What Day Is It?

The date of QuickBooks transactions are extremely important. Why?

Dates matter more than you may realize.

QuickBooks is a very date sensitive program. All transactions and reports are dated. QuickBooks automatically applies a date to these. When you do something in QuickBooks, you need to make sure you are entering the correct date.

If you write a check for the 1st of the month, but it cleared the bank on the last day of the prior month, you will have a hard time reconciling the bank. QuickBooks lets you clear the transaction, but your monthly reports will not match the bank reconciliation. Therefore, you need to date your checks for when you are actually handing them out.

Another issue we might see is when a payroll check gets handed out early. The check might be dated for the 1st, but given to the employee early, and the bank cashes it early. When this happens, the tax liabilities become off as well as the bank. If this happens during end/beginning of a quarter, it will have a major impact on the way the quarterly reports are created.

Finally, QuickBooks pulls all reports by dates. If you enter the incorrect date, then you will have a chance of running incorrect reports. If this happens at the end/beginning of the year, there might be tax implications. Also, this can become costly if the Accountant/Bookkeeper has to spend extra time tracking all of the errors down and correcting them.

Pay attention to the date you are using for everything!



Obamacare Forms are Here

Or, more accurately, many of them which will be used in implementing the new law were announced recently in draft form. And as it develops, there are quite a few. Here’s a sampling:

Form 1094-B the form for Transmittal of Health Coverage Information Returns

Form 1094-C the form for Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns

Form 1095-A a form for the Health Insurance Marketplace Statement

Form 1095-B the Health Coverage Form

Form 1095-C a form for Employer-Provided Health Insurance Offer and Coverage

OK, enough already! This is a few of several forms which were issued along with several “Revenue Procedures” (an IRS official method of telling us how to properly do something to their liking) related to the Affordable Health Care Act.

Among these is Revenue Procedure 2014-37, which “provides the methodology to determine the applicable percentage table in Section 36(b)(3)(A) of the Internal Revenue Code used to calculate an individual’s premium assistance credit amount for taxable years beginning after calendar year 2014. It also provides the methodology to determine the required contribution percentage in Section 36(c)(2)(C)(i)(II) used to determine whether an individual is eligible for affordable employer-sponsored minimum essential coverage for purposes of Section 36B for plan years beginning after calendar year 2014. In addition, Revenue Procedure 2014-37 reproduces the required contribution percentage, as determined under guidance issued by the Department of Health and Human Services, used to determine whether an individual is eligible for an exemption from the individual shared responsibility payment because of a lack of affordable minimum essential coverage under Section 5000A(1)(A) for plan years beginning after calendar year 2014. [i]

As you can see, or if you’ve been keeping up, already knew, we have a few more forms in our future.

Not to scare you, but we will be bringing you more fascinating news about the Affordable Care Act and its implications for you.





[i] Analysis from Jon A. Hayes, Executive Director, Independent Accountants Association of Michigan. 

A Great Trust to Place in an Agency of Government

The “TIGTA” or Treasury Inspector General for Tax Administration released on October 1, 2014 his Annual Report of IRS Compliance Trends, commenting that “Despite less funding and fewer employees, the Internal Revenue Service (IRS) increased the total dollars received and collected for the third straight year.”

However, the IRS conducted fewer examinations, and its Collection Function continued to receive more delinquent accounts than it closed. Budget reductions contributed to a decrease in the number of examinations and an increase in the number of delinquent taxes being placed in “inactive status,” according to J. Russell George, who currently holds the office of TIGTA. (We wrote about the role of TIGTA in an earlier PottscastWho Audits the IRS.)

In an IRS Audit, don't go it alone. We can help!

Don’t go it alone.

The IRS collected 13% more in fiscal year 2013 than in the previous fiscal year, bringing in a staggering $2.9 trillion (that’s $2,900,000,000,000 – I think!). As late Senator Everett Dirksen (R-Ill) is rumored to have quipped: “a billion here—a billion there—and pretty soon you’re talking real money.” Now the Senator might be tempted to update his joke.

“Enforcement revenue” (which is revenue collected as a result of IRS intervention—such as auditing tax returns) increased from $50.2 billion to $53.3 billion in the last fiscal year.

All of this money taken from the people and given to the government was accomplished by the IRS with a budget in fiscal 2013 which was 7.4% less than in the prior year. They spent only $11.2 billion, cut the number of full-time equivalents by 9% (to 86,310 at the end of fiscal 2013).

This is indeed a great trust to place in an agency of government. Ours is a self-assessing system with the IRS monitoring compliance. Its tactics can be irritating, its decisions and interpretations sometimes wrong, and even on rare occasion, the freedom of certain citizens can be threatened. But on the whole, one cannot argue much from a management standpoint about its efficiency.

Please keep in mind is that as professional tax accountants we are here to protect your interests, and while we abide entirely in accordance with the law, we do not work for the IRS. Should you fall into that number who are contacted about an audit (either in person or by correspondence) we want to know about it. In fact, let us see everything you get from the IRS as soon as you get it. Don’t go it alone: you won’t regret it.