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It depends. SEO is used by companies that want to get prospects through their website and convert them into new clients. If you have a full practice and don’t want new clients, SEO is not necessary!

However, if you are looking to build your practice, SEO is a great resource that will only become more and more relevant in the future.

Definition: SEO is a way to optimize your website’s performance on search engine rankings like Google, Yahoo! and MSN. There is a lot of intensive programming that goes in to it, but SEO companies take care of that for you and its all “back-end,” meaning that the appearance and content of your website will be unaffected. They will build links that go to your website, submit your site to all the major search engines, submit your site to directories and use many other strategies to gradually bring up your ranking.

Google and the other search engines have algorithms that decide which sites should be ranked at the top for certain keywords. They send out robots (or “spiders”) to crawl all the sites on the World Wide Web to gather information. Your website is usually crawled once every few months. Thus an SEO campaign takes at least a few months to be effective and sometimes 6 months to a year to get your website up to the top of the rankings. Because of this, most SEO providers have a minimum of a 3-6 month contract.

The pricing usually starts around $200/month and goes up from there. Pricing depends on your competition and location. If you are in New York City, it will be much harder to get ranked high for a search like “CPA New York” compared to a local market with less competition like “CPA Tucson.” This is because SEO is becoming increasingly popular and in large metro areas like NYC, there are going to be many other competing firms who are also using SEO.

Your SEO provider will give you performance reports that will allow you to see who is coming to your website, where they went on the site, what search engines are crawling your site, and other useful info that allows you to track the success of the SEO campaign.

SEO is not to be confused with adwords or Pay-Per-Click. These are also effective ways to market online, but SEO is for improving your ranking in the organic or “natural” results, not within the sponsored links. Studies have shown that 70% of people click on the organic results, as opposed to the sponsored links. Thus SEO is used as a long-term solution for gaining clients.

Chad Brubaker, CEO, www.emochila.com

IRS: First $2,400 of Unemployment Benefits Tax Free for 2009

IR-2009-29, March 26, 2009

WASHINGTON — All or part of unemployment benefits received in 2009 will be tax free for many unemployed workers, according to the Internal Revenue Service.

“This morning we learned that a record 5.6 million people were receiving unemployment benefits in the middle of March. This underscores the need for the relief provided by the American Recovery and Reinvestment Act, which includes making the first $2,400 of unemployment insurance exempt from tax,” said IRS Commissioner Doug Shulman. “I urge all unemployed workers to take this special tax break into account as they plan their tax withholding and quarterly estimated tax payments for the year. This change offers a helping hand to millions of Americans who are out of work and struggling to make ends meet.”

Under the American Recovery and Reinvestment Act, enacted last month, every person who receives unemployment benefits during 2009 is eligible to exclude the first $2,400 of these benefits when they file their tax return next year. For a married couple, the exclusion applies to each spouse, separately. Thus, if both spouses receive unemployment benefits during 2009, each may exclude from income the first $2,400 of benefits they receive.

The new law doesn’t affect the return taxpayers are filling out now. Unemployment benefits received in 2008 and prior years remain fully taxable.

Unemployed workers can choose to have income tax withheld from their unemployment benefit payments. Withholding on these payments is voluntary. However, choosing this option may help avoid a surprise year-end tax bill or a possible penalty for having paid too little tax during the year. Those who choose this option will have a flat 10 percent tax withheld from their benefits.

Unemployed workers who expect to receive more than $2,400 in benefits this year should consider having tax withheld from their benefit payments in excess of that amount. Those unemployed workers who have already chosen to have tax taken out of their benefits, should consider the $2,400 exclusion in determining whether to continue to have tax withheld.

Use Form W-4V, Voluntary Withholding Request, or the equivalent form provided by the payer to request withholding to begin or end. Form W-4V is also available on IRS.gov or by calling the IRS toll-free at 1-800-TAX-FORM (829-3676)

Many business taxpayers fail to deduct otherwise eligible business expenses or fail to fully deduct qualifying business expenses. Below is a listing of commonly missed deductions or deductions that you may not be fully utilizing. You may wish to carefully examine your records to determine if you may be missing any of these deductions.

