Wednesday, July 12, 2017
QuickBooks Bookkeeping Services: Buy rental properties as well as properties to fix and flip
Hold your flips for 366 days and you get capital gains treatment.
Tuesday, July 4, 2017
QuickBooks Bookkeeping - Accounting
Kathryn C. Tiffany, LLC: located in Voorhees, New Jersey. We provide a wide variety of services such as bookkeeping, accounting, business and financial management tailored to meet the needs of each of our clients.
Our services are designed to make our client’s job easier and to provide them with more time to focus on building their business. In doing so, we are happy to be able to refer our clients’ businesses to others.
Member of the American Institute of Professional Bookkeepers, National Association of Certified Public Bookkeepers, Intuit QuickBooks Advisor Program, Association of Certified Fraud Examiners, Voorhees Business Association, and Chamber of Commerce.
Our services are designed to make our client’s job easier and to provide them with more time to focus on building their business. In doing so, we are happy to be able to refer our clients’ businesses to others.
Member of the American Institute of Professional Bookkeepers, National Association of Certified Public Bookkeepers, Intuit QuickBooks Advisor Program, Association of Certified Fraud Examiners, Voorhees Business Association, and Chamber of Commerce.
QuickBooks Consulting and Bookkeeping - Servicing the South Jersey area!
QUICKBOOKS & BOOKKEEPING
CONTACT INFO
Kathryn C. Tiffany, LLCVoorhees, New Jersey
Phone: 856-803-4651
Email:Kathryn@TiffanyAccounting.com
Web: http://www.TiffanyAccounting.com
Intuit QuickBooks Profile: http://proadvisor.intuit.com/quickbooks-help/kathryn-tiffany
Quickbooks Set-Up and Training
Industry-specific support
Accounting System set-up and maintenance
General ledger - charts of accounts, vendor set-up, journal entries
Billing
Inventory Management
Generally Accepted Accounting Principles (GAAP) standards
Accounts Payable
Accounts Receivable
Bank and Credit Card Reconciliations
Financial Statements Preparation
Financial Reporting/Analysis
Payroll Processing
Payroll Tax Payments
Federal and State Quarterly and Year-End Tax Reporting
New Hire Reporting
W-2 and 1099 Forms
Sales Tax Filings
Internal controls
Job costing
An array of services available from on-site/off-site training, part-time, full-time bookkeeping, consultation, dependent on the company's needs. We service areas all throughout the South Jersey area.
We're LOW COST, AFFORDABLE AND KNOWLEDGEABLE!
Kathryn C. Tiffany, LLC
Voorhees, New Jersey
Phone: 856-803-4651
Email:Kathryn@TiffanyAccounting.com
Web: http://www.TiffanyAccounting.com
Intuit QuickBooks Profile: http://proadvisor.intuit.com/quickbooks-help/kathryn-tiffany
Member of:
American Institute for Professional Bookkeepers
National Bookkeepers Association
Intuit QuickBooks program - Certified QuickBooks ProAdvisor
Association of Certified Fraud Examiners
Voorhees Business Association
Chamber of Commerce
Journal of Accountancy and Accounting Today
Monday, March 13, 2017
Commingling of Business & Personal Funds (And Why It Is A Bad, Bad Idea)
Most business owners know to keep their business assets separate from their personal assets. However, there are many small business owners that do not. This is a bad, bad, idea, both legally and logistically.
If you have paid the money to an attorney or to the government to set up a business entity, whether a L.L.C. or Corporation, the last thing most people want to deal with is administrative problems and difficulties like separating bank accounts and assets. However, this is a very important step to keep the limited liability of your company in tact. In law, there is a business concept called “corporate veil,” meaning the liability shield between the business owner and the business. When you commingle your business and personal funds, creditors can “pierce the corporate veil,” and get into your personal assets through liability through your business. This the the main reason to avoid commingling your funds, although there are also tax reasons.
Today, let’s discuss the legal reasons to not commingle your business and personal funds and the ways to avoid commingling.
How do you “commingle,” and what is “commingling?”
When you commingle your funds, you are treating your business funds as your personal money, whether buying or selling. Some of the most common ways to commingle are:
Transferring money between business and personal accounts without documentation.
Writing business checks for personal reasons/expenses, and vise versa.
Having only one bank account for personal and business needs.
Depositing business checks into your personal bank account.
Withdrawing money from your business account to pay personal expenses without documentation.
It is very important to keep your corporate veil intact. As discussed above, when you commingle, your corporate veil can be pierced. Essentially, all the work that you did when forming the L.L.C. or corporation, such as filling the Articles of Organization, paying attorney or filing fees, and perhaps drafting the Operating Agreement, will be for nothing as far as limiting liability. Creditors can reach your personal assets if you commingle, and there in lies the problem with commingling.
How to avoid commingling.
First of all, the impulse to put your business check into your personal check is understandable for a small business owner. After all, you want to pay yourself and buy more supplies for the business to grow more. However, there are several reasons why you need to deposit the check into the business bank account, and then pay yourself, and also buy business supplies out of the business account.
The first thing you should do is create a separate bank account if you have not already and document all expenses, withdrawals, and deposits. Documenting allows you to become a better bookkeeper for your business, and/or keep better records for taxes. Having better accounting by keeping separate bank accounts and only using business funds for business expenses can help you see how your business is performing, and seeing where you need improvement. It also allows you to keep your personal funds separate and helps create a personal budget since you will not be seeing business funds in your bank account.
Reducing Taxes.
One last benefit we will mention is the benefit to your taxes (and its easier for your CPA). One big benefit is that the IRS does not allow you to deduct business expenses that you cannot document. When you have one business account for personal and business expenses, it is hard to explain to the IRS what you need to deduct and for what purpose. The IRS is a lover of documentation, and by keeping track of your business income and expenses in its own business account is crucial to help minimize taxes and maximizing your deductions.
Many, if not most, small business owners pay more in taxes than they are required to because they do not have an organized system of keeping records and recording expenses. By simply creating a separate business account, and avoid commingling funds by using business money for personal expenses, you can create a more organized and efficient way to reduce liability and taxes.
If you need help organizing and/or creating your business, please contact the office of the Kathryn C. Tiffany, LLC and see if we can help you.
Wednesday, January 4, 2017
Audit notes problems in way city tracks funds
An independent audit of Boulder City found six issues in the way city officials handled accounting of government funds.
The problems were noted during an Audit Review Committee meeting Nov. 30; however, the audit also stated that these issues were not serious or malicious.
Completed by Las Vegas company Piercy Bowler Taylor &Kern CPA, the audit stated a number of finical documents were not consistently turned in on time under the watch of former Boulder City Finance Director Shirley Hughes. That same audit also stated that the mistakes made by city officials were fixable and not malicious.
According to auditors, a number of finical documents were not properly filled out or complete when the city turned in its finical statements for the audit.
“We need to make sure all of these documents are in and complete because it blurs the lines of what the auditors are auditing,” Finance Director Hyun Kim said.
Kim said the best way to fix this problem is to have monthly financial closeouts as well an annual one.
“We are going to create a procedure for month-end closeouts and in addition we will also keep a paper log that either me or the chief accountant will have to sign off on.”
Kim said that this matter was an easy fix that will be completed in 60 days.
The audit also noted that three bank reconciliations were not completed in a timely manner.
A bank reconciliation is the process of balancing a cash account to the corresponding information on a bank statement.
The report noted that while reconciliations were being completed, they were 60-90 days late.
“I had noticed that three separate bank reconciliations had not been completed in a timely manner,” Kim said. “This process is going to take some time, but myself and (City Manager) Dave Fraser have already allocated staff to finish those bank reconciliations.”
Kim said he plans to fix the problem by filing the reconciliations on a monthly basis, a plan that should put the city back on track and better protect it from fraud.
The audit report also noted that the city’s process for adjusting utilities was not adequate. It stated there was no process for approving a change in a utility bill by someone in upper management.
