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Xero Find & Recode

4/21/2015

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First, congrats to Xero on a universal 'find'. They've introduced a way to search globally for the first time. Yay! While I've only used this a few times (it was released yesterday) this brings Xero closer to what Quickbooks does with ctrl+f.  The 'find' process isn't as efficient as pressing 'ctrl-f'...but it now exists. This is a step in the right direction towards functional parity with the current market leader. 
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The 'recode' function is a big step, too.  Now you can effectively 'merge' accounts (okay, technically, not merge...but effectively move all the transactions out of one account and into another...and then you'd have to archive the old account). The recode process also makes using tracking categories less burdensome. The Xero recode is actually quite like the accountant version reclassify feature in the desktop version of Quickbooks. These new features eliminate the need to edit transactions 1x1 and effectively shave the functional lead that Quickbooks has had over Xero prior to this in this area.

I would be remiss if I did't  mention that some Xero community members were expecting this sooner. However, from my perspective, overall, this is a much needed step forward.
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Post Tax Season

4/17/2015

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April 15th has come and gone yet again. Thank you to all who did tax business with us this year and filed on time. For those who filed extensions, we look forward to helping you complete your 2014 tax filings. 

For now, we move our focus to bookkeeping and accounting. The best time for planning for next year is the present. Good bookkeeping and reporting can help you manage your small business during 2015, so that by the end of the year, gathering financial statements will be relatively straightforward. 

We've got a pretty captivating offer to business owners that want to use Xero as their accounting software. A lot of it is automated and the basic pricing reflects that. If you need more than basic services, we also offer value based add-on services.

Please feel free to reach out out of the blue or refer any bookkeeping/accounting business our way. We look forward to serving you and your business.
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NYS Private Delivery Service Addresses

2/4/2015

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If you are using a private delivery service instead of the U.S. Postal Service to file your tax returns, use the addresses below:

Personal income tax returns or fiduciary returns:

NYS Tax Department
RPC-PIT
W A Harriman Campus
Albany NY 12227-0805

Form IT-204, Partnership Return:

JPMorgan Chase
NYS Processing - IT-204
33 Lewis Road 
Binghamton NY 13905-1040

Form IT-204-LL:

JPMorgan Chase
NYS Processing - IT-204-LL 
33 Lewis Road 
Binghamton NY 13905-1040

See Publication 55, Designated Private Delivery Services, for additional information regarding private delivery services or visit our web site at www.tax.ny.gov
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Marginal inflation adjustments for 2015 IRS tax period.

11/25/2014

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The IRS released Revenue Procedure 2014-61, containing annual inflation adjustments for various tax provisions, including the tax rate schedules, standard deduction, personal exemptions, etc.

Some headline numbers:
  • The tax rate of 39.6 percent affects singles whose income exceeds $413,200 ($464,850 for married taxpayers filing a joint return), up from $406,750 and $457,600, respectively. The other marginal rates - 10, 15, 25, 28, 33 and 35 percent - and the related income tax thresholds are described in the revenue procedure.

  • The standard deduction will increase to $6,300 for singles and married persons filing separate returns and $12,600 for married couples filing jointly, up from $6,200 and $12,400, respectively, for tax year 2014. The standard deduction for heads of household increases to $9,250, up from $9,100.

  • The itemized deduction limitation phase out for tax year 2015 returns of individuals will begin with income of $258,250 or more ($309,900 for married couples filing jointly).

  • The personal exemption for tax year 2015 increases to $4,000, up from the 2014 exemption of $3,950. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $258,250 ($309,900 for married couples filing jointly). It phases out completely at $380,750 ($432,400 for married couples filing jointly.)

  • The Alternative Minimum Tax exemption amount for tax year 2015 is $53,600 ($83,400, for married couples filing jointly). The 2014 exemption amount was $52,800 ($82,100 for married couples filing jointly). This is presently a provision that is expected to be extended but a new law has not passed as of this time.

  • The 2015 maximum Earned Income Credit amount is $6,242 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,143 for tax year 2014.

