COMPUTERIZED BOOKKEEPING TIPS
Most businesses have recurring accounting transactions, such as customers that are billed the same each month, or utility bills, such as rent, that are the same every month. You can save time on entering these accounting transactions each month by setting up recurring transactions. Peachtree and QuickBooks can handle recurring transactions, however they are set up in different ways.
Setting up recurring transactions in PeachtreePeachtree can recur only these types of transactions: sales invoice, purchases, payments and journal entries. Peachtree will remember the transaction from year to year, so it only requires a one-time set-up. (NOTE: the year-to-year option is only available with version 2007; call us if you are interested in upgrading)
To begin, enter a new transaction or open an existing one, then select the RECUR button on the top of that window. Complete the information in the dialog box:
How often do you want to recur this transaction? The default is monthly, but you can choose from drop down list.
Date range: Enter the dates according to your situation.
End on: When you select this option, you have to supply the specific date you want to end on.
End after: When you select this option, you enter the number of occurrences to recur the transaction.
No end date: When you select this option, the current transaction will recur within each time period you specified, with no ending date, so the transaction will continue to recur indefinitely.
Reference numbers: This is optional for sales invoices but mandatory for purchases. If you are assigning sales invoice numbers, enter the beginning number for the recurring transaction in the “begin with number” field.
To save the information, select the OK button.
Setting up recurring transactions in QuickBooksQuickBooks refers to recurring transactions as memorized transactions. QuickBooks can memorize any type of transaction.
To begin, enter the transaction as you’d like it memorized, go to the edit menu and click “memorize”.
The Memorize Transaction window will open. Enter a name that will assist you in recognizing the transaction. (i.e. Monthly car loan).
Choose whether you want to be reminded to enter the transaction, have QuickBooks enter the transaction for you, or neither.
Click OK to memorize the transaction.
what is considered proof for deductions?
Invoices are not proof of deductions. Take this case for example:
Lam was self-employed and ran two businesses. On his Schedule C, he deducted numerous expenses. Under audit, he provided invoices to substantiate deductions but not receipts to show payment. Lam prepared some of the vendor invoices himself and, on some prepared by vendors, he crossed out original amounts and put in new ones. He said most of the people he contracted with did not read or write English or considered invoices to be receipts. Some documents had amounts changed because he negotiated better prices, and most were undated. There were no canceled checks or credit card statements.
The IRS won this case. Taxpayers are obligated to keep sufficient books and records to establish items reported on the tax return. The court refused to accept invoices as the equivalent of receipts, since receipts acknowledge that payment actually was made. In addition, many of the taxpayer’s documents were undated. There was no third-party testimony to establish the credibility of the documents, and the court said that it would not accept the taxpayer’s self-serving testimony. For deductions that require strict substantiation and did not qualify for any exceptions, such as meals and vehicle expenses, the taxpayer did not have records that met minimum requirements. [Lam v. Commissioner, T.C. Memo. 2006-265]
Source: The General Ledger, Vol. 24, No. 2
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need to file an extension for your taxes?
If you think you’ll need additional time to gather your tax information for us to prepare your return, please contact our office:
Phone: 610-967-4711 and ask for Diane.
Fax: 610-965-7766 (ATTN: Diane)
Email: diane@dstortz.com
If you are faxing or emailing your extension request, please be sure to include your name (and spouse’s name, if applicable) as it appears on your social security card(s), your current address and current locality. Also list any dependents, including the same information as above, which you will need to file an extension for.
Please be advised, however, that filing an extension does NOT give you extra time to pay any tax due – it’s simply an extension to file your return. If you do not pay your tax due on time, interest and penalties will accrue.
IRA CONTRIBUTIONS DEADLINE
Don’t forget – IRA contributions for 2006 can be made up to and including April 15th. They must be received in our office no later than April 12th in order to be deposited into your brokerage account. If you are opening a new brokerage account, the deadline is April 10th. If you have any questions, please call our office at 610-967-4711.
DO YOU HAVE ANY UNCLAIMED PROPERTY?
Unclaimed property is any financial asset that has been left with a “holder”, such as a bank, insurance company or other business or organization, without activity or contact for a period of about five years.
Some examples of unclaimed property include bank accounts, uncashed payroll checks, accounts payable or receivable checks, credit balances, gift certificates, stocks and bonds, escrow accounts, money orders, travelers checks, utility refunds, safe deposit box contents and insurance proceeds. If you have any of these items remaining on your books unresolved, they must be reported as unclaimed property. Please note that writing these items off as income does not constitute an account being resolved.
Holders must file an unclaimed property report with the Pennsylvania Treasury Department each year, even if they have no property to report. Similar to individual tax returns, unclaimed property reports are filed for the previous calendar year and are due no later than April 15th.
The Treasury Department has the ability to assess penalties and interest to any holder who does not file a report by April 15, 2007. For this reporting deadline only, Treasury will offer amnesty from penalties and interest to any company filing an unclaimed property report, for the first time, by April 15, 2007. If you have never filed an unclaimed property report, this is your opportunity to come into compliance. However, this waiver will apply only to companies filing a report directly with the Treasury Department and not through a third party reporting agent.
Since many businesses and organizations are not familiar with Pennsylvania’s Unclaimed Property Act, a copy is available on the Treasury Department’s Web site at www.patreasury.org. The website also provides reporting instructions, forms and a free link to HRS Pro reporting software.
Source: Commonwealth of Pennsylvania, Treasury Department
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