REMEMBERING THE PAST

Cartoon from 1934 Chicago Tribune
Those who cannot remember the past are condemned to repeat it.
George Santayana, The Life of Reason, Volume 1, 1905

STORE FRONT TAX PREPARERS

I recently ran into an old client of mine who had moved out of state. When I asked what she was doing, she proudly told me that she had set up a store front income tax service. We chatted for a while, as tax preparers do, and she told me that most of her clients were small businesses or individuals. I mentioned to her that we had many of our clients incorporate or set up limited liability companies over the last few years. Her response to that was, “Oh, I would never do that, if they switched it would really hurt my business.”

I told her I didn’t understand because there are so many advantages out there for certain small businesses to be either an S corporation, C corporation or partnership. Along with the potential liability protection, I did not understand why not to recommend different forms of doing business. Her comment was, “We do not do corporate or partnership tax returns so if I told them to switch forms of doing business, they would have to go somewhere else to get their tax work done and it would cost me money.” Unfortunately, her clients did not know the possible tax savings they could be getting.

I couldn’t help but think what a disservice she was doing for those small businesses that should be entertaining different forms of doing business. The only thing I could say was, “Be on the look out for part time tax preparers.”

Larry Kopsa CPA

KOPSA OTTE SURVEY RESULTS

Getting client feed back is very important to our accounting office. We want to make sure that if we did not meet your expectations, we fix the problem. I’m happy to report that 30% of the surveys were returned and that 100% of the surveys said they would recommend us to others.

To do our surveys we used Zoomerang, which is a very inexpensive and efficient way to do email surveys. We only had five questions on our survey so it was easy for clients to fill out and return back to us. If you are considering a survey, take a look at www.Zoomerang.com. It really worked well for us.

Larry Kopsa

IDENTITY THEFT

Don't think that scams only happen to the "other guy." We have clients that have dealt with the repercussions of identity theft and in fact, a form of identity theft recently happened to us.

One of our staff members used her company credit card last Friday at the local post office, and on Sunday she had a message from the credit card company suspecting fraudulent charges. It turns out that $3,000 had been charged on her card over the weekend. The 'thieves' had a great weekend going to the Hampton Inn, Apple Computer, Best Buy and so on...

The offended credit card is now cut up, while we are busy filling out fraud paperwork for the credit card company. Our hopes are that the 'thieves' are caught before they steal again.

About.com published an article called, Credit Card Protection Basics. It's worth reading. I guess you never can be too careful.

Larry Kopsa CPA

ACCOUNTABLE EXPENSE REIMBURSEMENT PLAN

Larry, I run a small business and have two full-time employees. One of the employees is always asking for an advance on her paycheck. I am hesitant to do this without some type of agreement. Do you have any type of agreement so I can make sure I get reimbursed?

Sammie

Sammie, we have a client who recently went through an audit and they did not have a reimbursement plan in place. The auditor was quite fussy regarding this detail.

If you don't have a plan in place, go to Accountable Expense Reimbursement Plan on our website to learn about recording your business expenses.

Larry Kopsa CPA

MAYBE YOU WON'T GET SOCIAL SECURITY BENEFITS AFTER ALL

When I talk to clients about social security tax, I always hear the same response. “I probably won’t get social security benefits anyway.” Now, that is becoming reality.

According to an article in the Washington Post, President Obama has hinted that maybe everyone will not receive social security benefits. As he calls it, “entitlement reform.” That means hundreds of billions of cuts in social security, Medicare and Medicaid. The social security fix will be “relatively easy”, combining a means test that will scale back benefits for the wealthy with an increase in the retirement age.

What this means is, if you have been prudent and have saved money in your pension plan or in outside savings, don’t plan on receiving full social security benefits. The government has to pay for the one trillion dollar deficits somehow.

Larry Kopsa CPA

UNLIMITED NUMBER OF VEHICLES MAY QUALIFY FOR NEW SALES TAX DEDUCTION (Which posting will this change?)

An IRS spokesperson says that the new deduction for sales taxes on a qualifying motor vehicle is not limited to taxes paid or incurred on a single vehicle. Rather, taxes paid or incurred on two or more vehicles may qualify for the deduction.