Hawkins Ash CPAs https://hawkinsashcpas.com Part of your business. Part of your life. Fri, 13 Sep 2019 20:14:41 +0000 en-US hourly 1 https://wordpress.org/?v=5.2.3 Outagamie Sales Tax Increase https://hawkinsashcpas.com/outagamie-sales-tax-increase/ Tue, 17 Sep 2019 17:47:16 +0000 https://hawkinsashcpas.com/?p=7913 A half-percent sales tax will go into effect January 1, 2020 for Outagamie County, Wisconsin. Businesses that make taxable sales in Outagamie County will need to update their accounting/point-of-sale software to reflect the increase of the sales tax. In QuickBooks, you will want to set up a “Sales Tax Group” to account for the extra […]

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A half-percent sales tax will go into effect January 1, 2020 for Outagamie County, Wisconsin. Businesses that make taxable sales in Outagamie County will need to update their accounting/point-of-sale software to reflect the increase of the sales tax.

In QuickBooks, you will want to set up a “Sales Tax Group” to account for the extra 0.5%.

To do this:

  1. Click “Lists” on the top menu bar, click “Item List”, click the Item dropdown on the lower left side of the window, and click “New”
  2. Choose “Sales Tax Item” as the Type
    • Sales Tax Name – enter Outagamie Co.
    • Description – leave as Sales Tax
    • Tax Rate – enter 0.5%
    • Tax Agency – enter Wisconsin Department of Revenue; click “OK”

This will bring you back to the Item List. To create the “Sales Tax Group”:

  1. Click the Item dropdown again and click “New”
  2. Choose “Sales Tax Group” as the type
    • Group Name/Number – enter Outagamie Co-WI
    • Description – leave as Sales Tax
    • In the Tax Item box, click the dropdown and choose your sales tax item for Wisconsin Sales tax
    • Click to the next line and choose the new Outagamie Co. sales tax item
    • The Group Rate should be 5.5%; click OK

Until December 31, 2019 continue using the Wisconsin Sales Tax item for taxable sales in Outagamie County. On January 1, 2020, change the sales tax item on invoices/sales receipts to Outagamie Co-WI for any taxable sales in Outagamie County.

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Create, Edit or Delete Recurring Transactions https://hawkinsashcpas.com/create-edit-or-delete-recurring-transactions/ Sun, 15 Sep 2019 18:25:54 +0000 https://hawkinsashcpas.com/?p=7919 Many invoices, rent payments, or journal entries consistently recur from month to month. Never miss a transaction again by creating “memorized transactions.” How to Create a Memorized Transaction in Desktop Enter the transaction the way you want it memorized, but do not select save. Note: if certain fields contain information that may change, leave those […]

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Many invoices, rent payments, or journal entries consistently recur from month to month. Never miss a transaction again by creating “memorized transactions.”

How to Create a Memorized Transaction in Desktop

  1. Enter the transaction the way you want it memorized, but do not select save. Note: if certain fields contain information that may change, leave
    those fields blank. Example: Leave the memo field blank on a recurring check so you can enter a different memo on each check.
  2. From the Edit Menu, select “Memorize (Transaction)”
  3. Enter a Name for the Memorized Transaction, then choose a type – “Reminder List.” “Do Not Remind Me,” or you can choose how often you want QuickBooks to Automate the Entry.

How to Create Recurring Transactions in QuickBooks Online

Memorized Transactions is only available in QuickBooks Desktop. However, if you’re using QuickBooks Online Essentials or Plus, you have the option to set Recurring Transactions for customers and vendors. To create a recurring template, here’s how:

  1. Select the Gear Icon
  2. Under Lists, select “Recurring Transactions”
  3. Click “New”
  4. Select the type of transaction to create, and select “OK”
  5. Enter a Template Name
  6. Choose a Type – Scheduled, unscheduled or reminder
  7. Enter the necessary information
  8. Save Template

Memorized or recurring transactions can be a real time saver. Utilize the software for maximum efficiency. You’ll be glad you did!

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QuickBooks Update Newsletter: September 2019 https://hawkinsashcpas.com/quickbooks-update-newsletter-september-2019/ Wed, 11 Sep 2019 23:11:42 +0000 https://hawkinsashcpas.com/?p=7909 Stay up to date on the latest QuickBooks advice and information from our recent QuickBooks Update. Headlines include: Outagamie Sales Tax Increase Register for these Upcoming Events: QuickBooks Connect Roundtable Payroll and Year-End Webinar New Features for QuickBooks Online Create, Edit or Delete Recurring Transactions >>> View and subscribe to newsletter here

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Stay up to date on the latest QuickBooks advice and information from our recent QuickBooks Update.