“We noticed that there was not a proper process for adjusting and zeroing out a utility bill and that caused us to lose some very significant dollar amounts,” said Doug Honey, the city’s chief accountant.
Kim recommended fixing the problem by requiring employees to have any utility adjustments approved by someone in management and then keeping a log about what adjustment was approved and who approved it.
Kim said that this problem would be fixed in 60-90 days, but that catching up could take longer.
The final discrepancy noted in the audit also had to do with late filings.
The report states that Boulder City Municipal Airport has not been filing the proper paperwork for federal grants in time. The late reports inform the federal government of annual funds given to the airport. Kim said the reports were getting done but not nearly quick enough.
He said the problem should be fixed in 60-90 days as well.
“This grant money is important and we will make sure the reports are filed in a timely manner from here on out.”
The committee has not set up a date for its next meeting but Councilman Cam Walker said that he hopes to have another meeting in two or three months.
The problems were noted during an Audit Review Committee meeting Nov. 30; however, the audit also stated that these issues were not serious or malicious.
Completed by Las Vegas company Piercy Bowler Taylor &Kern CPA, the audit stated a number of finical documents were not consistently turned in on time under the watch of former Boulder City Finance Director Shirley Hughes. That same audit also stated that the mistakes made by city officials were fixable and not malicious.
According to auditors, a number of finical documents were not properly filled out or complete when the city turned in its finical statements for the audit.
“We need to make sure all of these documents are in and complete because it blurs the lines of what the auditors are auditing,” Finance Director Hyun Kim said.
Kim said the best way to fix this problem is to have monthly financial closeouts as well an annual one.
“We are going to create a procedure for month-end closeouts and in addition we will also keep a paper log that either me or the chief accountant will have to sign off on.”
Kim said that this matter was an easy fix that will be completed in 60 days.
The audit also noted that three bank reconciliations were not completed in a timely manner.
A bank reconciliation is the process of balancing a cash account to the corresponding information on a bank statement.
The report noted that while reconciliations were being completed, they were 60-90 days late.
“I had noticed that three separate bank reconciliations had not been completed in a timely manner,” Kim said. “This process is going to take some time, but myself and (City Manager) Dave Fraser have already allocated staff to finish those bank reconciliations.”
Kim said he plans to fix the problem by filing the reconciliations on a monthly basis, a plan that should put the city back on track and better protect it from fraud.
The audit report also noted that the city’s process for adjusting utilities was not adequate. It stated there was no process for approving a change in a utility bill by someone in upper management.
“We noticed that there was not a proper process for adjusting and zeroing out a utility bill and that caused us to lose some very significant dollar amounts,” said Doug Honey, the city’s chief accountant.
Kim recommended fixing the problem by requiring employees to have any utility adjustments approved by someone in management and then keeping a log about what adjustment was approved and who approved it.
Kim said that this problem would be fixed in 60-90 days, but that catching up could take longer.
The final discrepancy noted in the audit also had to do with late filings.
The report states that Boulder City Municipal Airport has not been filing the proper paperwork for federal grants in time. The late reports inform the federal government of annual funds given to the airport. Kim said the reports were getting done but not nearly quick enough.
He said the problem should be fixed in 60-90 days as well.
“This grant money is important and we will make sure the reports are filed in a timely manner from here on out.”
The committee has not set up a date for its next meeting but Councilman Cam Walker said that he hopes to have another meeting in two or three months.
Monday, January 2, 2017
New Jersey laws taking effect January 1st
NOTICE SALES AND USE TAX RATE CHANGE 6.875%
SALES AND USE TAX RATE
(P.L. 2016, c. 57)
AMENDMENTS TO THE SALES AND USE TAX ACT, EFFECTIVE JANUARY 1, 2017
The New Jersey Sales and Use Tax will be reduced in two phases between 2017 and 2018. P.L. 2016, c. 57 decreases the Sales and Use Tax rate from 7% to 6.875% on and after January 1, 2017. The tax rate will decrease to 6.625% on and after January 1, 2018. This Notice discusses the transition of the Sales and Use Tax to the lower rates.
Changes for Sellers
Sellers must collect and remit the tax at the rate of 6.875% on all taxable sales of tangible personal property, specified digital products, and enumerated services that occur on and after January 1, 2017. This rate will remain in effect until December 31, 2017.
The Division of Taxation has updated ST-75, Sales Tax Collection Schedule, which is effective January 1, 2017. Schedule ST-75 rounds the amount of taxes owed to the nearest full cent. All tax calculations should be rounded accordingly. (See, “How to Calculate the Sales Tax” at left.) The tax rate (6.875%) is not rounded when calculating taxes owed.
Taxable Transactions
The following rules apply to taxable transactions that begin before January 1, 2017, and are completed on or after January 1, 2017, but before January 1, 2018.
Sales Made Before January 1, 2017; Delivery on and After January 1, 2017:
If the tangible personal property or specified digital products are sold and delivered or services are rendered before January 1, 2017, the seller must collect tax at the rate of 7%. If the tangible personal property, specified digital products, or services are sold before January 1, 2017, but the tangible personal property or specified digital products are delivered, or the services rendered on or after January 1, 2017, but before January 1, 2018, the seller must collect tax at the rate of 6.875%.
http://www.state.nj.us
TRENTON -- New tax breaks, a slight bump in the minimum wage, and an opportunity for adopted people to obtain their original birth certificates await New Jerseyans as a plethora of high-impact laws take effect in 2017.
News of the tax cuts was likely overshadowed by the 23-cent per-gallon rise in the gasoline tax that took effect on Nov. 1 to replenish a depleted Transportation Trust Fund for sorely needed transportation projects. Gov. Chris Christie and the Legislature approved the tax cuts to cushion the blow of New Jersey's first increase in the gas tax since 1988.
Those benefits, which include phasing out the estate tax and expanding tax deductions on retirement income are much more than a distraction, said Michele Siekerka, president of the New Jersey Business and Industry Association. She called them a "game changer" for a state that is perennially labeled as one of the most hostile to business owners and affluent taxpayers.
CPAs (certified public accountants) are starting to tell their "snow bird" and wealthier clients that it is okay to retire here, Siekerka said.
"We look at it as a start," she added. "The key now is to leverage the bipartisan momentum and carry it forward to address things that drive up the cost of doing business, like property taxes."
Lawmakers will begin considering bills to raise the gas tax on Thursday.
Liberal-leaning organizations like New Jersey Policy Perspective have criticized the decision to eliminate the estate tax because it helps so few people, but potentially could hurt many more if the loss in revenue leads to cuts in school aid and other important services.
"I don't think there there is all that much for New Jersey families to cheer about here," Policy Perspective Vice President Jon Whiten said. "Factor in a billion in lost revenue when the whole package is phased in and that is some thing families in every income bracket will feel from a lack of services and investment."
Jan. 1 also ushers in hard-fought social policy changes. Adopted people may request to information about their birth parents, and people arrested on minor offenses will spend less time awaiting trial and more reasonable bail requirements under a "seismic shift" in criminal justice practices.
Here are eight ways people who live and work in New Jersey will be affected by new laws in 2017:
1. Phasing out the estate tax
About 3,500 estates, worth at least $675,000, are subject to the estate tax each year. But starting this month, the state will impose the tax on estates worth $2 million or more. The entire tax would end after Jan. 1, 2018.
2. Expanding the Earned Income Tax Credit
The Earned Income Tax Credit for low-income workers get a boost from 30 percent of the federal level to 35 percent. The expansion will benefit about 600,000 New Jerseyans, who will pocket about $200 more from the tax return, Whiten said.
Eligibility depends on income and number of qualifying children. The income limit is about $14,800 for a single, childless adult, and $53,000 for a married couple with three or more children.
3. Reducing the sales tax
The sales tax will decrease from 7 percent to 6.875 percent on Jan. 1, and then from 6.875 percent to 6.625 percent on Jan. 1, 2018. Legislative leaders said Christie was adamant about enacting a sales tax cut when he agreed to raise the gas tax but it may not be noticed by most consumers.
