Virtual Accounting Blog

Time to Renew Your ITIN

An Individual Taxpayer Identification Number (ITIN) is issued by the government to foreign nationals that do not qualify for a social security number (SSN). An ITIN is used for identification purposes to file an income tax return. Many of these ITIN’s will expire on December 31, 2017, as mandated by the Path Act . If you have a social security number this deadline will not affect you. Below is a list of things to be aware of:

* Your ITIN will automatically expire on December 31, 2017, if you have not filed a tax return at least one time in the last three years.

* A new law that generates a “rolling expiration” date for all ITIN’s issued. The main number to look for is in the middle digits. For example; 9xx-XX-xxx. If you have the numbers 70, 71, 72, or 80, your ITIN will expire on December 31, 2017. Last year’s middle numbers were 78 and 79.

* You can renew your ITIN by filling out Form W-7 and having the support documents that are required. It’s important not to wait until the last minute

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Equifax Security Breach

It’s pretty tough when it’s a small business that has a security breach but when one of the 3 major credit reporting agencies has a security breach, it is a major problem. Especially for the more than 143 million Americans recently affected by the Equifax breach. That's nearly half of the entire country that was exposed in the security breach at Equifax. The personal information lost includes; Names, addresses, Social Security numbers, birthdates, and driver license numbers.

It’s crucial to stay proactive in securing your information to ensure it isn’t misused by hackers. If you are one of the hacked, keeping track of all your credit cards and other accounts will be vital in finding a breach sooner rather than later. Here’s some tips to help you stay proactive.

* Statements. Be sure to carefully review all of your bank, credit card, and investment statements, etc. Hackers sometimes start with a small charge or withdrawal that you may not even notice at first, thinking maybe it was a purchase or withdrawal that you have forgotten about. Also, don’t forget to review cards that you may not use often for charges you didn’t make.

* Review credit reports. Look for suspicious items on your reports. Were there any new accounts opened in your name? Check all 3 credit reporting agencies: Equifax, Experian and TransUnion. You can get a free annual report from each agency by visiting www.annualcreditreport.com. It may be a good idea to stagger these reports, perhaps one from each of the agencies every 4 months. Be aware that there will be a small fee for frequent checks.

* Check the Equifax website. Go to www.equifaxsecurity2017.com and enter your last name and last 6 digits of

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Take Control of Your Financial Clutter

Have you ever looked for a bill or a receipt and couldn’t find it anywhere? Then you remember you have a stack of unfiled papers that you stuck in some random place so you could file them later. Sometimes it seems like no matter how hard you try to keep things organized you still find you have a stack of financial clutter laying around somewhere. Fortunately, there are ways to help you organize those piles of important documents. Here are some helpful hints.

A dedicated spot. Set up an area to pay bills, balance your checkbook, etc. It may be helpful if your computer and filing cabinet is close by. Choose a day and time to pay bills and enter any financial records in your computer. Then file those documents when your task is completed.

Organize files. A lot of people scan documents to a computer program to help organize and keep track of business documents and expenses while others prefer having hard copies on hand. The important thing is to have a system that makes it easier for you to maintain and organize your financial documents with little effort.

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Customer Service Tips

If you own a business chances are sooner or later you’re bound to get an irate client.  Your client may be upset about a late or defective product or service or some other customer service issue.  No matter what the client is angry about, you need to know how to handle the situation in the best interest of both parties. Below are a few ideas that may be helpful in calming and resolving the situation.

* Listen to your client. The first thing you need to do is find out exactly what the problem is before you can offer up any sort of solution to the problem. After the customer is given the opportunity to describe the situation and blow off steam, you will be better equipped to resolve the issue. Let the customer know you are on their side and would like to resolve the problem in a satisfactory and timely manner.

* Don’t be defensive or make excuses. The customer wants a resolution to the problem. Repeating one point several times will only irritate the already upset customer.

* Address each point of concern calmly and work through them with the client.

* Miscommunication between you and your client may result in failed expectations. Give your clients a clear cut explanation of the process you will take to resolve the

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Buying Into a Franchise

A successful franchise is generally based upon a recognized brand name and is already proven to be a good business idea. Another big advantage when you buy into a franchise is that you already know a lot of things about the business and you don’t have to start from scratch.