Headlines include:

  • Outagamie Sales Tax Increase
  • Register for these Upcoming Events:
    • QuickBooks Connect Roundtable
    • Payroll and Year-End Webinar
  • New Features for QuickBooks Online
  • Create, Edit or Delete Recurring Transactions

>>> View and subscribe to newsletter here

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Disabled Access Credit https://hawkinsashcpas.com/disabled-access-credit/ Wed, 11 Sep 2019 21:10:12 +0000 https://hawkinsashcpas.com/?p=7906 As business get more and more competitive, owners are making improvements to their product and premises. As these improvements are made, did you know that some of them may be eligible for a tax credit? The Disabled Access Credit is one way to save tax dollars by making improvements to your business. Listen in and […]

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As business get more and more competitive, owners are making improvements to their product and premises. As these improvements are made, did you know that some of them may be eligible for a tax credit? The Disabled Access Credit is one way to save tax dollars by making improvements to your business. Listen in and learn more here or read our podcast script below!

What exactly is this credit?

The disabled tax credit works just like it sounds, if improvements are made to make it easier for a disabled customer to patronize your business or makes it easier for a disabled employee to do his/her job, you may be eligible for a tax credit – not a deduction, so it’s actually worth more.

What expenses are eligible for the credit?

The IRS basically says that eligible expenses include amounts paid to

  1. Remove barriers that prevent a business from being accessible to or usable by a person with disabilities. Ramps and bathroom remodels are great examples.
  2. To provide qualified interpreters or other methods of making audio materials available for those with language barriers.
  3. To provide methods to assist with those that are visually impaired.
  4. To acquire or modify equipment or devices for individuals with disabilities. For example, desks made for wheelchairs and a medical examination table designed for people with disabilities. You should talk to your vendor to see if the equipment qualifies for this type of credit. If you don’t ask, you don’t know. If your tax preparer isn’t aware of what you’ve done, you may miss a credit that you’re fully eligible to get.
  5. The expense must be reasonable and necessary to accomplish the items we just mentioned.

Can you get the credit later on, or is it only the year you’ve made those improvements?

It’s only the year you’ve made the improvements, but you can always file an amended return if you find out later that the credit was not taken.

Who is considered to be disabled?

Individuals with either physical or mental impairments. It’s not just the physical side of it. There must be a record of such impairment and being regarded as having such an impairment.

What businesses are eligible for credit?

It’s mostly going to be your small businesses. Small businesses are really defined as businesses with gross receipts under $1,000,000 and less than 30 full-time employees. Large employers will probably not benefit from this. This was really designed to help small businesses have an advantage.

How is the credit calculated?

It’s up to 50% credit on the first $10,000 of expense. That’s about $5,000 you can take as a credit for doing that improvement.

If a business cannot use it all in one year, can it be used in the future?

Yes. If some businesses get the maximum $5,000 tax credit and they don’t have that much tax, they can certainly carry that forward into the future.

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The Tax Cost of Divorce Has Risen for Many https://hawkinsashcpas.com/the-tax-cost-of-divorce-has-risen-for-many/ Tue, 03 Sep 2019 21:33:13 +0000 https://hawkinsashcpas.com/?p=7895 Are you divorced or in the process of divorcing? If so, it’s critical to understand how the Tax Cuts and Jobs Act (TCJA) has changed the tax treatment of alimony. Unfortunately, for many couples, the news isn’t good — the tax cost of divorce has risen. What’s Changed? Under previous rules, a taxpayer who paid […]

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Are you divorced or in the process of divorcing? If so, it’s critical to understand how the Tax Cuts and Jobs Act (TCJA) has changed the tax treatment of alimony. Unfortunately, for many couples, the news isn’t good — the tax cost of divorce has risen.

What’s Changed?

Under previous rules, a taxpayer who paid alimony was entitled to a deduction for payments made during the year. The deduction was “above-the-line,” which was a big advantage, because there was no need to itemize. The payments were included in the recipient spouse’s gross income.

The TCJA essentially reverses the tax treatment of alimony, effective for divorce or separation instruments executed after 2018. In other words, alimony payments are no longer deductible by the payer and are excluded from the recipient’s gross income.