"It's only noticeable if you are making a large purchase," Whiten said. "Generally those who spend that much on consumer goods need the least tax relief."
The state Treasury will feel it, however. The revenue loss would equal about $92.4 million this year, $382 million in 2018, $593 million in 2019, $614 million in 2020, $634 million in 2021 and $655 million in 2022, according to an analysis by the independent, nonpartisan Office of Legislative Services.
4. Expanding tax deduction for retirees
A married couple filing their taxes jointly can currently exclude their first $20,000 in retirement income from state income taxes. But beginning in 2017 and phased in over four years, that amount will ultimately increase to $100,000 for joint filers, $75,000 for individuals and $50,000 for married couples.
5. Tax deduction for veterans
The tax deal introduced a $3,000 tax deduction for veterans. The law defines veterans as those who are "honorable discharged or released under honorable circumstances from active duty in the Armed Forces of the United states, a reserve component thereof, or the National Guard of New Jersey in a federal active duty status."
6. Opening birth certificates sealed at adoption
The state Health Department will begin fulfilling requests from adopted people to obtain their original birth certificates containing information about their parents.
Christie signed the law in 2014, but stipulated that it would not take effect until 2017, in order for the change to be publicized for birth parents who don't want the state to release records identifying them.
Birth parents could have requested to have their named blacked-out if they filed a redaction form before Dec. 31. At any time, they may submit a contact preference form stating whether they wish to have no contact with their child, contact through an intermediary, or unfettered contact. Birth parents who request no contact must also must complete a family history form seeking medical, cultural and social history information about the birth parent.
More information about the law is available on the health department's website, or by calling 866-649-8726.
7. Eliminating bail for some non-violent offenders
One in 12 defendants remains in jail because a bail of $2,500 is too high.
Starting in January, fewer people who commit minor offenses will be held on bail and detained. And if a person is held in jail, prosecutors will have 90 days to seek an indictment from a grand jury, and must bring a person to trial with 120 days.
The changes are based on a 2014 law Christie signed which established an alternative pre-trial release system aimed at keeping poor defendants from going to jail simply because they could not afford bail. That same year, New Jersey approved a constitutional amendment to allow judges to deny bail to offenders who pose serious threats.
The state also intends to hire 20 more judges to help carry out the provisions of the bail reforms.
8. Raising the minimum wage, nominally
New Jersey's minimum wage will go up six cents on Jan. 1 to $8.44 an hour, according to the state Department of Labor and Workforce Development.
It will be New Jerseyans' first increase since January 2015, when it rose from $8.25 an hour to the current $8.38. The minimum wage did not increase this year because there was no rise in the state's cost of living.
The six-cent hike reflects a small bump in the consumer price index, which by constitutional amendment is used to set the minimum wage each year.
Efforts to pass a $15 minimum wage by asking voters to amend the constitution stalled this year.
http://www.nj.com
SALES AND USE TAX RATE
(P.L. 2016, c. 57)
AMENDMENTS TO THE SALES AND USE TAX ACT, EFFECTIVE JANUARY 1, 2017
The New Jersey Sales and Use Tax will be reduced in two phases between 2017 and 2018. P.L. 2016, c. 57 decreases the Sales and Use Tax rate from 7% to 6.875% on and after January 1, 2017. The tax rate will decrease to 6.625% on and after January 1, 2018. This Notice discusses the transition of the Sales and Use Tax to the lower rates.
Changes for Sellers
Sellers must collect and remit the tax at the rate of 6.875% on all taxable sales of tangible personal property, specified digital products, and enumerated services that occur on and after January 1, 2017. This rate will remain in effect until December 31, 2017.
The Division of Taxation has updated ST-75, Sales Tax Collection Schedule, which is effective January 1, 2017. Schedule ST-75 rounds the amount of taxes owed to the nearest full cent. All tax calculations should be rounded accordingly. (See, “How to Calculate the Sales Tax” at left.) The tax rate (6.875%) is not rounded when calculating taxes owed.
Taxable Transactions
The following rules apply to taxable transactions that begin before January 1, 2017, and are completed on or after January 1, 2017, but before January 1, 2018.
Sales Made Before January 1, 2017; Delivery on and After January 1, 2017:
If the tangible personal property or specified digital products are sold and delivered or services are rendered before January 1, 2017, the seller must collect tax at the rate of 7%. If the tangible personal property, specified digital products, or services are sold before January 1, 2017, but the tangible personal property or specified digital products are delivered, or the services rendered on or after January 1, 2017, but before January 1, 2018, the seller must collect tax at the rate of 6.875%.
http://www.state.nj.us
TRENTON -- New tax breaks, a slight bump in the minimum wage, and an opportunity for adopted people to obtain their original birth certificates await New Jerseyans as a plethora of high-impact laws take effect in 2017.
News of the tax cuts was likely overshadowed by the 23-cent per-gallon rise in the gasoline tax that took effect on Nov. 1 to replenish a depleted Transportation Trust Fund for sorely needed transportation projects. Gov. Chris Christie and the Legislature approved the tax cuts to cushion the blow of New Jersey's first increase in the gas tax since 1988.
Those benefits, which include phasing out the estate tax and expanding tax deductions on retirement income are much more than a distraction, said Michele Siekerka, president of the New Jersey Business and Industry Association. She called them a "game changer" for a state that is perennially labeled as one of the most hostile to business owners and affluent taxpayers.
CPAs (certified public accountants) are starting to tell their "snow bird" and wealthier clients that it is okay to retire here, Siekerka said.
"We look at it as a start," she added. "The key now is to leverage the bipartisan momentum and carry it forward to address things that drive up the cost of doing business, like property taxes."
Lawmakers will begin considering bills to raise the gas tax on Thursday.
Liberal-leaning organizations like New Jersey Policy Perspective have criticized the decision to eliminate the estate tax because it helps so few people, but potentially could hurt many more if the loss in revenue leads to cuts in school aid and other important services.
"I don't think there there is all that much for New Jersey families to cheer about here," Policy Perspective Vice President Jon Whiten said. "Factor in a billion in lost revenue when the whole package is phased in and that is some thing families in every income bracket will feel from a lack of services and investment."
Jan. 1 also ushers in hard-fought social policy changes. Adopted people may request to information about their birth parents, and people arrested on minor offenses will spend less time awaiting trial and more reasonable bail requirements under a "seismic shift" in criminal justice practices.
Here are eight ways people who live and work in New Jersey will be affected by new laws in 2017:
1. Phasing out the estate tax
About 3,500 estates, worth at least $675,000, are subject to the estate tax each year. But starting this month, the state will impose the tax on estates worth $2 million or more. The entire tax would end after Jan. 1, 2018.
2. Expanding the Earned Income Tax Credit
The Earned Income Tax Credit for low-income workers get a boost from 30 percent of the federal level to 35 percent. The expansion will benefit about 600,000 New Jerseyans, who will pocket about $200 more from the tax return, Whiten said.
Eligibility depends on income and number of qualifying children. The income limit is about $14,800 for a single, childless adult, and $53,000 for a married couple with three or more children.
3. Reducing the sales tax
The sales tax will decrease from 7 percent to 6.875 percent on Jan. 1, and then from 6.875 percent to 6.625 percent on Jan. 1, 2018. Legislative leaders said Christie was adamant about enacting a sales tax cut when he agreed to raise the gas tax but it may not be noticed by most consumers.
"It's only noticeable if you are making a large purchase," Whiten said. "Generally those who spend that much on consumer goods need the least tax relief."
The state Treasury will feel it, however. The revenue loss would equal about $92.4 million this year, $382 million in 2018, $593 million in 2019, $614 million in 2020, $634 million in 2021 and $655 million in 2022, according to an analysis by the independent, nonpartisan Office of Legislative Services.
4. Expanding tax deduction for retirees
A married couple filing their taxes jointly can currently exclude their first $20,000 in retirement income from state income taxes. But beginning in 2017 and phased in over four years, that amount will ultimately increase to $100,000 for joint filers, $75,000 for individuals and $50,000 for married couples.
