March 15th or earlier don’t expect your tax return to be done by April 15th.  Talk to your CPA before tax time, say in November or early December to clarify when the deadline is for submitting information for an on-time return.

I run into people from time to time that some how believe that that filing an extension is some terribly horrible thing.  To you I say, ‘Everyone is doing it, join in’.

2.  Get tax advice early.

If you are looking for tax advice and planning, don’t expect to get much of it during the tax season.  Make an appointment with your tax preparer in the fall to review where you are at and where you expect to be by the end of the year.  They will have the time and energy to assist you and then you will have time to make adjustments and/or save up money as needed.

3.  Make installment payments.

No one likes to hear that they owe tens of thousands of dollars.  Often you owe this because you did not make installment payments and/or you did not have the correct amount withheld from your paycheck.  To new entrepreneurs who complain and whine about the taxes they pay, I say ‘You paid most of these taxes as an employee and simply did not notice it because taxes were deducted each paycheck.’

I like what one of my clients said “I will be happy to pay taxes, it will mean I am making money!”

4.  Don’t expect your tax preparer to be your controller.

So often when I am hired to clean up a bookkeeping mess, my clients say “Why didn’t our CPA say anything?”  Well, when it is bad enough most tax preparers will say something.  Usually though, they do journal entries to make some sense of the mess and move to the next return.  A controller has the role in an organization of ensuring the financial data is accurate.  Who is acting as the controller for your business?  Too often the answer is ‘no one’.

If you want to get feedback from your CPA about the condition of your books and process improvements that need to be made, schedule a meeting in the summer.  That is a great time to check in and find out what it would take to have your CPA provide feedback and guidance regarding your bookkeeping.  Heads up, this is not be free service usually so don’t expect it to be.

Understanding your Accounting Management Needs

5.  Look at your tax return.

“My CPA had my child’s social security number wrong for the last 4 years.”  My response is why didn’t you catch it?  This is not a reason to fire your CPA, it is a red flag to you to actually look at the return that was created for you.  Some of my clients have me review the tax return after it is completed.  Sometimes I find changes that need to be made.  Alert- CPAs are human, they can be prone to human error just like the rest of us.

The number of journal entries needed to clean up the books for taxes is a great gauge for the quality of your bookkeeping.  Take the time to look at the journal entries provided by your CPA.  Even if you do not understand accounting, 2- 3 pages of entries are a red flag that your processes need to change.  Make sure your bookkeeper enters the journal entries your CPA provides during tax preparation.  Without these entries the account beginning balances will be off – making the start of your tax return a longer process.

Your business accounting and tax preparation are active not passive activities.  Be nice to a CPA today and be actively involved in your financial activities.

 

QuickBooks Classes – Spring Term

 QuickBooks for Spring

Classes are at the LBCC Albany campus.

Sign Up Here

QuickBooks Guided Tour

This course is great for people that need to brush up on computer skills before Level 1.

May 6 & 8, 2 -4pm, $69

QuickBooks Level 1

We will cover lots of topics and processes in QuickBooks.  Students are encouraged to bring questions from their own experiences to class.

5 Thursdays

May 15 – June 12, 2-4pm, $195

3 Do Not Do’s for Employers and Payroll

Do Not Pay Employees Early

Tax payments and reporting are based on Pay Date.  Giving out paychecks early can lead to lots of penalty and interest if it causes taxes to be due on an earlier date.  Banks will cash post dated checks so you cannot rely on that to stop employees from being paid early.  Do not allow employees to cash checks before the actual Pay Date – Do not hand them out early.

Example: You are a monthly tax payer so payroll taxes are due the 15th of the following month.  Payroll is processed for the Pay Date 4/1.  Taxes for the payroll will be due 5/15.  You hand out paychecks on 3/31.  Employees cash their checks on 3/31.  The taxes for the checks cashed will now be due 4/15!

Do Not Deduct without Written Consent

It is unlawful to deduct anything but taxes and garnishments without written consent from employees.  This includes loan pay backs, reimbursement for personal expenses/purchases, and insurance premiums.  Signing up for medical insurance is not enough, employees need to sign a wage reduction agreement stating that they agree to have premiums deducted from their pay.

BOLI Employer Deductions: Questions & Answers

Do Not Enter What You Do Not Need/Know

The new versions of QuickBooks have fields in Employee Information for Race, National Origin, and Marital Status.  Making assumptions is never a good idea and filling in these fields can be an even worse idea.  Do not fill in data for protected classes unless you need the data for reporting to a third party.

Information about inclusion in protected classes should be kept confidential.  Entering this information in QuickBooks means anyone with access to QB, has access to the information.  Employees may rightly assume that their protected status is in some way being used to make decisions about their employment if you are tracking the status in QB.

 BOLI Protected Classes