What’s the Impact?

The TCJA will likely cause alimony awards to decrease for post-2018 divorces or separations. Paying spouses will argue that, without the benefit of the alimony deduction, they can’t afford to pay as much as under previous rules. The ability of recipients to exclude alimony from income will at least partially offset the decrease, but many recipients will be worse off under the new rules.

For example, let’s say John and Lori divorced in 2018. John is in the 35% federal income tax bracket and Lori is a stay-at-home mom with no income who cares for John and Lori’s two children. The court ordered John to pay Lori $100,000 per year in alimony. He’s entitled to deduct the payments, so the after-tax cost to him is $65,000. Presuming Lori qualifies to file as head of household, and the children qualify for the full child credit, Lori’s net federal tax on the alimony payments (after the child credit) is approximately $8,600, leaving her with $91,400 in after-tax income.

Suppose, under the same circumstances, that John and Lori divorce in 2019. John argues that, without the alimony deduction, he can afford to pay only $65,000, and the court agrees. The payments are tax-free to Lori, but she’s still left with $26,400 less than she would have received under pre-TCJA rules.

The pre-2019 rules can create a tax benefit by reducing the divorced couple’s overall tax liability (assuming the recipient is in a lower tax bracket). The new rules eliminate this tax advantage. Of course, if the recipient is in a higher tax bracket than the payer, a couple is better off under the new rules.

What If You’re Already Divorced?

Existing divorce or separation instruments, including those executed during 2018, aren’t affected by the TCJA changes. The previous rules still apply unless a modification expressly provides that the TCJA rules must be followed. However, spouses who would benefit from the TCJA rules — for example, because their relative income levels have changed — may voluntarily apply them if the modification expressly provides for such treatment.

What to Do?

If you’re contemplating a divorce or separation, be sure to familiarize yourself with the post-TCJA divorce-related tax rules. Or, if you’re already divorced or separated, determine whether you would benefit by applying the new rules to your alimony payments through a modification of your divorce or separation instrument. (See “What if you’re already divorced?”) We can help you sort out the details.

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Nonprofit Tax Tidbits: Form 990 Schedule L https://hawkinsashcpas.com/nonprofit-tax-tidbits-form-990-schedule-l/ Tue, 03 Sep 2019 21:02:42 +0000 https://hawkinsashcpas.com/?p=7853 The next installment in our series on the schedules of the IRS Form 990 focuses on Schedule L, Transactions with Interested Persons. Schedule L provides information on certain financial transactions between the organization and interested persons. There are four different sections to Schedule L, each part covering a different type of transaction with an interested […]

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The next installment in our series on the schedules of the IRS Form 990 focuses on Schedule L, Transactions with Interested Persons. Schedule L provides information on certain financial transactions between the organization and interested persons. There are four different sections to Schedule L, each part covering a different type of transaction with an interested person. Various thresholds and exceptions may determine whether a given transaction must be reported in one of these parts.

An interested person is any person who is in a position to influence the tax-exempt organization at any time during a five-year period ending on the day of the transaction or a disqualified person under section 4958. An interested person can also include a member of the disqualified person’s family or his/her business. Schedule L is also used to determine whether a voting member of the governing board is independent for reporting on Form 990, Part VIII, Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees and Independent Contractors. A transaction between the organization and an interested person is only reported in one place on Schedule L. Answering questions 25-28 of Form 990 Part IV Checklist of Required Schedules will assist the organization in choosing the correct section to report these transactions.

Part I, Excess Benefit Transactions applies only to 501(c)(3), 501(c)(4) and 501(c)(29) organizations that had excess benefit transactions at any time during the five-year period. Excess benefit transactions are reported regardless of the amount. An excess benefit transaction can have serious implications for the person who benefited from the transaction, the managers of the organization and the organization. On part I, the organization discloses the disqualified person’s name, his/her relationship to the organization, a description of the transaction, whether or not the transaction has been corrected, and the amount of excise tax that was paid by the disqualified person and the organization managers.

Parts II-IV applies to all types of organizations.

Part II, Loans to and/or From Interested Persons reports details on loans including salary advances and split-dollar life insurance arrangements treated as loans. The interested person’s name, relationship to the organization, the purpose of the loan, whether the loan was to/from the organization, the original amount, as well as the current balance is detailed for each loan. Questions regarding whether the loan is in default, approved by the governing board, or if there was a written agreement in place must be answered. A loan from a 501(c) 3 organization, a governmental unit, or an exempt organization with the same tax-exempt status as the filing organization does not need to be disclosed in Part II. Only loans outstanding as of the fiscal year end need to be reported.