  • Estates of decedents who die during 2015 have a basic exclusion amount of $5,430,000, up from a total of $5,340,000 for estates of decedents who died in 2014.

  • For 2015, the exclusion from tax on a gift to a spouse who is not a U.S. citizen is $147,000, up from $145,000 for 2014.

  • For 2015, the foreign earned income exclusion breaks the six-figure mark, rising to $100,800, up from $99,200 for 2014.

  • The annual exclusion for gifts remains at $14,000 for 2015.

  • The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) rises to $2,550, up $50 dollars from the amount for 2014.

  • The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is increased from $17,500 to $18,000.

  • The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is increased from $5,500 to $6,000.

  • The limit on annual contributions to an Individual Retirement Arrangement (IRA) remains unchanged at $5,500. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

  • The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $61,000 and $71,000, up from $60,000 and $70,000 in 2014. For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $98,000 to $118,000, up from $96,000 to $116,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple's income is between $183,000 and $193,000, up from $181,000 and $191,000. For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

  • The AGI phase-out range for taxpayers making contributions to a Roth IRA is $183,000 to $193,000 for married couples filing jointly, up from $181,000 to $191,000 in 2014. For singles and heads of household, the income phase-out range is $116,000 to $131,000, up from $114,000 to $129,000. For a married individual filing a separate return, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

  • The AGI limit for the Saver's Credit (also known as the retirement savings contribution credit) for low- and moderate-income workers is $61,000 for married couples filing jointly, up from $60,000 in 2014; $45,750 for heads of household, up from $45,000; and $30,500 for married individuals filing separately and for singles, up from $30,000.

  • Also, the Social Security Administration announced that the 2015 taxable wage base for the Social Security portion of FICA is $118,500, which is a $1,500 increase over the 2014 wage base of $117,000.



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Retirement plans

11/12/2014

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I hate the word 'retirement'. Yes, okay, as one gets older we are less able/effective to do most work but do we have to 'retire'? In some cases, yes, maybe that is the best choice for the health & safety of everyone involved,  but not always, right?

Anyway, most accessible savings plans out there are designed to penalize you if you take out the money before you 'retire'. Depending on the plan that can be as early as 59 1/2 or after 70 years old.  And then, some savings plans force you to take money out after you reach a certain age.

Generally, I have no beef with this concept. It is wise to save and if that means tying yourself to the mast so you don't jump in after the sirens then so be it. It is also interesting that each savings plan has limits on how much you can contribute based on your income. I think this is a governmental, state administration issue. i.e. a way to make the plans have the appearance of fairness. A noble intention but in reality not sure if it does that...who knows, maybe it does.

Anyway, on the tactical level (i.e. you've already considered the bigger picture), if you're thinking about how to defer tax you can look to an IRA if your income is lower and a 401K if you are an employee whose employer participates or a business owner. There are other plans but these are the most available. 

If you're a small business owner that makes too much to contribute to an IRA, you can sign up for a 'retirement' savings plan for your small business. I know there are a bunch of companies that will administer these for you but I've found that Merrill Edge does a decent job.

Once signed up, you contribute a portion of your income into a tax deferred retirement plan just as if you were an employee in a company. As an added benefit, some 'retirement' savings administrators offer a Roth 401K option. This allows you to either defer taxes  while reducing your tax liability in the current year (Traditional 401K) or pay taxes this year while eliminating taxes when you take the money out at ‘retirement’ (Roth 401K).

Talk with your financial advisor, accountant, lawyer, spouse, etc. about things financial. Good luck.
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Quick Thoughts On Entrepreneurship

7/31/2014

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An Entrepreneur undertakes the task to create what they 'see' that others may not. 
They take risks to figure out new ways to solve old problems. 
They seem to embody the maxim by St. Paul, "Operate as if you are a lord, subject to no one, whilst being a servant to all". 
Some win and some lose. 
Some lose only to be vindicated. 
Some win only to be vanquished. 
It would seem that all efforts in this world mean something somewhere.
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Circular 230 Email Disclaimers Now A Thing Of The Past

7/16/2014

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Ya know the annoying and opaque email signatures that you get from us and other accountants regarding Circular 230? Well, according to the IRS they are now a thing of the past. On June 9th, 2014 the IRS eliminated the need to post the boilerplate as they recognized that it was ignored most of the time and offered no protections anyway.

