Do you sell merchandise through e-Bay, Amazon or Google checkout? Do you collect payments for goods or services through third party payers such as Paypal or Clickbank? If so, then you should be aware that starting in 2011, the IRS is going to require that these merchants begin reporting all monies paid to sellers on an annual basis on a Form 1099-K. The 1099-K is then filed annually with the IRS.

For casual sellers, this form will probably not be applicable. The 1099-K requirement is for those sellers who earn more than $20,000 and sell more than 200 transactions per year. The reasoning behind this new reporting requirement is an attempt to close the gap on unreported online earnings. This will give the IRS a way to match earnings against tax filings as they do with other tax documents like the W-2 and 1099-misc.

However, keep in mind that if you operate a small business and you collect earnings from online sales - then you are required to report those earning, whether or not you receive a 1099-K.

If you are looking for an online accounting services solution - consider our new web-based accounting and reporting solution. For a nominal fee, we can host your Quickbooks file in our new online accounting system. You will have the access to work in your Quickbooks file as usual with one big difference. We, acting as your accounting firm, will also have access to your Quickbooks file. This will make it much easier for us to oversee your bookkeeping and accounting requirements throughout the year. (Note: A separate fee is required for bookkeeping and financial reporting)

Depending upon the type of services you require, we will be able to make month end/quarter end/year end adjustments to your books, as well as prepare your financial statements. You and your employees can access this system from anywhere. Year end will be a breeze for your firm. Since we have been working with you all throughout the year, the preparation of your tax returns will be much easier and much more painless for you at tax time.

For more information about these services, please contact: Lisa Khayyat Email: info@LisaKhayyatcpa.com

The IRS has instituted new documentation requirements to deter fraud in the reporting of the first time homebuyers credit. Taxpayers claiming the credit must now paper file their tax returns due to these new documentation requirements. They will not be able to e-file their tax returns. Additionally, the IRS has announced that those taxpayers who will be getting refunds will have to wait an extra 2 -3 weeks for processing of the refund. (Refunds normally take 4-8 weeks.)

All taxpayers must include one of the following documents with their 2009 tax return in order to claim the first time homebuyer credit:

1. A copy of their settlement statement or Hud-1. Both parties names and addresses must be completed as well as the sales price and the date of purchase.

2. A copy of the executed retail sales contract for mobile home purchases. The contract must show both parties names and addresses as well as the purchase price and the date of the contract.

3. A copy of the certificate of occupancy for newly built homes, when a settlement statement is not available.

The IRS encourages using direct deposit of your refund in order to speed up the process a bit.

Tax season is officially underway! The IRS will begin to accept e-filed tax returns on Friday, January 15th. Tax preparers across the county will begin electronically transmitting tax returns for individuals as well as businesses on this day.

If you are looking for a low cost way to e-file your 2009 tax returns, why not consider online tax preparation?

You will be able to prepare your tax returns and electronically file them online for a very nominal fee. Check out the “File Your Taxes Online” page.

If you have any questions about this service - contact us.

Microsoft Office Accounting Customers:

Transition your business with Intuit QuickBooks!

QuickBooks has been the leader in small business finance software for more than 25 years and welcomes Office Accounting customers to the Intuit family. Now is your opportunity to change how you manage your business finances and take advantage of several new features in QuickBooks to help grow your business and make key insights to protect the bottom line.

QuickBooks 2010 can transfer your data from Microsoft Office Accounting easily allowing you to leverage the new features and connected services of QuickBooks to meet your unique needs.

If you need assistance in transitioning to Quickbooks, contact me: Info@Lisakhayyatcpa.com.

On November 6th, Congress passed the “Worker, Homeownership, and Business Assistance Act of 2009.”

Some of the provisions of the law primarily affect individuals.

Information for Individuals:

* Making Work Pay Tax Credit. This tax credit means more take-home pay for many Americans. To make sure enough tax is withheld from their pay, taxpayers can use the IRS withholding calculator.

* First-Time Homebuyer Credit Expands. Homebuyers who purchase in 2009 can get a credit of up to $8,000 with no payback requirement. New legislation extends and expands this credit.

* Money Back for New Vehicle Purchases. Taxpayers who buy certain new vehicles in 2009 can deduct the state and local sales taxes they paid or other taxes and fees they paid in states with no sales tax.

* Education benefits. The new American opportunity credit and enhanced benefits for 529 college savings plans help families and students find ways to pay higher education expenses.

* Enhanced Credits for Tax Years 2009, 2010. Find details on the earned income tax credit and the additional child tax credit.

* Increased Transportation Subsidy. Employer-provided benefits for transit and parking are up in 2009.

* Up to $2,400 in Unemployment Benefits Tax Free in 2009. Individuals should check their tax withholding.

* $250 for Social Security Recipients, Veterans and Railroad Retirees. The Economic Recovery Payment will be paid by the Social Security Administration, Department of Veterans Affairs and the Railroad Retirement Board.

* Energy Efficiency and Renewable Energy Incentives.

