TaxMamas TaxQuips

Today TaxMama hears from Leah in Georgia who wants to know. “What is the best small business tax software? I have doubts about QuickBooks and Quicken for business.”

Dear Leah,

Hmm…I can understand your doubts about QuickBooks and Quicken as tax software, since neither of them are. They are bookkeeping programs. Tax programs, for professional use, include software like ProSeries, Pro fx, Drake, ATX and more, programs you can find here: http://taxsites.com/software.html

Are you asking about the best software to use for bookkeeping? That’s a different matter. The best software depends on the level and complexity of information a company needs. You can get accounting programs costing several thousand dollars, or just a couple of hundred dollars. http://taxsites.com/software2.html

You’re right about Quicken. I see it used for business. But the reports are a total pain. Too much personal stuff gets mixed into it. It is terrific for managing and understanding personal finances. And it has some nice features I particularly like. But..no – not for business.

Personally, for working with small business offsite, I prefer QuickBooks online.
http://www.taxquips.com/index.php?id=552

Why? Without having to visit the client’s office or business location, I can do all the bookkeeping from my office. We can get on the phone and look at the same information at the same time. They don’t have to stop working, while I have their books – and I am not limited to the accounting adjustments in the accounting back up of QuickBooks.

Besides, everyone seems to be traveling for business these days. My clients can log in from anywhere in the world and enter their daily cash expenses, or issue checks.

It’s gotten much faster and more versatile than it used to be. AND, now you can convert a regular QuickBooks file to the online version when you set it up. That was not a possibility in the past.

The software has always been flexible. You can always make entries for prior periods, out of order – so you don’t have to wait until you have all the check information or invoice information. You can correct entries when you reconcile the checkbook. And if you learn all the capabilities of the system, you can use QuickBooks for just about any kind of business and generate just about any kind of reports. Those are just some of the reasons why I prefer it.

Stay tune to TaxQuips #1269 the comments from other tax and accounting professionals for their favorite software.
http://taxquips.com/index.php?id=1269

And remember, you can find answers to all kinds of questions about bookkeeping and other tax issues, free. Where? Where else? At TaxMama.com

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TaxSites.com

List of Tax Software

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List of Accounting Software

TaxQuips #552

Review of QuickBooks

Someone brought something interesting to my attention yesterday. And he made a good point. I’ve noticed it, too, especially in the nature of questions I get from readers who’ve set up a quickie corporation.

Folks who’ve incorporated, but never really got around to using the corporation seem to think they don’t have to file anything. Uh, unclear on the concept? Look, you set up a corporation. You alerted IRS that you exist by getting your federal ID number. IRS is looking for paper. They don’t know that you didn’t do a thing; that you never even opened a bank account; that you didn’t sell a dime’s worth of products or services.

How is IRS supposed to know that? Only if YOU tell them. That means you must file a tax return. Even if it’s all zeroes. And you have to file it by March 16th this year.

If you don’t really know what to do, at the very least, buy yourself 6 months of breathing space. File an extension. That would be Form 7006. It’s automically approved. No explanations needed. That will give you time to get advice and help, if you need it.

To make sure that your extension is received by the IRS on time, the best way to do this is to file electronically. Get 25% of by using this link with coupon code taxmama25. http://snurl.com/filelater

For those with corporations that have actual activity – like, running a real business, you may find yourself having to pay money with your extension. http://snurl.com/filelater is designed to let you pay electronically and to get a receipt for the payment. The neat thing about the way they’ve set up the payment system is that the money comes directly from your bank, instead of via a credit card – no ‘convenience fees’!

Although many states accept the IRS extension, the state in which you’ve incorporated may not. Look up your state’s rules here. You’ll also find links to the right state forms.

Incidentally, you can use http://snurl.com/filelaterto file your personal extensions and get an electronic receipt, too. Those are be due on April 15th.

Ask TaxMama

Where taxes are fun and answers are free

www.TaxQuips.com

The number ONE free tax podcast online

FileLater

Convenient Extension service for business and personal returns

When filling in for an absent guest with Brent Clanton this week, he asked me an interesting question. “What if President Obama came to you right now and asked your advice on how to re-start the economy? What would you tell him?”

