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Learning To Live With (and Appreciate) Employee Vacations

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Robert J. Gonzalez, CPA, PC - Employee VacationsWhen it comes to employee benefits, paid vacation time is a favorite. Although not legally required in the U.S. (as it is in most other developed countries), most employers — about 77% of businesses in the private sector — provide their employees with paid vacation time.1

What’s in It for You?

But what is the business impact of letting your employees go on vacation? Isn’t it bad, especially for small businesses, when key employees are gone for a week or longer? Actually, it isn’t. While it may be disruptive in the short term, providing paid vacation time can benefit employers. A survey of human resources professionals, a large majority ranked taking vacation as very or extremely important for employee performance (94%), morale (92%), wellness (92%), productivity (90%), a positive culture (90%), and employee retention (88%).2

Survival Strategies

Vacations may be a win-win, but you still need to minimize disruption and maintain productivity when employees are away. Here are a few tips:

  • If you don’t already have one, formalize a vacation policy that spells out how to request vacation time, how many employees may be gone at the same time, how disputes will be handled, etc.
  • Create a master calendar and record all approved time off.
  • Cross-train employees; try to have at least two people trained to cover each job.
  • Have employees update their job descriptions and provide access to any passwords or other information that may be needed during their absence.
  • Prior to leaving, make sure employees compose “away” messages for voicemail and e-mail and let key customers and contacts know how long they will be gone.

Benefits Are the Bottom Line

A comprehensive, competitive benefits package is the best way to attract and retain employees. Top prospects want health insurance, voluntary benefits, and a retirement plan in addition to vacation time. How do your benefits stack up? Your financial professional knows the marketplace and can provide guidance to help you make your benefits package more competitive.

Give us a call at 214-475-1708 to discuss a package of accounting services for your business. We offer a free initial consultation.

Source/Disclaimer:

1No-Vacation Nation Revisited, Center for Economic and Policy Research, May 2013.

2Vacation’s Impact on the Workplace, SHRM/U.S. Travel Association, November 12, 2013.

Time for a Tax Checkup

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Robert J. Gonzalez, CPA, PC - Tax CheckupMidyear is a good time to review your tax situation. You can make sure your estimated tax payments are on track and look ahead to see if there are any tax-saving opportunities you can take advantage of before year-end.1

The Need to Estimate

The IRS requires individual taxpayers to make four quarterly installment payments of estimated tax (based on the amount of the “required annual payment”) to satisfy their tax liability for the year. Individuals also have the option of paying their income taxes throughout the year through payroll withholding.

To avoid penalties, payments must equal the lower of (1) 90% of the tax liability for the current year or (2) 100% (110%, for higher income individuals) of the tax liability on the prior year’s return. No penalty will apply if the tax shown on the return (after withholding) is less than $1,000.

Paying the Right Amount

Though you don’t want to underpay, you might not want to overpay either. A refund may be welcome, but it’s essentially an interest-free loan to the government.

If you need to change the amount being withheld from your paychecks, contact your payroll department and ask for IRS Form W-4 so you can make the appropriate adjustments. If you have additional nonwage income, you may need to increase your withholding or make estimated payments to avoid an underpayment penalty. If you are self-employed, you probably need to make estimated tax payments.

Save Taxes, Save for Retirement

Do you (or your spouse) have a retirement savings plan at work, such as a 401(k) plan or 403(b) tax-sheltered annuity? You can reduce your 2019 income tax liability by making pretax contributions to the plan. Permitted contribution levels for such plans are typically generous. For 2019, an employee may contribute up to $19,000 ($25,000 for those 50 and older) to either a 401(k) or 403(b) plan, unless a lower plan limit applies.

Capitalize on Lower Rates

You also might be thinking about selling an investment that has performed well. If the investment is held in a regular taxable account, your capital gain would potentially be subject to tax. However, long-term capital gains are taxed at lower rates (generally 15% or 20%) than your ordinary income.

Give us a call at 214-475-1708 to discuss a package of accounting services for your business. We offer a free initial consultation.

Source/Disclaimer:

1This communication is not intended to be tax advice and should not be treated as such. Each individual’s tax situation is unique. You should contact your tax professional to discuss your personal situation.