*For Sole Proprietors/Filing Schedule C: Home Office Deduction: If you use part of your home as a home office, you may be entitled to deduct expenses related to the home office based on the percentage of square footage the home office occupies. Related expenses include mortgage interest, property taxes, utilities, and repairs, etc. (S Corporation shareholders and Partners in a Partnership usually cannot take this deduction.)
*General Business Expenses: If you use your personal funds for business expenses such as office supplies, these are qualifying business expenses, which you may deduct. You can fill out an expense report and have the business reimburse you. Keep all receipts attached to the expense report for supporting documentation.
*For S Corporation Shareholders: Imputed Interest on Shareholder Loans: If you have loaned money to your business, you are required to charge interest on the loan or interest will be imputed to you. While you are required to report the interest as income on your personal return, your business is permitted a deduction for the interest paid. If any of the interest amount is improperly characterized as wage income to you, your business may be overstating its employment tax liability. By recharacterizing these amounts as interest expense, your business may be able to reduce its employment taxes. (You should also have an official Note set up with terms, etc….)
*Meals and Entertainment Expenses: If you have used your personal funds to pay for meals and entertainment expenses, these expenses qualify as a business deduction, subject to limitations. Once again, fill out an expense report and have the business reimburse you. Keep all receipts attached to the expense report for supporting documentation. Also document the business purposes of the meals and entertainment expenses.
*Personal Assets Converted to Business Use: If you have contributed personal assets, such as a computer, the fair market value of these assets qualify as a business deduction, subject to depreciation limitations, beginning with the date of conversion.
*Self-Employed Health Insurance: As a self-employed taxpayer, you may deduct your health insurance premiums under certain circumstances. (check with your tax professional for further information)
*<Communications Expenses: Expenses related to the business use of your personal telephones, cellular phones, and internet connections may be deducted.
*Automobile Expenses: Mileage and other related automobile expenses may be deducted when your personal vehicle is used for business purposes.

In the American Recovery and Reinvestment Act of 2009 - taxpayers received a tax credit - but it is not going to be in the form of a separate, special check mailed to them - like last years economic stimulus payment. This tax credit will be incorporated into their payroll checks. The credit will be in the $400 - $800 range per taxpayer.

For the majority of folks, this tax credit will mostly be handled through payroll tax withholdings. The IRS has revised the federal tax withholding tables to incorporate new lower tax rates. So - if you receive a regular weekly/biweekly/monthly paycheck - you will notice that your check contains a little something extra each pay period. For other folks, the credit can be claimed when they file their 2009 tax returns next year.

For more information about the “Making Work Pay” tax credit, see the newly revised IRS Publication 15 (Circular E) Employers Tax Guide.

When working in Quickbooks, have you ever seen “negative A/R” on the balance sheet? And what could this mean?
Where can you find some information to help explain this balance? The first thing you should do when you see negative A/R is run an Open Invoices Report to investigate this odd balance. To run this report, go to: Reports–>Customers & Receivables–>and Select the Open Invoices report. Select the appropriate date range and run it. This report will show you the problem areas. These issues show up in red negative amounts.

What does this balance mean? How can I correct it?
1. Payments were “received” and posted to a customers account - but not against any particular invoice - and they show up as “unapplied payments”. To Correct: First find out if the customer has overpaid you or not. If you have not been overpaid - then you must figure out if you failed to create an Invoice and then create the invoice -using a date prior to the date of the payment. Then apply this credit against the invoice.
2. Payments were “received” and posted to a customers account - and there are no invoices created for this customer to receive against. (See correction for item # 1 above)3. An invoice was create for a customer and a payment was received - but these two transactions were not linked up. On the Open invoices report, you will see an invoice amount and a payment receipt - with a “Net balance of 0″. However, since these two transactions were not cleared against each other, this will create a “negative amount” in A/R. To Correct: Apply the open invoice against the payment.

Note: If payments are being posted to a customers account as unapplied cash or “overpayments” - the revenue from that transaction is Not being recognized on the income statement. The creation of an invoice is the trigger for generating revenue on the Profit & Loss.

If you are the accountant that is working off of the Accountants Copy - you will not be able to correct this for the client in some older versions of QuickBooks. I would recommend recognizing that negative A/R as revenue on the tax return and having the client fix these issues in QuickBooks.

If you want to stay on top of your finances, but do not want to hire a full time controller - why not consider a “Virtual Contoller”?

A Virtual Controller can provide management valuable financial advice and customized financial reports that provide real value to their businesses decision making.