What would YOU tell him?

Ask TaxMama

Where taxes are fun and answers are free

www.TaxQuips.com

The number ONE free tax podcast online

In the course of addressing the concept of people helping each other, and this presidential campaign where the candidates talk of pushing the tax burden on the very rich, the top few % of the population – there’s a great deal of criticism or sarcasm. Marx’s concept of ‘FROM each according to his ability; TO each according to his need’ which was so brilliantly, and scornfully exposed in most of Ayn Rand’s novels doesn’t hold true in today’s economy.

Today, the average ‘taxpayer’ is working more hours than ever on jobs that are paying less than ever before. They are not slacking off. They are not freeloaders. They just aren’t earning what they are worth. The median income level for 116 million American households for 2007 was $50,233
http://www.census.gov/prod/2008pubs/p60-235.pdf
Can you really support a family of four on that in an urban area where just the rent/mortgage is about $14,000 per year?

IRS statistics (2005) show that less than 3% of the population has income over $200,000.
http://www.irs.gov/pub/irs-soi/05in01hi.xls (and less than 3 million people with net worth of $1.5 million or more.)

The problem is, among the 1/3 million taxpayers whose net worth is over $5 million are many executives on Wall Street and publicly held corporations who have been paid millions of dollars for doing a sub-standard, or even criminal job – or for selling sub-prime loans, knowing the homeowner would never be able to make the payments when the honeymoon rate ended. These people are not the Randian or Nietzschian superman who perform to top standards or create great works.
http://www.irs.gov/pub/irs-soi/04in01pw.xls
Since they won’t have to face legal fees or criminal prosecutions, do you really mind if they pay a little extra tax to cover the cost of unemployment, health care, and housing for those whom they’ve bankrupted?

In an interview with the Libertarian candidate Bob Barr on one of the news shows last weekend, he was asked what he would have done if he were president during this troubled time. Barr said one of the first things he would have done is to instruct the attorney general to start some criminal investigations in the misconduct by Fannie Mae and Freddie Mac. (Why haven’t I heard anyone else say that?) One of his press releases says , “We need an independent investigation of the money spent and tactics used by Freddie Mac and Fannie Mae that enabled them to so abuse the public trust.”

I don’t know very much about this Libertarian fellow who used to be a Republican Representative from Georgia. What he does tell us about himself is – that Bob Barr supports firearms, and is for marriage for everyone. But doesn’t even mention a woman’s right to chose on his list of issues at all. (Don’t you want to know which way he leans?) He is an advocate of less government – in keeping with the Libertarian philosophy.
http://www.bobbarr2008.com/about

Let’s face it, we all like the idea of less government – and having the government stay out of our business. In fact, we just saw the results of the government staying out of the mortgage industry. They stopped overseeing the transactions and removed the regulations. Did the market forces take care of things themselves? Heck no! Perhaps the laissez faire concept doesn’t work as well as theorists think it should?

Barr does want to reform the tax system, perhaps replacing income taxes with a consumption tax, like the Fair Tax System. It’s like a national sales tax of 23% (wow!). As a consumption tax, it’s a regressive tax. The burden is higher on the taxpayer who spends the largest percentage of her income on consumables – poor and middle class. Sure, the wealthy may pay more in absolute dollars (think of the tax on a yacht). But as a percentage of their income, the Fair Tax is a small percentage. I’d still rather see a flat tax on taxpayers and businesses – where everyone who earns more than 2x or 3x minimum wage pays a fixed amount of tax. Period. With no fudging or cheating, the overall tax rate can be lower.
http://www.fairtax.org/

Hey, this is neat. The Fair Tax folks compared McCain’s and Obama’s tax plans to the Fair Tax.

By the way, looking at the IRS statistics from 2005 tax returns, have you come to realize that Barack Obama wants to shift the largest part of the tax burden for the entire country onto the shoulders of about 3 or 4 million taxpayers? As angry as we might be at the country’s current economic situation, that’s impractical and ridiculous. We need a president who’s in touch with financial reality.

