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Virtual Accounting Blog

5 Myths About Working From Home

A couple months ago, I began a new job that is 100% working from home. All interactions within the company and with external clients occur using video conferencing technology. When considering the job offer, my main concern was I didn’t think I would enjoy working at home. I remembered times during previous jobs when I would work from home and found that I was distracted easily and would get frustrated that my family interrupted me frequently to help them. I’m also a fairly social person and thought I would be lonely. Working from home is now one of the best things about my job and I’m surprised it was a pretty easy transition after working in a traditional office environment for more than 25 years.

There are several factors that are important to make working from home successful. Technology that allows for smooth interactions is a must and you must be comfortable working with it and be flexible when it’s doesn’t work. I’ve had cases where my computer, camera or audio stopped working in the middle of a meeting. You need to quickly figure out how to fix it or move to another option. It’s important that team members respect working from home. At my office, everyone works from home so that’s easy. However, it can be a challenge to be the only person calling into a meeting. Or, having co-workers think you don’t work as hard as they do because they don’t see you in the office. Intentional communication and updates are even more important than in an office where a lot of information is shared around the water cooler.

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We’re Taking a Break Today

Summit CPA will be closed today, Wednesday, April 18th. We are taking a much needed break today after a long and busy tax season.

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Five Tax Myths

Everyone has tax advice but beware, some of it is just bad advice. It’s always better to check with you tax advisor before you get caught up in bad tax tips. Here are 5 tax myths:

* You will have more time to pay your taxes if you get an extension. Of course, this is incorrect. An extension only gives you more time to file your taxes. If you owe money, you must still pay what you owe when you file your extension. If you don’t have all the cash to pay your entire tax bill, don’t ignore it, get on a payment plan through the IRS.

* If you get an extension you will get audited. We all know someone that waits till the last minute to gather their tax information then rush to get their taxes done only to find that they are missing some documents or receipts, etc. Under reporting income may be the cause of an audit. Rather than to rush around and make errors on your tax return. It’s better to get an extension and file them correctly to begin with rather than send a return full of errors.

Have your tax preparer figure out if you owe taxes. If you owe, pay that amount or get with the IRS to set up a payment plan. An extension will only give you extra time to gather all your documents and file correctly.

* Buying real estate will give you tax breaks. Unless you itemize your taxes your mortgage interest and property taxes are not deductible.

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To Incorporate or Not to Incorporate

When you own a business it's up to you to decide if it’s a good idea for you to incorporate your business. One big advantage of incorporating is that it limits your legal liability. Meaning that your responsibility for liabilities and debts that are incurred by a corporation is usually limited to the assets of your business. Though there are some exceptions, your personal assets are not usually at risk. There is a cost to incorporate, in some cases, its tax consequences.

Depending on the type and size of your business, you may not need to incorporate because liability may not be an issue for your business or it can be covered by insurance. There are numerous companies that operate as an unincorporated sole proprietor.

If you make the decision to incorporate your business, you will have to decide what corporate forms to use. Here are your options:

* C corporations. This is the traditional form of corporations. It has the most flexibility in structuring ownership and benefits. It is the form in which most large businesses operate. The main disadvantage is double taxation. The corporation first pays tax on its profits and then these profits are taxed once again when they are paid as dividends to individual shareholders.

* S corporations and LLCs. These are called “pass-through” entities. This is because both of these entities have no taxation at the corporation level. Rather, profits and losses are passed through to the shareholders and reported on their individual income tax returns.

There are some ownership limitations for S corporations.

* There cannot be more that 100 shareholders that are U.S. citizens or U.S. residents according to tax law.

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How to Track Time in QuickBooks- Part 1

Tracking your company services is different than selling a product. When you sell a product, your inventory is reduced and signals time to reorder the product. When you track a service you provide, there is no inventory to count, you are selling the time and skills of your employees. It’s just as important to track your time accurately as it is to track products you have sold.

Fortunately, there is a tool in QuickBooks that will help you to record the hours your employees spend doing work for your customers, allowing you to bill for services rendered. This feature, will also allow you to track employee time for payroll purposes. There are 2 options offered here: time sheets and single-activity records.

Building the Foundation

The QuickBooks’ software was designed to be flexible so it can support small businesses with a wide variety of structures and needs. Before you explore new features, we recommend that you check in with your “Preference” options.

You must first open the Edit menu and select Preferences. In the left vertical pane, click on Time & Expenses, then click on the Company Preferences tab at the top. Here is a look at the top part of the window that opens:

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FTC Mailing Refund Checks

Were you a victim of the Allstar Marketing Group LLC’s “buy-one-get-one-free” products- the Magic Mesh Door or Snuggies? Due to the confusing offers by the company that did not disclose the full cost of these products, you may be due a refund. The FTC (Federal Trade Commission) will be sending out refund checks that total more than $7.2 million, to the victims of these products.

Those customers that bought either of the above products listed the misleading marketing, will receive a refund check averaging $33 each. Were you were a victim of misleading or other fraud, you may file a consumer complaint on the Federal Trade Commission website at FTC.gov.

Also, the IRS is warning the taxpayers of bogus charitable organizations conning people into donations telling them they can receive a tax deduction. In reality, these groups do not

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Estimated Tax Payments

The passage of the Tax Cuts and Jobs Act, your quarterly estimated tax payments may be a bit more complicated. These estimated payments are due on April 17th. The new tax laws may make things a little trickery because of the amount you will own this year in comparison to last year.

If this year’s income is the same or less than 2017, you can use the safe harbor option. Meaning that you can pay the same amounts as you paid last year, or 110 % of last year if you earn $150,000 or more.

Trying to calculating your quarterly estimated taxes in 2018 gets trickier due to tax cuts, The IRS calculator can help with your calculations.Your first installment of 2018 individual estimated tax is due on April 17.

If you can't file your tax return by April 17, file for a six-month extension by

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Communicating with Clients in a Virtual World


If you work in a client-facing industry and still solely use email to communicate with your clients, you might be living in the Mesozoic era, and might be facing a lot of stress and an overloaded Outlook inbox. Working in the virtual world, it can be even more difficult to stay in constant contact with your clients. You may not be in the same time zone and may never meet face-to-face. But there are ways to overcome these obstacles. In the last several years, a plethora of tools have been developed that enable virtual communication with clients, coworkers, and vendors, and allow for a much faster response time. In today’s fast-paced world, that’s important.

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2017 Deductions for Charitable Donations

Are you planning on deducting your charitable donations on your 2017 tax return? If you are you will need to have your receipts and documentation as proof of your contributions.

If you gave gifts by a check or with your credit/debit card, you will need you will need written documentation that includes the organization you donated too, the amount of your contribution and the date of the donation. 

Did you contribute more than $250 donation? If you did, you will need to have the charity that received you donation provide written documentation at the time you made the donation.

What happens if you receive something in return for your donation? If you received something in return for your donation you can only deduct the difference between the amount of your contribution and the value of the benefit you received in return for your contribution.

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A Checklist for Working Remote

Are you considering working remote? Working remote means working from home: all day, every day. People often get wrapped up in the idea of working from home. After all, it sounds pretty glamorous: more time with family, no commute, flexible schedule. But, not everyone is cut out to work from home—and that’s ok. If you think you’re ready to take on a virtual position, here’s a checklist you might want to review and consider before making the change:

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