5. Tax deduction for veterans
The tax deal introduced a $3,000 tax deduction for veterans. The law defines veterans as those who are "honorable discharged or released under honorable circumstances from active duty in the Armed Forces of the United states, a reserve component thereof, or the National Guard of New Jersey in a federal active duty status."
6. Opening birth certificates sealed at adoption
The state Health Department will begin fulfilling requests from adopted people to obtain their original birth certificates containing information about their parents.
Christie signed the law in 2014, but stipulated that it would not take effect until 2017, in order for the change to be publicized for birth parents who don't want the state to release records identifying them.
Birth parents could have requested to have their named blacked-out if they filed a redaction form before Dec. 31. At any time, they may submit a contact preference form stating whether they wish to have no contact with their child, contact through an intermediary, or unfettered contact. Birth parents who request no contact must also must complete a family history form seeking medical, cultural and social history information about the birth parent.
More information about the law is available on the health department's website, or by calling 866-649-8726.
7. Eliminating bail for some non-violent offenders
One in 12 defendants remains in jail because a bail of $2,500 is too high.
Starting in January, fewer people who commit minor offenses will be held on bail and detained. And if a person is held in jail, prosecutors will have 90 days to seek an indictment from a grand jury, and must bring a person to trial with 120 days.
The changes are based on a 2014 law Christie signed which established an alternative pre-trial release system aimed at keeping poor defendants from going to jail simply because they could not afford bail. That same year, New Jersey approved a constitutional amendment to allow judges to deny bail to offenders who pose serious threats.
The state also intends to hire 20 more judges to help carry out the provisions of the bail reforms.
8. Raising the minimum wage, nominally
New Jersey's minimum wage will go up six cents on Jan. 1 to $8.44 an hour, according to the state Department of Labor and Workforce Development.
It will be New Jerseyans' first increase since January 2015, when it rose from $8.25 an hour to the current $8.38. The minimum wage did not increase this year because there was no rise in the state's cost of living.
The six-cent hike reflects a small bump in the consumer price index, which by constitutional amendment is used to set the minimum wage each year.
Efforts to pass a $15 minimum wage by asking voters to amend the constitution stalled this year.
http://www.nj.com
Thursday, November 17, 2016
Intuit Sees Sales Rise on Increased Quickbook Subscribers: Company issues sales guidance for current quarter that surpasses Street estimates
Intuit Inc., the maker of TurboTax and QuickBooks, posted a 9.1% increase in revenue for its fiscal first quarter, while issuing guidance for the current period that was more optimistic about sales than Wall Street estimates.The company said its QuickBooks Online subscribers rose 41% to 1.6 million.
For the current quarter, the company expects revenue in the range of $1.05 billion to $1.07 billion with adjusted earnings between 33 cents and 36 cents a share. Analysts surveyed by Thomson Reuters forecast revenue of $997.8 million and adjusted per-share profit of 34 cents.
Intuit shares, which rose 17.8% over the past 12 months, fell 0.5% to $113.20 in after-hours trading.
The company typically collects the bulk of its earnings during tax season and often posts losses in its off-tax-season quarters.
For the quarter ended Oct. 31, Intuit posted a loss of $30 million, or 12 cents a share, compared with a year-ago loss of $31 million, or 11 cents a share. Earnings excluding items were 6 cents a share down from 9 cents a year ago.
Revenue rose to $778 million from $713 million.
Intuit projected earnings excluding items of 1 cent to 3 cents a share on revenue of $740 million to $760 million for the latest quarter. Analysts polled by Thomson Reuters projected 3 cents and $756.1 million.
Under a plan announced in 2015, Intuit sold marketing and communications software business Demandforce, collaboration platform QuickBase and personal-finance software brand Quicken earlier this year.
Original article can be found here: http://www.wsj.com
Friday, September 30, 2016
Dual Control: Segregate duties among team members
Inventory is an area of your practice where segregating duties will greatly reduce the risk of theft.
If the person responsible for ordering inventory also receives the inventory and enters it into your computer system, there's no one to verify whether the amount recorded matches what was ordered.
So if 12 cases are ordered and received but only 10 cases are entered into the inventory system, no one will notice that the other two cases ended up in your inventory person's trunk.
Police: Employee steals pain medication from veterinary hospital
A 45-year-old woman is accused of stealing pain medication while working for a local veterinary hospital, police say.
Jennifer Manning was charged with felony embezzlement on Sept. 22 after police say she stole at least 17 bottles of Tramadol from the Jolly Pond Veterinary Hospital, located at 3800 Longhill Road, James City County Police Department spokeswoman Stephanie Williams wrote in an email.
Manning is accused of stealing the medication while accepting deliveries from Feb. 2, 2015 to Sept. 2 as an employee of the veterinary hospital. Police believe she took one full bottle from some deliveries and only logged the remaining bottles, Williams wrote.
Police believe Manning stole about $385 worth of Tramadol. The Drug Enforcement Administration considers the medication a schedule four drug, meaning it has a low potential for abuse and dependence. Other schedule four drugs include Xanax and Valium.
Tramadol is used as a pain killer for moderate and severe pain, including surgical pain. It can become habit forming if used for a long time, according to the Mayo Clinic.
Manning’s case is scheduled to be heard in Williamsburg-James City County General District Court on Oct. 4.
Source: http://wydaily.com
A dual control system requires the authorization or approval of two individuals to complete a transaction.
One individual should not be responsible for an entire financial transaction from beginning to finish.
The dual control system puts a second set of eyes on transactions, greatly lessening the risk of embezzlement.
Inventory Management:
One person orders. A different person receives in the order. All purchase orders should be forwarded/transmitted to bookkeeping.
If the person responsible for ordering inventory also receives the inventory and enters it into your computer system, there's no one to verify whether the amount recorded matches what was ordered.
So if 12 cases are ordered and received but only 10 cases are entered into the inventory system, no one will notice that the other two cases ended up in your inventory person's trunk.
Police: Employee steals pain medication from veterinary hospital
A 45-year-old woman is accused of stealing pain medication while working for a local veterinary hospital, police say.
Jennifer Manning was charged with felony embezzlement on Sept. 22 after police say she stole at least 17 bottles of Tramadol from the Jolly Pond Veterinary Hospital, located at 3800 Longhill Road, James City County Police Department spokeswoman Stephanie Williams wrote in an email.
Manning is accused of stealing the medication while accepting deliveries from Feb. 2, 2015 to Sept. 2 as an employee of the veterinary hospital. Police believe she took one full bottle from some deliveries and only logged the remaining bottles, Williams wrote.
Police believe Manning stole about $385 worth of Tramadol. The Drug Enforcement Administration considers the medication a schedule four drug, meaning it has a low potential for abuse and dependence. Other schedule four drugs include Xanax and Valium.
Tramadol is used as a pain killer for moderate and severe pain, including surgical pain. It can become habit forming if used for a long time, according to the Mayo Clinic.
Manning’s case is scheduled to be heard in Williamsburg-James City County General District Court on Oct. 4.
Source: http://wydaily.com
A dual control system requires the authorization or approval of two individuals to complete a transaction.
One individual should not be responsible for an entire financial transaction from beginning to finish.
The dual control system puts a second set of eyes on transactions, greatly lessening the risk of embezzlement.
Inventory Management:
One person orders. A different person receives in the order. All purchase orders should be forwarded/transmitted to bookkeeping.
Saturday, September 24, 2016
The Fraud Triangle
Incentive ... Opportunity ... Rationalize = The Fraud Triangle as a three legged stool -------> Take away a leg! Business owners must be proactive in preventing fraud/embezzlement!
MINIMIZE OPPORTUNITY! Companies should always be looking to minimize the opportunity for fraud and unethical behavior. Kathryn C. Tiffany, LLC of Voorhees, New Jersey can assist with this. Working as a outside certified bookkeeper, Kathryn C. Tiffany, LLC can help companies analyze operations, review internal controls and address any current or future vulnerabilities. It is a worthwhile investment for any organization that wants to remain secure against the hazards of fraud. Internal controls a must for businesses!