We’ve already talked about McCain’s proposal to switch health care costs and choices directly to the taxpayer by giving each household $5,000 to cover the cost of over $12,000 worth of premiums for a family of 4. What a clear understanding of family finances that is!

Unfortunately, so far, none of these candidates make me feel secure about our future.

Please, please, someone tell who we can trust to lead our country?

We’re getting down to the wire and I can’t figure out who is going to the least damage if elected!

Ask TaxMama

Where taxes are fun and answers are free

www.TaxQuips.com

The number ONE free tax podcast online

Census Bureau Reports

Income, Poverty, and Health Insurance Coverage in the United States: 2007

IRS Stats

Analysis of 2005 Tax Returns

IRS Stats

Top Wealth Holders of $1.5 million or more 2004

Bob Barr, Libertarian Presidential Candidate

Call to Investigate Fannie Mae and Freddie Mac

Bob Barr, Libertarian Presidential Candidate

About Bob Barr and his policies

The Fair Tax

A National Sales Tax of 23%

The Fair Tax

Comparison of Presidential Tax Plans

Since this is Shameless Promotion Month, I suppose I’m obligated to promote myself – shamelessly.
So let’s see what’s going on this month, OK.

1) Join me and some extremely interesting speakers at Knotts Berry Farm on September 25-27th at NATP California’s Annual Conference and Meeting. I’ll be teaching two workshops on exciting things like preparer penalties and how to do a terrific client interview so you glean every bit of useful information from your client – to keep their taxes the lowest possible, legally. You’ll learn all about this year’s Tax Court Exam (they only offer it every two years); reporting issues for same-sex marriages; the mortgage relief rules – and all the California and Federal updates.
http://taxquips.com/index.php?cat=TaxEducation
http://taxquips.com/index.php?cat=TaxEducation

2) The live class for the EA Exam Review is wrapping up. We’ll be finished by Saturday the 20th. Don’t despair. All the recorded and written lectures are available for Enrolled Agent candidates to use to help you pass this year’s exam on a self-study basis. You can still team up with study buddies around the country – heck, around the world! (I am hearing from students every day about their experiences passing each successive segment of the exam.)
http://irsexams.com/board/blog/irs_exam/index.php?cat=7

3) I will be recording a video series of tips for small businesses in October for a powerful and fascinating small business site to launch next year. The good news is, once they are placed on a new site launching next year, you’ll have access to them at no charge. In fact, you’ll have access to top of the line information from a dozen business experts on the same terms.
(links to come)

4) I need to finish up the proposal to McGraw-Hill who wants to issue a new edition of Small Business Taxes Made Easy. Next year, you’ll get a book filled with tips to help you build a business properly, and take the best tax advantages.
http://www.taxmama.com/AskTaxMama/book/

5) In the meantime, I’ll be updating the ever-evolving e-book, The 100% Home-Based Business Solution
and teaming up with Tom Buck, CPA to package it with his recorded audio lecture series – and a monthly webinar we will present jointly to help small businesses deal with your tax questions.
(links to come)

6) I am recording a one-hour interview with Ed Gandia, of www.TheProfitableFreelancer.com to go with a kit for folks contemplating starting their own business. It will be out this year.
www.TheProfitableFreelancer.com

7) This month, I will be recording two video courses for The Learning Annex – one is the “Do-it-Yourself Offer in Compromise”, the other is 10 Businesses you can Start Cheaply – or even for free.

8) You will find TaxMama quoted in dozens of major publications (print newspapers, magazines, trade journals and online) over the next few months, since I speak with at least one journalist a day.

There’s probably more…when I remember, I’ll add it in.

Ask TaxMama

Where taxes are fun and answers are free

www.TaxQuips.com

The number ONE free tax podcast online

NATP-California Chapter Annual Conference and Meeting

TaxMama's EA Exam Review Course

Take the Self-Study Course

TaxMama's Book

Small Business Taxes Made Easy

TaxMama's evolving e-book

The 100% Home-Based Business Solution