The need for being circumspect in giving advice doesn't go away, of course. The standard is now defined, "base all written advice on reasonable factual and legal assumptions, exercise reasonable reliance, and consider all relevant facts that the practitioner knows or reasonably should know. A practitioner must also use reasonable efforts to identify and ascertain the facts relevant to written advice on a Federal tax matter." 

Only now we're not required to state it at the bottom of every email.
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Common Places IRS Looks for Irregularities

6/16/2014

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The IRS. So many places to go on those 3 letters. Amongst other things they have the fun job of collecting money from U.S. Taxpayers in our "voluntary" tax system. Actually, it is more like an "honor" system than a voluntary system but I digress.

Sometimes, the IRS gets overzealous (imagine that). And when they do, it has been communicated to me by an anonymous source that these are the areas they scrutinize:
  • Revenue recognition (proper methods being followed)
  • Valuation of assets
  • Capitalized vs. Noncapitalized Expenses
  • Reserves
  • Accounting for acquisitions
  • Other performance benchmarks that don't follow GAAP (Generally Accepted Accounting Principles).

These areas are traditionally complex to compute and to communicate. The stakes for reporting these correctly can often be quite high because tax liability can swing greatly in one direction or the other depending on how the rules and requirements have been interpreted.
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Shiny Things

6/12/2014

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I'm human, I admit it.

I am a total sucker for new and exciting things. Whether it is a new gadget or a new app or new tool I am usually smitten.

I have been thinking about the 'why' of this. Why is it so important to have shiny new gadgets and tools? And truthfully, I'm not sure that it is. I mean, we spend a lot of time testing these new tools and we don't always implement them. And even the cool tools that we do implement, then there is a learning curve and training. 

However, because of computerized accounting systems there is the potential to account for a business pretty accurately and in less time if we have these tools in place. So, then the question is, is it a race? To finish the data driven work faster to focus on more analysis and relationship building?

Well, ideally, this is true but practically, it takes awhile to get to this point. Even though what we do for accounting systems is less like building a house from scratch and more like putting together a room of Ikea furniture, we still need to trust that Ikea made the right sized parts to fit it all together. And even when most of the times, the connected systems work beautifully, in some cases, even the best can fail at the worst possible moments.

So, am I going to give up on the new and shiny? And the hope for seamlessly integrated solutions?...Not likely. But am I going to challenge myself and our small, passionate team to get the most out of the fancy tools we already have?...Yes...and we'll see how that goes.
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Banking system

5/20/2014

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I heard rumblings on twitter and elsewhere about the financial world view discussion in Las Vegas last week at the #SALT conference, at which, Nassim Taleb and Larry Summers spoke (debated?) about the challenges we face in the financial system.

The two world views seem to be that Larry Summers thinks as long as we have enough capital to support the liquidity of our banking system, the U.S. economy...and the world, in general, can keep on keeping on. i.e. once the capital problem is solved, then there is nothing holding us back to keep innovating, working, trading, etc.

Taleb is not as impressed. He thinks the capital injected into the system was immoral (theft, effectively) and that there has been no fundamental change in the system to prevent the transfer of capital from the Treasury (taxpayer funds) to the Banks (liquidity providers for the financial system) in the future. He made his point by saying that if the U.S. raised interest rates, we'd quickly see our 'liquidity' dissolve...and then the Treasury (U.S. citizens tax payments) would be forced to 'bail out' the banks once again.

So, the real question is: How do we solve this dilemma?