$19K stolen from Mount Laurel medical office:
MOUNT LAUREL – Two former employees stole thousands of dollars from a medical office by forging checks, authorities said.
The crimes against the Briggs Road office, which police did not identify, occurred over a period of at least five months starting in March. The owner discovered the thefts last month, police said.
One of the suspects, 29-year-old Andrea D. Lecklikner of Turnersville, was arrested Thursday on charges of theft by deception and conspiracy. Police said she forged checks totaling $4,959 in New Jersey and Pennsylvania.
A second suspect, 29-year-old Brittany Mulholland of Sewell, remains at large, police said Friday. She forged checks totaling $14,412, according to police, who obtained warrants charging her with computer criminal activity, theft by deception and conspiracy.
Original article can be found here: http://www.courierpostonline.com
UNDERSTANDING THE FRAUD TRIANGLE
The three factors that make up the fraud triangle are:
Pressure. Most individuals require some form of pressure to commit a criminal act. This pressure does not need to necessarily make sense to outside observers, but it does need to be present. Pressures can include money problems, gambling debts, alcohol or drug addiction, overwhelming medical bills. Greed can also become a pressure, but it usually needs to be associated with injustice. “The company has not been paying me what I am really worth,” for instance.
Opportunity. An opportunity to commit the act must be present. In the case of fraud, usually a temporary situation arises where there is a chance to commit the act without a high chance of being caught. Companies that are not actively working to prevent fraud can present repeated opportunities to individuals who meet all three criteria of the fraud triangle.
Rationalization. The mindset of a person about to commit an unethical act is one of rationalization. The individual manages to justify what he or she is about to do. Some may think they are just going to borrow the stolen goods, or that they need the money more than the “big” company they are stealing from.
POLICE BLOTTER:
THEFT/ARREST: In August 2016 the owner of a medical office on Briggs Road reported that two former employees had been stealing money from the business over a period of time.
The investigation revealed that between March 2016 and August 2016 employee Andrea D. Lecklikner, age 29, of Turnersville, NJ cashed forged checks at various locations in New Jersey and Pennsylvania totaling $4,959.00.
A warrant for her arrest was obtained charging her with theft by deception and conspiracy to commit theft by deception.
On September 22nd she turned herself into police.
She was released pending a court hearing after posting 10% of $25,000.00 bail.
The investigation also revealed that a second employee, Brittany Mulholland, age 29, of Sewell, NJ cashed forged checks at various locations in New Jersey and Pennsylvania totaling $14,412.00.
Mulholland also accessed the computerized payment system of the business and stole an additional $8,985.27.
Warrants were obtained charging Mulholland with computer criminal activity, theft by deception, and conspiracy to commit theft by deception.
Mulholland remains at large.
- Mount Laurel Police Department
MINIMIZE OPPORTUNITY! Companies should always be looking to minimize the opportunity for fraud and unethical behavior. Kathryn C. Tiffany, LLC of Voorhees, New Jersey can assist with this. Working as a outside certified bookkeeper, Kathryn C. Tiffany, LLC can help companies analyze operations, review internal controls and address any current or future vulnerabilities. It is a worthwhile investment for any organization that wants to remain secure against the hazards of fraud. Internal controls a must for businesses!
$19K stolen from Mount Laurel medical office:
MOUNT LAUREL – Two former employees stole thousands of dollars from a medical office by forging checks, authorities said.
The crimes against the Briggs Road office, which police did not identify, occurred over a period of at least five months starting in March. The owner discovered the thefts last month, police said.
One of the suspects, 29-year-old Andrea D. Lecklikner of Turnersville, was arrested Thursday on charges of theft by deception and conspiracy. Police said she forged checks totaling $4,959 in New Jersey and Pennsylvania.
A second suspect, 29-year-old Brittany Mulholland of Sewell, remains at large, police said Friday. She forged checks totaling $14,412, according to police, who obtained warrants charging her with computer criminal activity, theft by deception and conspiracy.
Original article can be found here: http://www.courierpostonline.com
UNDERSTANDING THE FRAUD TRIANGLE
The three factors that make up the fraud triangle are:
Pressure. Most individuals require some form of pressure to commit a criminal act. This pressure does not need to necessarily make sense to outside observers, but it does need to be present. Pressures can include money problems, gambling debts, alcohol or drug addiction, overwhelming medical bills. Greed can also become a pressure, but it usually needs to be associated with injustice. “The company has not been paying me what I am really worth,” for instance.
Opportunity. An opportunity to commit the act must be present. In the case of fraud, usually a temporary situation arises where there is a chance to commit the act without a high chance of being caught. Companies that are not actively working to prevent fraud can present repeated opportunities to individuals who meet all three criteria of the fraud triangle.
Rationalization. The mindset of a person about to commit an unethical act is one of rationalization. The individual manages to justify what he or she is about to do. Some may think they are just going to borrow the stolen goods, or that they need the money more than the “big” company they are stealing from.
POLICE BLOTTER:
THEFT/ARREST: In August 2016 the owner of a medical office on Briggs Road reported that two former employees had been stealing money from the business over a period of time.
The investigation revealed that between March 2016 and August 2016 employee Andrea D. Lecklikner, age 29, of Turnersville, NJ cashed forged checks at various locations in New Jersey and Pennsylvania totaling $4,959.00.
A warrant for her arrest was obtained charging her with theft by deception and conspiracy to commit theft by deception.
On September 22nd she turned herself into police.
She was released pending a court hearing after posting 10% of $25,000.00 bail.
The investigation also revealed that a second employee, Brittany Mulholland, age 29, of Sewell, NJ cashed forged checks at various locations in New Jersey and Pennsylvania totaling $14,412.00.
Mulholland also accessed the computerized payment system of the business and stole an additional $8,985.27.
Warrants were obtained charging Mulholland with computer criminal activity, theft by deception, and conspiracy to commit theft by deception.
Mulholland remains at large.
- Mount Laurel Police Department
Friday, September 9, 2016
Reminder: October 15th Tax Deadline Remains During Appropriations Lapse
Everyone is eligible for an automatic tax deadline extension and the first thing you should do if you missed the tax filing deadline is file for an extension with the IRS.
This gives you until October 15th to file your taxes.
However, you should also know that if you owe the IRS money, it is due on April 15th. So even if you file for a tax deadline extension, you need to send in an estimate of the taxes you owe.
Failure to do so can result in fines or penalties.
There are no penalties or fees for not filing for an extension if you don’t owe the IRS any money.
Sunday, July 24, 2016
We take care of your financials so you can get back to the job of running your business and generating profits
We put hours back in your day and, most importantly, we provide insight.
We review your Profit & Loss and Balance Sheet statements to make sure they show the true condition of your business.
What parts of your business are driving revenue?
Which ones cost you money?
Cash management generally is not a problem in and of itself; it is a symptom of other problems.
With small businesses cash management is crucial.
It is a common misconception that a business owner "loses control" of their finances if they outsource bookkeeping.
With us, that couldn't be further from the truth.
Kathryn C. Tiffany, LLC
Voorhees, NJ
(856) 803-4651
Wednesday, July 13, 2016
Enter barter with transaction history in QuickBooks
Exchanging goods or services on a non-cash basis with a customer that is also a vendor is commonly referred to as bartering. A common scenario is that your customer also sells you goods or services, and you are going to “swap” and not pay each other for the items purchased from each other.
To track the exchange of goods or services, follow the steps mentioned below:
1. From the menu bar, select Lists, Chart of Accounts
2. From the Account drop-down list at the bottom left, select New to create a new bank account and type the name Bartering
Note: This bank account will always have a net zero balance if the transactions are recorded properly.
3. Click Save & Close.
4. From the menu bar, select Vendor, Enter Bills to record your vendor bill as if you were going to make the purchase from the vendor.
5. From the menu bar, select Vendor, Pay Bills. The Pay Bills dialog box opens. Select the bill for the vendor you will barter with.