* Health Coverage Tax Credit. The credit increases from 65 percent to 80 percent of qualified health insurance premiums, and more people are eligible.

Information for Businesses

Some of the provisions of the law primarily affect businesses.

* Making Work Pay Tax Credit. Businesses should use the new withholding rates for their employees. For pension plan administrators, new optional withholding procedures are available to supplement the February withholding tables.

* Work Opportunity tax credit. This newly-expanded credit adds returning veterans and “disconnected youth” to the list of new hires covered by the credit that businesses may claim. Businesses have until Oct. 17 to request certification for the tax credit for some new hires.

* COBRA: Health Insurance Continuation Subsidy. The IRS has extensive guidance for employers, including an updated Form 941, as well as information for qualifying individuals.

* Energy Efficiency and Renewable Energy Incentives.

* Net Operating Loss Carryback. Small businesses can offset losses by getting refunds on taxes paid up to five years ago. Information on the carryback, an expanded section 179 deduction and other business-related provisions, is now available.

* Municipal Bond Programs. There are new ways to finance school construction, energy and other public projects.
(IRS.gov)

Today - the majority of all business owners can be classified as Baby Boomers and are generally over the age of 50. In the next 10 - 15 years we will begin to see that these individuals are ready to begin exiting from their businesses. Those who have adequately prepared themselves, well in advance of this major life event, will come out as winners.

An exit strategy is a written plan for the succession of a business interest. A well thought out and properly crafted exit strategy utilizes the owners personal and business goals to develop the exit plan. All business owners can benefit from an exit plan strategy, prior to a business transition or retirement, regardless of their age or the stage in the life cycle of the company.

To ensure long term and short term goals are met, the exit plan is a powerful business and personal planning tool that should never be overlooked. A carefully thought out and crafted exit plan serves as a road map for business success and wealth preservation. An exit plan asks and answers all the important questions that business owners and their advisors must consider. In the ideal world, business owners would begin developing their exit plans when they start their businesses.

Did you know that your business is an Illiquid asset? And that most of your wealth is tied up in this business?

If you are within 5 - 10 years of retirement, how do you plan on exiting from your business while preserving your wealth & maintaining your lifestyle?

You must ask yourself these (3) Questions:

1. Is my business salable or what can I do to improve the saleability of my business?
If you were to put your business on the market today - would you get an asking price that you could live with? If not, what can you start to do now to improve saleability? Is the business turn-key? Are company policies and procedures documented to provide for a smooth transition for a new owner? These are just some of the questions that you must ask yourself.

2. What is my business worth?
You might have a figure in your head -but this figure is often based on emotional factors. One way to get a good third party opinion is to hire an expert experienced in business valuations.

3. How can I exit from my business and maintain my current lifestyle?
Your business provides for you and your family. It pays your bills, your living expenses, your medical needs and it funds your retirement. If you are contemplating an exit from your business - whether you plan to retire or just transition into another income producing venture - you have to know how much money you will need to maintain your lifestyle.

Article provided by: emochila - Websites for Professionals emochila

Why should your site have a File Exchange Portal?
As an increasing number of tax and accounting professionals begin to develop a web presence, they may be overlooking the inclusion of a simple and valuable web-based tool—secure file exchange. Sometimes referred to as an “online file cabinet,” a file exchange portal is of particular interest in our current time of economic difficulty as it’s an inexpensive technology investment that improves productivity, client service, and saves YOU time and money.

In its simplest terms, a file exchange portal is a quick and efficient method of securely transferring bookkeeping documents, tax returns, and other financial documents from one computer to another.

Often, accountants run into problems transferring client information for 2 main reasons. First, current bookkeeping software files like QuickBooks or Peachtree are notorious for becoming larger and larger with each fiscal year. As such, these files quickly become too large for you to send or receive them through traditional email providers like Yahoo, Hotmail, or AOL. However, file exchange portals are specifically designed to transfer very large file sizes with ease.

Second, in the event that these bookkeeping files are small enough to send via email, many clients are reluctant to do so because of the lack of security. File exchange portals require users to log on to an encrypted third-party server, ensuring a security level comparable to that of online banking (B of A, Chase, etc). Last year, Massachusetts and Nevada were the first states to pass legislation requiring the encryption of sensitive information transfers between accountants and their clients: a move that will, no doubt, be copied by other proactive states.

So, how does this translate into increased productivity and improved client services? For one, a file exchange portal is an important step towards a paperless office. Being able to access documents online saves money on mailing costs, but more importantly, it saves you time. Many tax professionals find themselves hounded for old tax returns, but with online storage, old returns can be quickly uploaded and stored on the portal to be retrieved at your clients’ convenience. Also, with a portal capable of large file exchange your clients are no longer inconvenienced by having to copy bookkeeping files to a CD or flash drive to get them to you. They can simply upload them for you to access when you want.

Some web-developers that work within the accounting industry provide a file exchange portal as part of their basic services, while others require them to be purchased as a separate service.

Taking into consideration their ease of use and potential to streamline your existing practice, a file transfer portal is undoubtedly a smart addition to your site.