The answer Taleb proposes is to embed 'punishment' into the banking system itself. And by punishment, I interpret it as 2 things:
  1. Limiting the scope of what a bank can participate in. i.e. making banking super well defined to liquidity provision...debt provider...NOT...an investor or speculator in the equivalent of equity. 
  2. In addition to the limitations and practical regulations imposed on banks, there would be executive compensation limits. i.e. no executive would get a 'performance' bonus as there is currently no provision for the executive who took the risks that earned the performance to be negatively impacted if the risk resulted in a bust. 

Because banking inherently deals in risk, by limiting the scope of the risk the bank can participate in and by regulating the compensation of the banking operators, there would be less incentive for the bankers to take outlandish risks. And if banks did fail, it would be easier to contain.

There probably needs to be some more fleshing out of what this would look like in the real world, i.e. how can govt. effectively adjust the current system so that banking can do its job but also practically implement and enforce any regulations that would lead to a more stable banking system.

The concept is relatively simple, but because of the size of the current system, the execution of a solution would involve multiple levels of legislation, regulation and enforcement...in addition to being clearly defined.
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Entrepreneurs - Individual & Societal

5/13/2014

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This article offers some commentary to the 'other side of the entry' as is relates to startups. Many fail. It is bad for the entrepreneur but society actually benefits.

 http://www.newyorker.com/talk/financial/2014/05/19/140519ta_talk_surowiecki

Others, like Nassim Taleb, in the book Antifragile suggest having a national holiday for all the failed entrepreneurs and likens them to heros.
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TIPS for Entrepreneurs

5/8/2014

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http://www.entrepreneur.com/article/233664#
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Cashflow Forecasting

2/17/2014

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The idea of cashflow forecasting is so attractive, isn't it? Who wouldn't want to look into the future and know where to deploy cash and where not to. Outside of a crystal ball, cashflow forecasting is the best tool we have for predicting when cash will come in and when cash will go out...and for what purpose.

Yes, cashflow forecasting IS important, but how is it done?  Most retail accounting packages don't have a defined 'report' for forecasting cashflow. In fact, I've been using Quickbooks for over 10 years and Xero for over 2 years and neither has a really good view of cashflow, per se.

So, how is it done?

Well, before
I go into it, how it is done will depend on the frequency you want to use a cashflow forecasting tool, what degree of accuracy you can live with and who you'll be reviewing it with.
Since we're mostly using Xero to service our clients, I've only found one tool (as of this date) that syncs well with our actual accounting data and that is Floatapp.com. But rather than sing their praises or even beat them up, I'd rather describe our process and let you know what has worked, what hasn't and how we make it work for us and our clients.

First of all, we connect the Xero data to the app.  We refresh the data on a schedule (so we're always dealing with fresh actuals) then once we've got all the data into Float, we export the Float template into a Gsheet as a template.

Why move everything to GSheet?  Well, frankly,
the short answer is that manipulating numbers in Float isn't there yet. It is still slow and SAASy.  And since we experiment with new forecasted numbers for the coming month, manipulating the numbers is faster in GSheet.

Once we've got what we want in GSheet,
we manually update Float to be what we think will happen in the next month. Not a perfect seamless process but it works for now until the SAAS tools improve.

Overall, the advantage of apps like Float is that they sync actual accounting data information directly into the cashflow forecast tool.  This way we can always have an accurate look at when the receivables and payables on the books are expected to be due.

How do you forecast your cashflow?

Float Promo Vimeo from Edinburgh Film Company on Vimeo.

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IRS Launches 'Get Transcript'

1/16/2014

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Now, when you go here http://www.irs.gov/Individuals/Get-Transcript you can get 3 years of past tax data in a download. Apparently, it is still buggy, but the site should be helpful for some. 

Read more here: http://techcrunch.com/2014/01/16/you-can-now-download-your-tax-returns-from-the-irs/
and  here: http://e-pluribusunum.com/2014/01/16/irs-enables-americans-to-download-their-tax-transcripts-over-the-internet/
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4Q13 Estimated Tax Payments

1/15/2014

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Fed & State 4Q13 Estimated Tax Vouchers & Payments Due Today
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New OFFICE/Internship Opportunity

1/9/2014

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New office Location

Hi, hope you had a nice holiday and are getting back in the swing of things in this 2014 year.  Over the holiday, we moved our tax operations into a new office at 40 Wall Street, Suite 2871.  We are thrilled to be here and look forward to welcoming you here if you'd like to drop by.  The picture below is a hands free, 360 degree image of our new digs by Cycloramic. 
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Accounting Internship

We are seeking a motivated, reliable individual who is excited about helping clients and learning accounting and tax preparation in the cloud. This starts as an unpaid internship engagement but moves to paid for the right person after 3 months.