6. In the Pay Bills dialog box, select the Bartering Account as the payment account
7. On the Home page, click the Customers button to open the Customers Center
8. From the customers list select the customer or job you will be bartering with
9. From the Customers Center, in the New Transactions drop-down list, select Invoices. Prepare the invoice to the new customer (also your vendor) using the same items on the invoice as if you were selling them to a customer. Click Save & Close.
10. From the Customers Center, in the New Transactions drop-down list, select Receive Payments. Record the fictitious payment from the customer (your vendor). Click Save & Close.
11. Depending on how your preferences are set up for customer payments, deposit the fictitious customer payment into the same Bartering bank account created earlier.
Note:- QuickBooks will not allow the same name to reside on multiple lists. To get around this limitation, when creating the customer name for your vendor, create the same name in customers list and add letter C with a dash(for example if the vendor name is John add it in customers as John-C)
To track the exchange of goods or services, follow the steps mentioned below:
1. From the menu bar, select Lists, Chart of Accounts
2. From the Account drop-down list at the bottom left, select New to create a new bank account and type the name Bartering
Note: This bank account will always have a net zero balance if the transactions are recorded properly.
3. Click Save & Close.
4. From the menu bar, select Vendor, Enter Bills to record your vendor bill as if you were going to make the purchase from the vendor.
5. From the menu bar, select Vendor, Pay Bills. The Pay Bills dialog box opens. Select the bill for the vendor you will barter with.
6. In the Pay Bills dialog box, select the Bartering Account as the payment account
7. On the Home page, click the Customers button to open the Customers Center
8. From the customers list select the customer or job you will be bartering with
9. From the Customers Center, in the New Transactions drop-down list, select Invoices. Prepare the invoice to the new customer (also your vendor) using the same items on the invoice as if you were selling them to a customer. Click Save & Close.
10. From the Customers Center, in the New Transactions drop-down list, select Receive Payments. Record the fictitious payment from the customer (your vendor). Click Save & Close.
11. Depending on how your preferences are set up for customer payments, deposit the fictitious customer payment into the same Bartering bank account created earlier.
Note:- QuickBooks will not allow the same name to reside on multiple lists. To get around this limitation, when creating the customer name for your vendor, create the same name in customers list and add letter C with a dash(for example if the vendor name is John add it in customers as John-C)
Wednesday, June 15, 2016
New Jersey Sales Tax as it applies to the Temporary Staffing Industry
Why you need to read this article!
Many staffing firms and their clients in New Jersey believe that temporary staffing services are not subject to New Jersey’s Sales Taxes. In the vast majority of situations served by the temporary staffing industry this is true. But not all!
This Legal Resource document has been written specifically with the purpose of pointing out to staffing firms and their clients that New Jersey does apply sales tax liability to the provision of temporary staffing services that fall under certain specific service categories.
Since there is a “cost” to not collecting and remitting sales taxes when required, the document also has a section on who is liable for sales tax payments, the associated record keeping requirements and a brief description of the interest and penalties imposed by the State of New Jersey for failure to report and/or pay sales taxes in a timely and accurate manner.
NOTE especially the section detailing how sales tax liability is not only a firm obligation but also can be a personal liability for owners and managers of the firm as well.
This document has been provided to inform the staffing industry of its sales tax requirements and also to be shared with the client as a resource defending the staffing firm’s position that sales tax applies. References have been provided for the reader to research this subject further.
This document however is designed to be general and informational. Therefore each situation will be case-specific and needs to be evaluated by the firm’s professional advisor to determine the direct sales tax application to the firm and its client.
There is a core difference between how New Jersey treats the sale of tangible personal property and the sale of services for sales tax purposes. New Jersey Statute, N.J.S.A 54:32B-3(a) provides that all retail sales of tangible personal property are subject to sales tax unless specifically exempt and sales of services are exempt unless specifically enumerated as taxable. N.J.S.A 54:32B-3(b) lists the services that are subject to sales tax.
Temporary services are not listed as taxable and therefore appear not to be subject to New Jersey sales tax.
However, the November/December 1990 New Jersey State Tax News specifically addresses “Temporary Service Contractors”. It differentiates between employment agencies that merely refer people and collect a fee and a temporary staffing agency that employs temporary staff and provides them to clients for a fee. Referring people for a fee is exempt from New Jersey sales tax while temporary staffing services could be subject to New Jersey sales tax.
The 1990 notice states: “when an individual is required to perform taxable services, the service contractor is required to collect sales tax on the fee charged to the client.” For example, both a temporary staffing agency and a security firm are required to collect New Jersey sales tax on their fee for supplying a security guard to their respective client since security services are a taxable service in New Jersey.
The following is a list of services subject to New Jersey sales tax. Therefore, a temporary staffing agency that provides temporary staff that performs any of these services is required to collect and remit New Jersey sales tax on the fees associated with such services. This list is general (specific details of requirements need to be researched), subject to change, and is not necessarily all-inclusive.
Taxable Services in New Jersey:
Animal grooming
Answering services
Car washing
Carpet cleaning
Cleaning services (janitorial)
Floor covering installation
Garbage removal (non-contractual)
Information Technology (see below)
Installing personal property
Investigation and Detective services
Landscaping
Lawn mowing
Massage
Pest control treatment
Photographer’s services
Producing personal property
Repairs of personal and real property
Scanning
Security Guard and Patrol services
Snow removal
Window washing
Note that “Installing personal property” and “Repairs of personal and real property” includes the supply of craft labor (mechanics, welders, painters, electricians, plumbers, technicians, and similar job titles) for purposes of installing or repairing production machinery, equipment and/or buildings for clients, irrespective of whether or not the temporary staff is managed by the client.
Information Technology-Related Staffing Services
The following section evaluates the various types of IT related staffing services that are subject to sales tax.
A temporary staffing agency that provides temporary staff to a client is required to collect and remit New Jersey sales tax if the temporary staff performs one of the following services:
Software installation
Hardware repair and maintenance
Software maintenance contracts that include delivery of taxable software via tangible storage media
Software maintenance contracts that include delivery of taxable software electronically unless used directly and exclusively in conduct of purchaser’s business.
A temporary staffing agency that provides temporary staff to a client is NOT required to collect and remit New Jersey sales tax if the temporary staff performs one of the following services:
Computer consulting
Training
Data processing
Creation or modification of software
Software maintenance contracts (training, consultation, customer support only, no software provided)
Sales for Resale or Other Exemptions
Sellers may discharge their liability for collecting the sales tax due from their customers by taking a sale-for-resale certificate (NJ Form ST-3) or other exemption certificate. An exemption is allowed for services purchased with the intention to resell them in the form purchased or as a component of other services. The tax does not apply at the time of the purchase for resale, but does apply at the time the services are resold at retail. The Seller who accepts the certificate must maintain a record that associates the sale for resale with the exemption certificate on file.
For example, if a temporary staffing agency provides a temporary security guard to a security firm (that provides security services to corporations), the security firm is permitted to provide the temporary staffing agency with a sale for resale exemption certificate thereby relieving the temporary staffing agency from collecting and remitting sales tax on the taxable services of the security temporary staff. The security firm is required to collect and remit sales tax on its taxable security services that it provides to its corporate customer. On the other hand if a temporary staffing agency assigned an individual as a security guard to a client (i.e. a manufacturing plant), then the temporary staffing agency is required to collect and remit New Jersey sales tax on such services.
Liability for Sales Tax Payments and Penalties and Interest
Obligation of the Seller (Temporary Staffing Agency)
New Jersey sales tax is imposed on purchasers of goods and services (hereafter “customers”) but collected by Sellers who have “nexus” in the State. Nexus is defined as the minimum level1 of business activity that allows a state to impose taxes on such business activity or require the entity to collect and remit sales/use tax. All New Jersey Sellers (i.e., both New Jersey based and out-of-state Sellers) that meet the nexus threshold are required to file a Certificate of Registration with the New Jersey Division of Revenue and obtain a Certificate of Authority which empowers the Seller to collect and remit sales tax in New Jersey. A Seller’s failure to obtain a Certificate of Authority does not relieve the Seller of the obligation to collect and remit the tax.