Using Product and Service Records in QuickBooks Online

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Robert J. Gonzalez, CPA, PC - QuickBooksLast month, we created product and service records in QuickBooks Online. This month, we’ll explore how they’re used on the site.

If you ever did your accounting manually, you probably remember how tired you got of writing or typing the same things over and over. You may have had your customers’ addresses practically memorized, and your product price list was always close at hand, though you knew that by heart, too.

QuickBooks Online eliminates that duplicate data entry, saving time and reducing errors dramatically. Because of the product and service records you’ve created, completing sales and purchase forms can now be an easy, accurate task. You’ll also have fast access to information about your inventory levels and the profit you make on items. You’ll know what’s selling and what’s not, and when it’s time to reorder.

Here’s how.

Picking Products

Much of your accounting work probably consists of filling out forms. Whenever you create one of these invoices or sales receipts or purchase orders, you already know that you can open a drop-down list and select the name of a customer or vendor. QuickBooks Online lets you enter data about what is being bought or sold in the same way.

To see how this works, open an invoice form and complete and/or verify the fields at the top (customer, date, terms, etc.). Click in the first PRODUCT/SERVICE field, and then click the down arrow to see the list of items and services you sell.

When you create a sales or purchase form, you’ll be able to select the appropriate product or service from the drop-down list – or add a new one.

When you select an item, the description and price will fill in automatically. You’ll have to add the quantity and click in the box below the column labeled Tax (if applicable). QuickBooks Online will calculate the total cost of the product or service on that line. If you need to enter additional sales, proceed to the PRODUCT/SERVICE field in the second line and repeat those actions until you’re done and can save the transaction.

Working with Items

What do you do when you need more information about a specific product than just its description and price? Do you have to return to its individual record?

No. QuickBooks Online includes a great tool that provides real-time updates on your inventory items and lets you work with them. Click the Sales tab in the left vertical menu, and then on the Products and Services tab at the top. The table that opens displays numbers for every item’s quantity on hand and reorder point. Look at the end of each line, and you’ll see a drop-down list labeled Edit that looks like this:

QuickBooks Online’s Products and Services page provides real-time inventory updates, as well as item-management tools.

As you can see, there are a number of actions you can take here on individual products.

Warning: If you think there’s a reason you should Adjust quantity or Adjust starting value, please talk to us first. Your inventory records need to be precise. We can schedule a session to go over this and other concepts you need to understand in order to keep inventory counts accurate.

You can take some of these actions on multiple items simultaneously. Click the down arrow in the Batch actions field above this Edit menu. Click the boxes in front of the products you want to work with and select the desired activity (unavailable ones will be grayed out in the list). Take extra care with this mass modification tool.

Multiple Reports

QuickBooks Online contains templates for numerous inventory-related reports that you can customize.

QuickBooks Online’s Product and Services screen may be all you need in your daily work, but there will be times when you need more analytical assistance. You can turn to the site’s specialized reports for more in-depth scrutiny. Click the Reports tab in the left vertical pane. Make sure the All Reports list is active and select Manage Products and Inventory to see what’s available, including:

  • Inventory Valuation Detail.
  • Sales by Product/Service Detail.
  • Physical Inventory Worksheet.

Reports are easy to run but can be difficult to customize correctly and interpret. If we’re not working with you already on the complex standard financial reports that should be reviewed monthly or quarterly, talk to us. The more you understand about the financial status of your company, the better your decisions will be.

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  • Does your business sell products? If so, are you using QuickBooks Online’s inventory tools to their fullest? Talk to us.
  • Once you’ve created records for products and services in QuickBooks Online, it’ll be much easier and faster to complete sales and purchase forms.
  • Your business can’t make smart purchase and reorder decisions without good reporting tools. QuickBooks Online has them.
  • How quickly could you provide counts for your inventory items? It takes seconds in QuickBooks Online. Ask us how

Are you ready to start using QuickBooks or need QuickBooks support? Call us now at 214-475-1708 or request a free consultation through our website.

Business Start-Up Costs — What’s Deductible?

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smiling women working from deskLaunching a new business takes hard work — and money. Costs for market surveys, travel to line up potential distributors and suppliers, advertising, hiring employees, training, and other expenses incurred before a business is officially launched can add up to a substantial amount.

The tax law places certain limitations on tax deductions for start-up expenses.