The applicant should be able to do the following:
  • Communicate well both verbally and in writing.
  • Know his/her way around Google Apps, CRMs, Project Management, Xero & other SAAS and software that TTO uses.
  • Deliver quality results in a timely manner.
  • Think strategically about prioritizing what needs to be done without letting things fall through the cracks.
  • Take a proactive approach to their work and the processes we use. 
  • Innovate and take initiative to do what he/she thinks is best for a given situation.
  • Develop themselves & their skill-set outside of the scope of work.
  • Build good relationships with his/her colleagues, clients and other third parties.
  • Be ethically conscious, both inside and outside the workplace.
For interested applicants, kindly submit your resume to info@tunstallorg.com.



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NYS MCTMT

1/8/2014

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Hi, passing along a reminder from New York State:

We're reminding employers that the next MCTMT (Metropolitan Commuter Transportation Mobility Tax) return (Form MTA-305) is due January 31, 2014.

Make sure that you're still required to pay MCTMT.
  • The threshold for filing MCTMT returns changed as of April, 2012.
  • Employers whose payroll expense for a quarter is $312,500 or less do not have to pay MCTMT.
  • There are no "zero returns" for MCTMT. If your payroll expense is under the threshold amount, you do not have to file MCTMT returns.
Check our MCTMT web pages to see if this filing deadline applies to you.
http://www.tax.ny.gov/bus/mctmt/default.htm

Questions? Call 518-485-2392

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Estimated Taxes

12/10/2013

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We've been noticing that the IRS, NYS and NYC have been a little more vigilant in pursuing penalties & interest on late payments, filings and the like. Please see below for NYS guidance on paying estimated taxes:

"Penalty for underpaying your estimated tax

We may charge you a penalty on the amount of estimated income tax that you didn't pay or paid late during the year (either through estimated tax payments, withholding tax, or a combination of the two). The penalty you will have to pay will equal the federal short-term interest rate plus five and one half percentage points (adjusted quarterly), but not less than 7.5%.

The underpayment penalty applies if your 2012 withholding and estimated income tax payments do not equal:

  • 90% of the income tax shown on your 2012 return
  • 100% of the income tax shown on your 2011 tax return if your NYS AGI is $150,000 or less
  • 100% of the income tax shown on your 2011 return if married filing separately for 2012 and your NYS AGI is $75,000 or less
  • 110% of the income tax shown on your 2011 return if your NYS AGI is more than $150,000, or
  • 110% of the income tax shown on your 2011 return if married filing separately for 2012 and your NYS AGI is more than $75,000
Note: Special rules apply to farmers and fishermen. See Form IT-2105.9-I. Instructions for Form IT-2105.9, Underpayment of Estimated Tax by Individuals and Fiduciaries.

If you determine that you underpaid or paid your estimated tax late, you must calculate the amount of your penalty using Form IT-2105.9, Underpayment of Estimated Income Tax by Individuals and Fiduciaries. Attach Form IT-2105.9 to your return."
http://www.tax.ny.gov/pit/estimated_tax/estimated_tax_payment_due_dates.htm

http://www.tax.ny.gov/bus/ct/ct222.htm

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What is a Startup?

12/4/2013

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I came across this on Quora and think this is a helpful answer to the question: http://www.quora.com/Entrepreneurship/What-is-the-proper-definition-of-a-startup/answer/Bryan-Guido-Hassin
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Xero Review: Executive Summary Report

11/29/2013

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The Tunstall Organization, Inc. 
615 S. College ST. 9th Fl
Charlotte, NC  28202

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