Part III Grants or Assistance Benefiting Interested Persons reports grants or assistance of any amount that is provided by the organization to an interested person during the organization’s tax year. Assistance can be in the form of scholarships, discounts on goods and services, prizes, or the use of facilities. The interested person’s name, relationship to the organization, amount of assistance, type and purpose of the assistance is disclosed.

Part IV Business Transactions Involving Interested Persons reports transactions that occur between the organization and interested persons that exceed the reporting thresholds. The reporting thresholds for transactions that occur between the organization and an interested person are as follows: (1) all payments during the tax year that exceeded $100,000; (2) all payments during the tax year from a single transaction that exceeded the greater of $10,000 or 1% of the filing organizations total revenue; (3) compensation payments which exceeded $10,000 during the tax year by the organization to a family member of a current or former officer, director, trustee, or key employee of the organization; (4) the organization has invested $10,000 or more in a joint venture with an interested person (whether or not during the tax year) and the profits or capital interests of each party exceeds 10% at some time during the tax year. Typically, these types of transactions should be approved by the board of directors and should be included in the minutes of the organization.

As with most schedules in the 990 series, the last schedule is a supplemental schedule which gives the organization additional space to provide any further explanation that is needed.

The organization must make a reasonable effort to ascertain the identity of interested persons. One way to accomplish this is to create a questionnaire to be filled out annually by persons who have an opportunity to influence the organization such as board members, members of management and/or substantial contributors.

If you have any questions regarding Schedule L of Form 990 or would like assistance in developing an interested person questionnaire, please contact your Hawkins Ash CPAs representative.

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Double Up on Tax Benefits by Donating Appreciated Artwork https://hawkinsashcpas.com/double-up-on-tax-benefits-by-donating-appreciated-artwork/ Tue, 03 Sep 2019 20:49:44 +0000 https://hawkinsashcpas.com/?p=7887 The first thing to keep in mind if you’re considering a donation of artwork is that you must itemize deductions to deduct charitable contributions. Now that the Tax Cuts and Jobs Act has nearly doubled the standard deduction and put tighter limits on many itemized deductions (but not the charitable deduction), many taxpayers who have […]

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The first thing to keep in mind if you’re considering a donation of artwork is that you must itemize deductions to deduct charitable contributions. Now that the Tax Cuts and Jobs Act has nearly doubled the standard deduction and put tighter limits on many itemized deductions (but not the charitable deduction), many taxpayers who have itemized in the past will no longer benefit from itemizing.

For 2019, the standard deduction is $12,200 for singles, $18,350 for heads of households and $24,400 for married couples filing jointly. Your total itemized deductions must exceed the applicable standard deduction for you to enjoy a tax benefit from donating artwork.
Something else to be aware of is that most artwork donations require a “qualified appraisal” by a “qualified appraiser.” IRS rules contain detailed requirements about the qualifications an appraiser must possess and the contents of an appraisal.

IRS auditors are required to refer all gifts of art valued at $50,000 or more to the IRS Art Advisory Panel. The panel’s findings are the IRS’s official position on the art’s value, so it’s critical to provide a solid appraisal to support your valuation.

Finally, note that, if you own both the work of art and the copyright to the work, you must assign the copyright to the charity to qualify for a charitable deduction.

Deduction Tips

The charity you choose and how the charity will use the artwork can have a significant impact on your tax deduction. Donations of artwork to a public charity, such as a museum or university with public charity status, can entitle you to deduct the artwork’s full fair market value. If you donate art to a private foundation, however, your deduction will be limited to your cost.

For your donation to a public charity to qualify for a full fair-market-value deduction, the charity’s use of the donated artwork must be related to its tax-exempt purpose. If, for example, you donate a painting to a museum for display or to a university’s art history department for use in its research, you’ll satisfy the related-use rule. But if you donate it to, say, a children’s hospital to auction off at its annual fundraising gala, you won’t satisfy the rule.

Careful Planning

To reap the maximum tax benefit of donating appreciated artwork, you must plan your gift carefully and follow all applicable rules. Contact us for assistance.