  • No deduction is available until the business becomes active.
  • Up to $5,000 of accumulated start-up expenses may be deducted in the tax year in which the active business begins. This $5,000 limit is reduced (but not below zero) by the excess of total start-up costs over $50,000.
  • Any remaining start-up expenses may be deducted ratably over the 180-month period beginning with the month in which the active business begins.

Example: Gina spent $20,000 on start-up costs before her new business began on July 1, 2019. In 2019, she may deduct $5,000 and the portion of the remaining $15,000 allocable to July through December of 2019 ($15,000/180 × 6 = $500), a total of $5,500. The remaining $14,500 may be deducted ratably over the remaining 174 months.

Instead of deducting start-up costs, a business may elect to capitalize them (treat them as an asset on the balance sheet). Deductions for “organization expenses” — such as legal and accounting fees for services related to forming a corporation or partnership — are subject to similar rules.

If you’re an entrepreneur with a sound business concept and you’re ready to fulfill your dream of owning your own business, call Robert J. Gonzalez, CPA, PC at 214-475-1708 today. We offer a free initial consultation to get you started.

Filing Taxes for Businesses: What Are the Options?

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business people working on taxesBusinesses and self-employed taxpayers have many options for filing their taxes. Click through for an introduction to the requirements and the pros and cons of different methods.

Filing taxes doesn’t have to be time-consuming. The IRS wants it to be as easy as possible for taxpayers so that they can pay their taxes on time. For business owners and self-employed individuals, e-filing (otherwise known as electronic filing) makes the task simple and efficient.

e-File Options

The various e-file options are on the IRS site. First, you must know under what business entity you will file. Are you filing as a partnership, LLC, S-corporation or another business entity? Each type calls for its own forms.

The IRS e-file forms can all be filled out online. To make the process easier:

  • Gather all the necessary materials to e-file before you sit down at the computer. This includes your corporate EIN or taxpayer EIN, income statements and other financial information.
  • Make sure you have a secure Internet connection.
  • Create your accounts and security questions, if necessary.
  • Complete the forms.
  • Check them for accuracy.
  • Print a copy for your records.
  • If you feel the forms are complete, submit them online.

You will need to create an e-file account. These accounts are free and secure. The first time you use the IRS site, it will take an additional 10-15 minutes to set up your account. It’s a good idea to create a folder on your computer and for your paper-based records to store all of your e-file document copies and other pertinent information. Many companies only use this information quarterly, and it’s easy to forget it after a while, but having a file makes it simpler to remember account numbers and other identifying information.

It’s Free

There is no cost to file your tax information or Social Security or Medicare payments electronically. If you encounter a website that wants to charge you to complete this information, leave immediately. It’s either a phishing scam or an unnecessary expense!

When you turn to us for tax services, you’ll receive top-notch customer service from our friendly staff of knowledgeable accountants and financial professionals. We’ll happily answer your questions and will always respond to your emails and phone calls promptly. Request a consultation through our website today or give us a call at 214-475-1708 to get started.

Why an Employee Handbook is Necessary

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Two business women shaking hands at office with colleagues in the background.Susie wanders in half an hour late two or three times a week. James checks his personal e-mail and monitors Internet auction prices at work. They’re both good workers — but they’re giving the other employees the wrong message. If you have problems like these, it might be time to create an employee handbook.

Sound too “corporate”? The truth is, even very small businesses can benefit from having an employee handbook. Having things in writing puts your employees on equal footing, gives you rules to enforce, and helps new hires learn the rules quickly.

Mission statement. Start your handbook by painting the big picture: What is your company all about? What are your goals? A mission statement can help your employees feel more like part of the team.

General policies. This is where you spell out your dress code; your hours of operation, pay periods, and holidays; the company policy on telephone and Internet use; and other general information.

Leave. This section covers your policies on sick leave, vacation time, maternity leave, jury duty, personal and funeral leave, and military duty.

Benefits. Here’s where you provide information about any health, disability, or life insurance, or any other benefits you provide.

Discipline. This part can get tricky. Some courts have considered employee handbooks as legally binding contracts. Check with an employment attorney for help and advice.

Find out how your business can get on the path to expansion and higher profits. There’s no obligation, so contact us at 214-475-1708 now to discuss your business or request a consultation through our website.