Finding The Right Accountant

There is a great quote in an article title “Accountant 101: Finding the Right Match” by Tom Harnish.

“Do you want to eat well or sleep well?”

In this economic environment most business want to cut costs (“eat well”) versus investing additional dollars in professional services. However a great certified public accountant will not only allow you to eat and sleep well but will usually be able to deliver savings that exceed the increase in professional fees.

A few examples of how the right CPA can help your business are as follows:

CPA prepared financials enjoy the following benefits from bankers and lenders over client prepared documents. 1) Greater comfort in CPA financials, 2) higher loan approval rates, and 3) typically lower interest rate.

Tax projections for you and your business:

We have always encouraged our clients to have tax projection. Some of the reasons for this are to avoid any last minute surprises at April 15, as well as doing some tax planning before year end, i.e. changing your accounting method, placing assets in service etc. Projections are extremely important this year due to the higher tax rates that will be in place on January 1, 2011.  Is your CPA doing a projection for you and the necessary tax planning? If not they could be costing you big money.

Harnish’s article does mention a few ideas on how to find a good accountant such as referrals from clients, attorneys and bankers. These are great ways to find a good accountant however you also need to check their background with the various state accountancy boards and license divisions. In Michigan you are able to find out the license status and whether there have been any disciplinary actions taken against the CPA or the CPA firm. To check the status of a CPA in Michigan please click the follow Michigan Department of Energy, Labor & Economic Growth link Verify a License.

To read more from Mr. Harnish’s article please click the following link Accountant 101 Finding the Right Match.

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.

Can Your Business Survive In The New Normal?

What have you done to ensure the survivability of your business? Have you made the tough calls like removing underperforming employees that are dragging your business down? Have you cut your costs, paid down debt in order to make your company a more attractive candidate for bank financing should you need it?

The North Bay Business Journal has an excellent article from Jim Anderson titled “Facing reality, getting real”. He stresses that the new normal is a lack of credit from traditional financing sources, increased business competition and labor issues.

I particularly enjoyed his quote “Any smart business person realizes that the number one asset of your company is the people. If you have not figured that out, I am surprised that you are still in business”

Managing labor is important in this economy; underperforming employees provide average customer service at best. You need world class customer service to survive in this market or your client base is going to take their business elsewhere. In fact eliminating poor performers it not enough, a stronger message is sent when they are not replaced, and that the current employees have to step it up to maintain their jobs.

To read the rest of his article click the following link Facing reality, getting real.

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.

Michigan’s Wind Industry

Did you know that the state of Michigan has been the fastest growing wind manufacturing region in the nation over the last two years? You probably were unaware of this good news since it has been lost in the media’s coverage of doom and gloom for the Michigan economy.

The American Wind Energy Association (AWEA) posted a blog titled “Getting the scoop on wind at Michigan supply chain meeting” written by Chris Madison. This article provides a brief summary of the projects that have been announced and the jobs that this industry now supports in Michigan.

To read the rest of article click the following link AWEA Into the Wind Blog.

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.

Obama Care Provisions Effective 2011

Here are some of the major provisions that will affect most taxpayers starting in 2011:

Employers will be required to report the value of your health insurance coverage on your W-2.

What does this mean to you?

Well technically nothing since insurance coverage won’t be subject to an excise tax until 2018. Furthermore the excise tax of 40% would only apply to the employer-sponsored health insurance coverage amount that exceeds $10,200 for individuals and $27,500 for family coverage.

However once politicians start to see how much revenue could be generated from employer sponsored health insurance coverage, they may decide to apply the excise tax sooner rather than later to help pay for the deficit.

Effective January 1, 2011 only doctor prescribed medicines and insulin will be eligible for tax free reimbursement from one of the following plans.

Under current law insulin, prescribed and over the counter medicinal expenses qualify for tax free reimbursement from Flexible Spending Accounts (FSA), Health Reimbursement Accounts (HRA), Health Savings Accounts (HSA) and Archer Medical Savings Accounts (MSA)

If you are enrolled in one of the preceding plans you may want to consider stocking up on over the counter medicines this year.

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.

What To Do If You Receive An IRS Notice

The most important thing is that you do not panic or ignore the notice. Most of these notices are for simple things like mathematical errors or even for items that you missed on your return that now may result in a favorable outcome to you.

The IRS has an excellent list of things you should know about when receiving a notice in IRS Summer Tax Tip 2009-22.

Item 8 from the list is extremely important. In practice there have been numerous times that clients have had to send in the requested items two or even three times due to paperwork being misplaced at the IRS, a different agent being assigned or that the case has been transferred to a different office.

You should also send any response to a notice via certified mail to prove that you have submitted your response by the specified timeline in the notice.

To access the list please click the following link from the IRS’ website. IRS Tax Tip 2009-22

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.

When Cash Is Tight

I recently found an interesting article on Open Forum form Laura Rich titled “Paying Your Small Business Bills”

Her article provided a wide range of ideas between renegotiating trade terms, contacting your vendors, to squeezing your customers for payment.

In practice I have found that it is always better to communicate with your vendors when your business is having cash flow problems before they contact you. They are more willing to work with you if you contact them first. After all they want your business for the long-term.

Contacting them first not only shows that you are interested in a long-term relationship with your vendor, but it also lets them know that you take seriously your responsibility to pay your bills.

To read the rest of her article click the following link Paying Your (Small Business) Bills.

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.

So You’ve Filed Your Return with the IRS, Now What?

Have you ever wondered what your responsibilities are after you have filed a return? IRS tax tip 2010-74 provides a list of items ranging from how to check the status of your refund, to what you should do if you have made a mistake on your return.

To access this tax tip click the following link from the IRS website Here’s What Happens After You File IRS Tax Tip 2010-74.

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.

Generating Business

I recently found an interesting article on Open Forum form Julie Rains titled “11 Free Ways to Generate Referrals”

Her article provides a list of 11 different ways to generate referrals without spending money.

I find item 2 from her list to be extremely important in any service business, since a good portion of our work is dependent upon deadlines imposed by either clients or regulatory agencies. It is always better to under promise and over deliver than to make aggressive commitments that can’t be met thus resulting in a dissatisfied client.

To read the rest of her list click the following link 11 Ways to Generate Referrals

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.

Health Care Timeline & Its Affect on the Tax Code

I recently read an interesting article “Health Care Reform Reshapes Tax Code” by Alistair M. Nevius, J.D. in the April edition of the Journal of Accountancy.

This article provides a good summary of the various tax code changes that you will see between 2010 and 2018.

To view the article please click the following link Health Care Reform Reshapes Tax Code

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.

IRS Look-Up Tool for Economic Recovery Payment

Due to the large volume of electronically filed tax returns that have been rejected, the IRS has finally decided to address the issue. It is awfully nice of them to wait until the very end. After all there are only three weeks left before the April 15^th tax deadline.

What is the issue? It’s simple as with human nature we tend to forgot various details during the course of our busy lives. Many taxpayers do not remember if they received the one-time $250 payment during 2009 from the Social Security Administration, the Department of Veteran’s Affairs, or the Railroad Retirement Board. The result of this has been that they are claiming an incorrect tax credit amount and thus having their tax returns rejected by the IRS.

Starting March 23, 2010 you will be able to go to www.irs.gov to find out if you have received this payment during 2009.

You will need to enter the following information on the IRS website.

• Social Security number
• Date of birth,
• ZIP code from the most recent tax return.

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.