Here are some of the ways that a Virtual Controller can assist your business:

1. Guide you through the start up process and assist in getting your accounting system set up correctly in QuickBooks.
2. Train your bookkeeper or other assistant in the proper accounting procedures for your particular business.
3. Work with your bookkeeper on a monthly basis to ensure that transactions are recorded correcly and records are kept up to date. Is also available to assist the bookkeeper if problems should arise.
4. Offer guidance in the budget planning process and provides budget-to-actual analysis on a monthly or quarterly basis.
5. Discuss project or department profitability on a monthly or quarterly basis.
6. Prepare fixed asset depreciation schedules on all equipment and keep the list current with new purchases.
7. Schedules a monthly teleconference with management to discuss results of operation as well as other business decision making issues that may arise during the month.

If you would like to learn more about Virtual Controller Services, contact Lisa Khayyat, CPA:
info@LisaKhayyatcpa.com

A shareholder of an S Corporation is considered an employee of the corporation. As an owner/employee, the shareholder must take a “reasonable” salary and must pay payroll taxes on that salary. The IRS does not defiine “reasonable” and this can be interpreted in different ways. The best thing to do would be to keep track of your time and pay yourself accordingly. The corporation gets to deduct the salary expense as well as any employers payroll tax expense.

Shareholders can also take out distributions of their equity from the business. Payroll taxes are not paid on the distributions. However, it might not be a good idea to take out more in distributions than you actually pay yourself in a salary.

The number one audit risk for S-Corporations is salary and wages paid to officers of the corporation. If there is no “compensation of officers” reported on the S Corporation tax return, that could very well trigger an audit.

Here is the scenario - It is the end of the year and you have not reconciled any of your bank statements yet. So you have the entire year to reconcile in your QuickBooks Online company file. You begin your reconciliations and everything seems to go fine. Then — you get to the month of September and realize that you have made some mistakes back in the month of May and need to correct them. These could be various mistakes. For example: You deleted reconciled transactions and now your cash balance does not equal the reconciled balance in the reconciliation reports.

But how do you “fix” this problem? — If you go to the Online Help screen- you will not see much there. And if you have ever worked in the Desktop version of QuickBooks you know how easy it is to “Un-do” reconciliations. However, QuickBooks Online is a different animal all together. That same fix will not help you here.

Here is what you can do and it really works! I had to do this a few days ago - so you will not get messed up.

1. Go to the Bank Register and select the account that you are reconciling.
2. You will need to Un-do all reconciled items back to the point where you made the Errors. (Ex: If you are currently working in the September reconciliation screen and need to go back to May you will need to Un-Do: September,August, July, June, and May.
3. In the Bank Register, you will need to replace all “R”s in the Reconciled Status column - denoted by a Check Mark - with “C”’s. This means that you are reclassifying all transactions from Reconciled to Cleared but not reconciled.

Once you have done this - you have completed the “Un-Do” Reconciliation and are now ready to fix your errors and reconcile again. It is that easy!

I was not able to find this simple explanation in the QuickBooks Online Help screen. They make it sound much more complicated than it is and explain the concept in very vague terms.

Q: What skills and equipment will get a CPA up and running in the virtual world?
A: Most - if not all - services that a CPA currently provides can be accomplished on a virtual level without ever leaving the office. Telecommuting has been around for a long time - but it has taken the corporate world a bit longer to accept this type of work arrangement. Smaller firms seem a bit more willing to work with virtual providers.

Basic equipment is needed to operate a virtual business and would include: An updated desktop or laptop computer, high speed internet access, and possibly, a second computer monitor . Good backup and recovery tools are also essential in a virtual environment - don’t overlook this step or you could get burned. Then of course you have to decide what type of online collaboration tools you will utilize to work with your clients.

Q: How does a virtual CPA communicate with clients?
A: First of all - the CPA provider of services - has to establish a clear line of communication with their clients. Emails have to be answered within 24 - 36 hours and phone calls need to be returned just as quickly. Responsiveness is the key to building strong and continuing business relationships. If the provider ignores client email and is unwilling to return phone calls - those clients will go elsewhere.

Q: What are some ways to develop a client base base for your virtual CPA services?
A:Once you purchase your domain name and get your web site built - the rest is about marketing. You should start marketing your services to your current local clients by making a case for the efficiency of working in a virtual environment. Other initial sources for projects include elance.com, guru.com, and monster.com. Then of course, you can do web searches on “Business Resources” to find other places to post your web site information. Creativity is the key to getting web site exposure.