Stortz and Associates
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May 2008 Newsletter

office hours

Emmaus:

  • Monday: 9am – 5pm
  • Tuesday – Thursday: 8am – 5pm
  • Friday: 8am – Noon

Bethlehem:

  • Monday: Closed
  • Tuesday: 8am – 5pm
  • Wednesday – Thursday: Closed
  • Friday: 8am -12pm

Both offices closed daily for lunch from 12pm – 1pm

 

NEW POSTAGE RATE

On May 12, 2008 the United States Postal Service will increase the price for a First-Class Mail stamp from 41¢ to 42¢.  Log onto www.usps.com for complete guidelines and regulations.

 

long-term care insurance can protect assets

Long-term care refers to help with what insurers call the “activities of daily living” – bathing, dressing, eating and moving – associated with injuries, strokes and mental deterioration like Alzheimer’s disease.  Many people wonder if long-term care insurance is something that they’ll need – statistically, the answer is yes.  The U.S. Department of Health and Human Services estimates at least 60 percent of people over age 65 will require some long-term care services at some point in their lives.

Long-term care, particularly if required for months or years, can be very expensive.  Home care services currently range from $10,000 to $50,000 per year.  Nursing home care averages an annual cost of $75,000.  Most health insurance policies and Medicare do not cover this type of care.

According to the American Association for Homes and Services for the Aging, the average annual long-term care premium for people under the age of 65 is $1,337 – but that number more than doubles to $2,862 once you’re over age 65.

There are many factors to consider when determining which type of long-term care insurance is right for you – does it cover in-home care?  nursing home care?  how much does the policy pay you?  how long is the waiting period before benefits kick in?  Luckily, you don’t have to sort through those answers alone – let our team assist you in making the right long-term care insurance choices for your family’s needs.  To learn more, please call Kelley Young at 610-967-4711.

Source:  “Eastern Pennsylvania Business Journal”, February 18, 2008

 

macungie relay for life

Head out to Macungie Memorial Park on Friday evening, May 2nd & Saturday May 3rd, 2008 to support the 2008 Macungie Relay for Life!  This 24-hour walk-a-thon supports the American Cancer Society and once again, the team at Stortz & Associates will be there!  Stop by our booth, say hello and help support this important cause!

If you’d like to make a contribution to the American Cancer Society, please click HERE to make an online donation.

 

PRINTING FINANCIAL STATEMENTS

Financial statements are useful in many ways.  One of your most useful statements is a Profit & Loss Statement or Income Statement. You can use this statement to review and analyze the progress of your business.  You can create statements that compare the current year’s income and expenses to those of the previous year to help indicate how your management decisions are effecting your profits.

Both Peachtree and Quickbooks have efficient tools to help create and review a solid financial statement.

To print your reports from Peachtree:

  • Go to Reports and select Financial Statements
  • Double click on Income Statement
  • The next screen that will pop up will allow you to select the time period that you wish to review the statement for.  (For example, the current period, the current 3 periods, etc.)
  • Select OK
  • The report will show your income and expenses for that time period.  It will additionally show a second column with year-to-date amounts. 

To print your reports from Quickbooks: 

  • Go to Reports and Company and Financial, and select Profit & Loss Standard
  • Click on the Modify Report button to change the time period that you want to review.  (For example, the current month, the current quarter, etc.)
  • The report will show your income and expenses for the time period that you have selected.

Additionally, if you would like to compare current amounts to the previous year, click on the Modify Report button again, and at the bottom select Previous Year.

MAINTAINING PAYROLL RECORDS

Before you put 2007 behind you, it’s a good time to think about cleaning up your payroll files.  Which records can you destroy?  What do you have to keep?

Keep all records of employment taxes for at least seven years.  Records should include:

  • Your employer identification number.
  • Amounts and dates of all wage, annuity, and pension payments.
  • Amount of tips reported.
  • The fair market value of in-kind wages paid.
  • Names, addresses, social security numbers, and occupations of employees and recipients.
  • Any employee copies of Form W-2 that were returned to you as undeliverable.
  • Dates of employment.
  • Periods for which employees and recipients were paid while absent due to sickness or injury and the amount and weekly rate of payments you or third-party payers made to them.
  • Copies of employees’ and recipients’ income tax withholding allowance certificates (Forms W-4, W-4P, W-4S, and W-4V).
  • Dates and amounts of tax deposits you made.
  • Copies of returns filed.
  • Records of allocated tips.
  • Records of fringe benefits provided, including substantiation.

It is important for you to keep documentation to support each deduction from an employee’s wages.  Deductions from employees’ wages are later remitted to designated recipients such as taxing authorities, insurance companies, retirement plans, child support, and others.

Backups of either manual or computerized payroll systems should be made routinely, checked for accuracy, and should be stored in a safe place for at least 4 years.

Source:  IRS Pub. 15 (2008)

PA DEPT. OF REVENUE CONTINUES TO EDUCATE BUSINESSES ABOUT USE TAX

Use Tax, a partner to Sales Tax, is applied to purchases made where the seller does not have to pay Pennsylvania tax.  After four years of educating businesses and consumers about the state’s use tax regulations, the Pennsylvania Department of Revenue (DOR) reports that the response continues to grow.  According to the DOR’s press secretary, they’ve collected $31.5 million since 2006 and added 16,000 new taxpayers to the tax rolls.  After kicking off the Use Tax Compliance Program in August 2005, state officials also began encouraging business to conduct use tax self-audits.  The next phase in the program is to perform targeted audits on the businesses who didn’t respond to these measures.

The DOR categorizes businesses into four groups and estimates how much use tax a business in that category would generate in a year.  A business with sales and wages of:

  • Less than $1 million should generate about $2,100 in use tax;
  • Between $1 million and $2.5 million would have an annual use tax of $6,500;
  • Between $2.5 million and $10 million should have a use tax of $13,000, and;
  • Greater than $10 million would have an estimated use tax total of $85,000.

According to the department’s Use Tax Voluntary Compliance Program Questions and Answers sheet, if use tax is not paid before the designated due date, then “the penalty is 5 percent of the unpaid tax for each month or fraction of a month from the original filing date of the return.  The maximum penalty is 25 percent of the unpaid tax and the minimum penalty is $2.  Interest is calculated on a daily basis using an annual interest rate, which varies by calendar year.”  The DOR recommends that businesses which have Pennsylvania Sales Tax License should report and pay the use tax when they submit their sales tax returns.

We can help you with your self-audit notice, calculate your use tax, and help you organize your bookkeeping system to track future use tax.  Call our office today!

Source:  “Eastern Pennsylvania Business Journal”, Vol. 19, No. 14:  April 7, 2008