Obligation of the Customer (Client)
N.J. Rev. Stat. §54:32B-12(a) provides that Sellers are to collect New Jersey sales tax from the customer when collecting the sales price to which the tax applies. Customers that fail to pay the Seller the applicable New Jersey sales tax are required to pay the tax directly to the State. N.J. Rev. Stat. §54:32B-14(b). New Jersey can legally recover the sales tax due from either the Seller or the customer. A contract between the Seller and the customer, delegating the sales tax liability to one party, does not preclude the State from legally seeking such liability from either party.
Sellers have the same legal rights to collect New Jersey sales tax from their customers as if the tax is a part of the purchase price of the service. The State must be joined as a party in any action or proceeding brought by a Seller to collect the tax due from the customer. N.J. Rev. Stat. §54:32B-14(a).
Personal Liability
N.J. Stat. § 54:32B-14(a) states that “every person required to collect any tax imposed by this act shall be personally liable for the tax imposed, collected or required to be collected under this act”. In other words, New Jersey holds “persons required to collect the tax” (at a Seller) personally liable for any uncollected sales tax due from customers on taxable products and services. N.J. Rev. Stat. § 54:32B-2(W) states that “persons required to collect tax” includes any officer or employee of a corporation or of a dissolved corporation who as such officer or employee is under a duty to act for such corporation in complying with any requirement of this act and any member of a partnership. With respect to Limited Liability Companies, all members of such entity (regardless of their involvement in the business) are deemed to be a person required to collect tax, and therefore personally liable for unpaid sales tax.
In Hapag-Lloyd A.G. v. Director, 7 NJ Tax 108 (1984) and Theryoung v. Director, Dkt. No. 02-19-0409-89ST, 1-6-93 (Not Approved for Publication) an officer of a corporation with limited participation in the affairs of the corporation was held to be a responsible officer for purposes of personal liability imposed on persons required to collect taxes. New Jersey Courts have adopted the position that does not permit an abdication of the responsibility for the collection of sales tax and other trust fund taxes. The officer and his wife were owners of 80% of the corporate stock of a company engaged in the construction and set-up of advertising displays. The officer never visited the location of the business during most of the period that the sales tax deficiencies occurred, an arrangement agreed on with the two other shareholders when they purchased the business. The officer was aware of the poor financial condition of the company as a result of off-site meetings held with the other officers. He also had the authority to hire and fire employees and signed the New Jersey CBT-100 as president of the corporation.
Returns and Payments
All Sellers are required to file quarterly sales tax returns and remit the tax due on a quarterly basis. Sellers whose monthly sales tax liability exceeds $500 in the first or second month of any quarterly filing period are required to file a monthly sales tax report and remit the tax due for that month. Quarterly returns and payments are due on or before the 20th day of the month following the close of the quarter. Monthly returns and payments are due on or before the 20th day of the following month.
Record Keeping Requirements
Sellers required to be registered in New Jersey must keep accurate books and records including a true copy of all sales slips, invoices, receipts, statements, etc. issued to customers for a period of 4 years (i.e., statute of limitations). If a Seller’s records are determined to be incorrect or insufficient, any sales tax returns filed on the basis of such records can also be deemed to be incorrect or insufficient. In such case, the State may determine the Seller’s tax liability based on any reasonable methodology or information available.
Interest and Penalties
Sellers that fail to timely remit sales tax collected are subject to interest at the rate of 3% above the prime rate, per month or fraction of a month during which the deficiency remains, from the original tax payment due date until the actual date of payment. Interest is compounded annually. In addition, any amount of New Jersey sales tax that remains unpaid after the due date is considered an underpayment and subjects the Seller to a penalty of 5% of the underpayment.
Sellers that fail to timely file a required sales /use tax return with the State are liable for a late filing penalty of 5% of the tax due per month or fraction of a month during which the sales tax return remains late, but is capped at 25% of the tax due. An additional penalty of $100 per month or fraction of a month during which the return remains delinquent may be imposed. This penalty is imposed on the first day following the original return due date and on the same calendar day of each succeeding month thereafter.
For example, assume an out-of-state Seller began providing taxable services to a New Jersey based customer in October 2009. The prime rate was 5% throughout the entire applicable time period. The Seller should have collected $1,000 in New Jersey sales tax for the customer. The Seller then files and pays the outstanding liability on May 15, 2010. The Seller would now potentially owe New Jersey the following:
$1,000 in tax,
$500 for late filing of a return (sales tax return was due January 20, 2010…..penalty is $100 per month or fraction of a month …..Jan, Feb, March, April, May),
$250 penalty for late filing (5% per month for 5 months),
$50 penalty for late payment of taxes due (5%),
And approximately $35 in interest (balance due x 8% per annum x 5 months)
Total New Jersey sales tax liability is $1,835 including penalties and interest.
Please contact your tax professional for assistance in assessing your specific situation.
Links:
New Jersey Statute, N.J.S.A 54:32B-3 (http://law.onecle.com/new-jersey/54-taxation/32b-3.html)
New Jersey Sales Tax Guide
(http://www.state.nj.us/treasury/taxation/pdf/pubs/sales/su4.pdf)
NJ Technical Bulletin-Taxability of Software
(http://www.state.nj.us/treasury/taxation/pdf/pubs/tb/tb51.pdf)
1 The United States Supreme Court (hereafter, the “Court”) ruled in Quill Corporation v. North Dakota, 504 US 298 (1992), that an entity must have “substantial nexus” with a state before such state can impose a tax on the entity. The Court defined “substantial nexus” in terms of a seller’s physical presence, holding that a state may not require a seller to collect tax from its residents if the seller’s only contact with customers in the state was via U.S. mail or common carrier. In other words, The Court concluded, a company needs to have a physical presence in a state before such state can require the company to collect and remit sales tax. The Court went further and stated that the entity’s in-state physical presence must be more than the “slightest presence”. The Court did not create a bright line test to determine when an entity’s in-state activities exceed the slightest presence test but left it to the states to interpret The Court’s decision. There is divergent authority on whether the Court’s ruling in Quill, which requires a physical presence, applies to non-sales taxes (i.e., income/franchise taxes)
Monday, May 30, 2016
Sunday, May 15, 2016
Conducting Internal Investigations
It seems that employees love to complain about anything, and it seems impossible to investigate everything. When employees feel, however, that you are not taking their complaints seriously enough or that you are ignoring them, they will find external sources for their complaints. These external sources range anywhere from the EEOC, the NLRB, Wage and Hour, private attorneys, and juries!! And juries love to punish you when they feel that you ignored an employee's legitimate complaint.
But what are legitimate complaints?
We all know that an employer has a legal responsibility to investigate some complaints but not others. Can you make the distinction?
How you handle internal complaints can make all the difference of whether an employee goes externally with their complaints. It can make all the difference in whether the government or jury will find that you took immediate action and took prompt remedial action for legitimate complaints.
Friday, May 6, 2016
Record Retention: Read This Before Tossing Old Tax Records
Generally, we keep tax records for two basic reasons: (1) in case the IRS or a state agency decides to question the information reported on our tax returns, and (2) to keep track of the tax basis of our capital assets so that the tax liability can be minimized when we dispose of them.
With certain exceptions, the statute for assessing additional taxes is three years from the return due date or the date the return was filed, whichever is later. However, the statute of limitations for many states is one year longer than the federal law. In addition to lengthened state statutes clouding the recordkeeping issue, the federal three-year assessment period is extended to six years if a taxpayer omits from gross income an amount that is more than 25 percent of the income reported on a tax return. And, of course, the statutes don’t begin running until a return has been filed. There is no limit where a taxpayer files a false or fraudulent return to evade taxes.
If an exception does not apply to you, for federal purposes, most of your tax records that are more than three years old can probably be discarded; add a year or so to that if you live in a state with a longer statute.