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Tax+Business Alert: September 3, 2019 https://hawkinsashcpas.com/taxbusiness-alert-september-3-2019/ Tue, 03 Sep 2019 19:24:39 +0000 https://hawkinsashcpas.com/?p=7891 Stay up to date on the latest tax and business advice and information from our recent Tax+Business Alert. Headlines include: Double Up on Tax Benefits by Donating Appreciated Artwork\ Upcoming Events: QuickBooks Connect Roundtable Year-End Webinar Podcast: Work Opportunity Tax Credit The Tax Cost of Divorce Has Risen for Many >>> View and subscribe to […]

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Stay up to date on the latest tax and business advice and information from our recent Tax+Business Alert.

Headlines include:

  • Double Up on Tax Benefits by Donating Appreciated Artwork\
  • Upcoming Events:
    • QuickBooks Connect Roundtable
    • Year-End Webinar
  • Podcast: Work Opportunity Tax Credit
  • The Tax Cost of Divorce Has Risen for Many

>>> View and subscribe to newsletter here

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QuickBooks Roundtable https://hawkinsashcpas.com/quickbooks-roundtable/ Thu, 29 Aug 2019 10:19:03 +0000 https://hawkinsashcpas.com/?p=6286 Sales Tax in QuickBooks During this interactive conversation, we’ll cover how to properly set up and pay sales tax and troubleshooting sales tax issues within QuickBooks. Register today to participate in our upcoming QuickBooks Connect Roundtable in September. During this 1.5 hour call-in session, our conversation will center around sales tax processing in QuickBooks. Debbie […]

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Sales Tax in QuickBooks

During this interactive conversation, we’ll cover how to properly set up and pay sales tax and troubleshooting sales tax issues within QuickBooks. Register today to participate in our upcoming QuickBooks Connect Roundtable in September. During this 1.5 hour call-in session, our conversation will center around sales tax processing in QuickBooks. Debbie Denny will lead the dialogue, answering questions and providing tactical advice to topics you submit during registration.

Date

Monday, September 16, 2019

Time

9:00 a.m. – 10:30 a.m.

Registration

Complimentary registration>>>

About the Moderator

Debbie Denny, Tax Manager, Advanced QuickBooks ProAdvisor

Debbie has over 19 years of experience with QuickBooks. With her knowledge, she assists clients with their initial set up of QuickBooks and is available when they have questions or when problems arise. Debbie is a manager at Hawkins Ash CPAs and oversees the firm’s QuickBooks ProAdvisors and payroll and accounting services staff in the Green Bay office.

Previous Roundtable Recording

Click here to view past recordings of our QuickBooks Roundtable.

Questions

Call: 920.337.4544

Email: info@hawkinsashcpas.com

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Work Opportunity Tax Credit https://hawkinsashcpas.com/work-opportunity-tax-credit/ Wed, 28 Aug 2019 18:32:15 +0000 https://hawkinsashcpas.com/?p=7873 With the unemployment rate as low as it has been in the last 50 years, employers know how difficult it is to hire qualified employees. Did you know that the IRS has a federal tax credit for hiring individuals in targeted groups? Hiring individuals from these targeted groups can fill a need and save some […]

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With the unemployment rate as low as it has been in the last 50 years, employers know how difficult it is to hire qualified employees. Did you know that the IRS has a federal tax credit for hiring individuals in targeted groups? Hiring individuals from these targeted groups can fill a need and save some taxes for your business. Listen in and learn more!

What are examples of workers in the targeted groups?

These groups consist of welfare recipients such as SNAP or TANF, food stamp recipients, qualified veterans, SSI (disability) recipients, ex-offenders, designated community residents, vocational rehabilitation, summer youth, and long-term unemployment recipients.

Sounds like a win-win. How does it work?

The credit is called the Work Opportunity Tax Credit. The credit is based on a number of factors such as the category of workers, how many hours per year they work, and how long they are employed. It’s nice because this is a credit – not a deduction.

How much is the credit?

For many of the categories listed above, the maximum credit is $2,400, but it could go as high as $9,600.

Is the credit only available to for-profit businesses?

No. It is also available for non-profit entities. The credit offset income tax for for-profit businesses and the payroll taxes for non-profit organizations.

What does the employer need to do in order to get the credit?

An employer must get a certification that the individual is a member of the targeted group before being able to claim the credit. The state workforce agency certification must be done early on, normally within the first 28 days of employment, so if you have a potential employee, you will want to do this quickly.

Is there an expiration date for the credit?

The credit has been extended for a number of years, but the current expiration date is December 31, 2019.

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