Many of the best known franchises will help you start a business by providing things such as:

* A detailed operation manual.

* Location advice.

* Staff training.

* When you are searching for start-up capital, some franchises will also offer contacts with

 financial institutions.

This sounds like the perfect business set-up, right? Before you buy into a franchise you should cautiously analysis the entire situation and carefully consider all the pros and cons. Before you take the leap you should be aware of some risks you may encounter along the way. For example:

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CPA Firm vs In-House Accountant

It takes a lot of hard work, time and skills to keep a business running smoothly. There are so many tedious tasks that take time away from the important work that needs to be done when you run a small business. Even if you have all the brains and brawn to wear all those different hats, trying to take care of everything yourself could soon become very overwhelming. When you add bookkeeping errors to the mix, it could also become pretty costly to a business. Wouldn’t you rather focus on the important aspects of your business?

If your budget allows, you could hire an in-house accountant or CPA. You could also outsource and have a CPA firm to take care of all your accounting needs. There are a couple of things to consider before you make a decision about which way would be more feasible for your budget.

* An in-house accountant may be more convenient, but is it cost effective? You will need to calculate the cost of wages, benefits, work space, rent, utilities, equipment, and software, as well as other supplies. All of these things will need to be updated from time to time too. If your employee needs time off, do you have another employee that can step up and take care of the books or will you need to make the time to do the job yourself?

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The Consequences of Out Dated Beneficiary Information

When is the last time you updated your beneficiary information? Do you remember who your designated beneficiaries are? No. Well, you are not alone. A lot of people never give beneficiaries another thought once it’s initially taken care of when signing an insurance policy or retirement account. However, divorces, death, and even close family ties change all the time. If you divorce and remarry you may want to change beneficiaries on your accounts. Perhaps, one of your chosen beneficiaries has passed away, or maybe you are just no longer speaking. There are many reasons you should update your information.

Neglecting to update your designated beneficiaries may have some significant, yet unintended consequences. Making the wrong decision or failure to update your information could affect who are to inherit those assets. In certain cases, it may also change the taxes your beneficiaries will pay and the value they'll receive. Here are some important facts about beneficiary designations.

* When you choose a beneficiary for an account, you are naming the person you want to inherit that account.

* Your choice determines who will inherit the assets in the account, regardless of what your will might say. Usually, the assets will bypass probate and go straight to the person or institution you named.

* You may want to designate a secondary or backup beneficiary in case the primary is no longer living.

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Building Your Business Credit

Regardless the length of time you’ve been a business owner, at some point you will need to build your business credit to ensure that you have the funds you need to keep your business running smoothly. If you are a new business you may ask friends and family to invest in your company or draw from your personal funds. Whereas, an established business needs things such as inventory, equipment, and real estate, and are likely to seek help from banks and credit card companies.

These days, unfortunately, financial institutions are more cautious when it comes to extending credit to small businesses. Due to tough markets and faltering revenues, even many well established businesses may find it challenging to obtain loans. For this reason, it’s more important than ever to establish good business credit.

To convince potential lending institutions that your business is a good risk you should be prepared with a well written, detailed business plan. Your plan should include details about your products/services, pricing, basis for cash flow projections, your competitor research, as well as any financial statements. These details will assure lenders that you have addressed any obstacles that could hinder the success of your business.

Establish your business entity before approaching lenders. For example;

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Happy Easter!

Easter falls on Sunday April 16th this year. Last year Easter was on March 27th. Have you ever wondered why the date we celebrate Easter changes every year?

Years ago Easter was celebrated on the 1st Sunday following the 1st full moon after the vernal equinox, or what we all call “spring”. These days we use a more standard method to determine the date. It’s now celebrated after the Paschal full moon. The Paschal full moon is a bit different from the date of the actual first full moon and it varies as much as two days between the dates of March 21st to April 18th. Since Easter is always celebrated on Sunday and can fall between the dates of March 22 and April 25th.

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One of the Top Accounting Blogs on the Internet Superhighway

We got a nice email from Feedspot re: a recent post they published that highlights the top accounting blogs, and we're happy to have made the cut.

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