Examples - Sue filed her 2011 tax return before the due date of April 15, 2012. She will be able to dispose of most of the 2011 records safely after April 15, 2015. On the other hand, Don files his 2011 return on June 2, 2012. He needs to keep his records at least until June 2, 2015. In both cases, the taxpayers may opt to keep their records a year or two longer if their states have a statute of limitations longer than three years. Note: If a due date falls on a Saturday, Sunday or holiday, the due date becomes the next business day.
The big problem! The problem with the carte blanche discarding of records for a particular year because the statute of limitations has expired is that many taxpayers combine their normal tax records and the records needed to substantiate the basis of capital assets. These need to be separated and the basis records should not be discarded before the statute expires for the year in which the asset is disposed. Thus, it makes more sense to keep those records separated by asset. The following are examples of records that fall into that category:
Stock acquisition data - If you own stock in a corporation, keep the purchase records for at least four years after the year the stock is sold. This data will be needed to prove the amount of profit (or loss) you had on the sale.
Stock and mutual fund statements (If you reinvest dividends) - Many taxpayers use the dividends they receive from stocks or mutual funds to buy more shares of the same stock or fund. The reinvested amounts add to the basis in the property and reduce gain when it is finally sold. Keep statements at least four years after the final sale.
Tangible property purchase and improvement records - Keep records of home, investment, rental property, or business property acquisitions AND related capital improvements for at least four years after the underlying property is sold.
For example, when the large $250,000 and $500,000 home exclusion was passed into law several years back, homeowners became lax in maintaining home improvement records, thinking the large exclusions would cover any potential appreciation in the home’s value. Now that exclusion may not always be enough to cover sale gains, particularly in markets where property values have steadily risen, so records of home improvements are vital. Records can be important, so please use caution when discarding them.
What about the tax returns themselves? While disposing of the back-up documents used to prepare the returns can usually be done after the statutory period has expired, you may want to consider keeping a copy of your tax returns (the 1040 and attached schedules/statements plus your state return) indefinitely. If you just don’t have room to keep a copy of the paper returns, digitizing them is an option.
If you have questions about whether or not to retain certain records, give Kathryn a call first; it is better to make sure, before discarding something that might be needed down the road.
Wednesday, April 27, 2016
QuickBooks: Expand Functionality with Custom Fields
QuickBooks’ structure is universal enough to appeal to millions of small businesses. But not all small businesses are alike. Custom fields help you shape it to meet your company’s unique needs.
If you’re using QuickBooks, you probably know that you’re complying with the rules of double-entry accounting. The software is designed such that you can be compliant with these requirements without even being aware of it. You’re dealing with invoices, purchase orders, bank account reconciliation, bill-paying, and payroll; not debits and credits and journal entries. QuickBooks does the double-entry part for you in the background.
While every business that uses QuickBooks is following those same double-entry accounting rules, each has its own unique structure and its own need to modify some elements of the program to do certain tasks, for example:
- Store more specific information about customers, vendors, and employees in their records,
- Differentiate between variations of similar inventory items, and,
- Create more targeted reports.
This is where custom fields come in.
Cash vs. Accrual Accounting Methods
Under IRS definition, an accounting method is a set of rules used to determine when and how income and expenses are reported.
Normally for IRS purposes, the accounting method; cash vs accrual is chosen before you file the first business income tax return. It must then be used on a consistent basis for the life of the business, unless changes in the business occur that statutorily necessitate a change in the accounting method. If you wish to change methods for particular reasons of your own, you must get written permission from the IRS.
When you bill the client, when you actually receive the money and bank it, and when the job and its guarantees reach completion can each define when you have to report the income.
Normally, you calculate your income and expenses by using three major methods: 1) Cash Method; 2) Accrual Method; or 3) Hybrid Method in which select elements of cash and accrual are combined.
Normally for IRS purposes, the accounting method; cash vs accrual is chosen before you file the first business income tax return. It must then be used on a consistent basis for the life of the business, unless changes in the business occur that statutorily necessitate a change in the accounting method. If you wish to change methods for particular reasons of your own, you must get written permission from the IRS.
When you bill the client, when you actually receive the money and bank it, and when the job and its guarantees reach completion can each define when you have to report the income.
Normally, you calculate your income and expenses by using three major methods: 1) Cash Method; 2) Accrual Method; or 3) Hybrid Method in which select elements of cash and accrual are combined.
Sunday, April 24, 2016
West Berlin: An in-between place with plenty of its own to offer
One in a continuing series spotlighting real estate markets in the region's communities.
There's more than just one Berlin at the end of Haddonfield-Berlin Road in Camden County.
Today's destination is Berlin Township, also known as West Berlin, which refers to the unincorporated community where most residents live.
As confusing as it all is - especially when you toss in Berlin Borough, which was created from the township by referendum in 1927 - convenience is the word Realtor Val Nunnenkamp applies to this community of 5,362.
"Convenient location," Nunnenkamp says.
"It is between the borough and Voorhees," says Nunnenkamp, an agent with Berkshire Hathaway HomeServices Fox & Roach Realtors in Marlton, and "that means shopping and other amenities those two communities offer are convenient" - though the township has plenty to offer, as well.
"Most people don't realize you pay 8 percent to 12 percent less for houses in the township than you do in the borough, and 12 percent to 17 percent less than for homes in Voorhees," he says.
There is little home construction in Berlin Township, he says, except for the "very popular" over-55 community Montebello, being developed by J.S. Hovnanian & Sons, with homes starting at $299,000.
"I've sold 12 homes there," Nunnenkamp says. "With prices averaging $340,000 to $540,000, it is by far the most expensive neighborhood in Berlin Township."
Otherwise, there is not much land available for building, he notes - though that wasn't always the case.
The first major development built in Berlin Township was Berlin Estates, off Harker Avenue, which was opened in 1956.
"The houses were designed as entry-level homes for veterans, and were 870 square feet, with three bedrooms and one bath - five rooms being the standard model," Nunnenkamp says.
The houses were built on slabs, so there were no basements. The price: $10,000.
"Roses were grown on the property where the houses were built, so the builder called the entrance 'Rose Lane,' " Nunnenkamp says.
In the intervening 60 years, homeowners have added on, often an extra 500 or 600 square feet, and the average sale price is now $149,900 "if beautiful," he says.
That's an average of $1.30 a square foot, Nunnenkamp says, adding that "if you still own an original little 'box,' it is $1.15 to $1.20 a foot."
Pinecrest, off Franklin Avenue, came along next, in 1962, he says.
"These bi-levels, split-levels, ranchers, and two-story homes sold for $12,000 to $20,000 originally," Nunnenkamp says.
Homes in Pinecrest also have been updated and expanded - they did have basements - and now sell for $160,000 to $230,000, he says.
Centaurion Woods - bi-levels, ranchers and two-story homes - behind the Berlin Township Police Department building was built in 1973 with homes that originally sold for $48,000 to $65,000.
"It isn't as popular as some other locations," Nunnenkamp says, probably because of its closeness to busy Route 73 and the fact that the development was built among older bungalows.
Two active listings in Centaurion Woods are priced at $145,000 and $157,000, Trend Multiple Listing Service data show.
Other than at Montebello, prices typically fall into the $150,000 to $250,000 range, meaning that Berlin Township is a perfect address for the first-time buyer, Nunnenkamp says - "a nice little starter home for the money in a nice little town."
In the last six months, there were 49 sales here. Currently, 19 sales are pending, and there are 42 active listings. The average property tax bill in the township is $6,074, up 2.6 percent from 2014.
"Berlin has a little downtown along Haddonfield Road, Route 561, three ballparks and a playground, lots of stores and places to eat," Nunnenkamp says.
Most popular are Sundaes ice cream shop on Route 73 and Sprinklz on Haddon Avenue, which draw customers from 30 miles away, he says.
"Los Amigos and Oceanos Family Restaurant have been there for 40 years," he says. And then there's Jersey Joe's Hoagies and Deli on Haddon Avenue - before or after the homemade sea salt caramel water ice at Sprinklz.
Read more at http://www.philly.com
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