Category Archives: Accounting

Finding The Simplest Tax Form For Your Filing Circumstances

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If you happen to be one of the taxpayers who will be filing a paper return, the IRS would like you to note that it will no longer be mailing paper tax packages, which is a transition that was made by the agency due to the substantial increase in electronic filing, the accessibility of free filing alternatives and as a measure to reduce spending. If you will be e-filing your taxes, the best form for you will be selected by the software that you opt to use. If you are filing a physical tax return, however, it is best to keep the process basic by opting to use the simplest tax form for your filing circumstances.

www.irs.gov, the website for the IRS, is the fastest way to get instructions and filing forms. These forms and all related information can also be accessed by visiting an IRS office in your area, through various community outlets such as post offices and libraries, or by using 1-800-TAX-FORM, the automated forms line of the IRS.

Following are several general rules to consider when determining which of the forms will be best for you.

The 1040EZ can be used if:

You earn less than $100,000 in taxable income
You will file as single or married and filing jointly
You will not be claiming dependents
Your interest in income is less than or equal to $1,500

The 1040A can be used if:

You earn less than $100,000 in taxable income
Capital gain distributions apply
You are qualified to claim tax credits
You will be claiming income adjustments for student loan interest and IRA contributions

If you are unable to use either the 1040A or the 1040EZ, you will likely need to use the 1040 to file. Several reasons for need to use the form 1040 include:

You earn more than $100,000 in taxable income
Itemized deductions are claimed
Self-employment income is being reported
Income from property sales is being reported.

Fast and easy access to IRS instructions and forms can be gained by visiting the IRS website at www.irs.gov. You can also visit here to learn more about e-filing your returns. There is 24 hour availability for all tax products each day of the week and many of these are available online long before they can be accessed on paper. To access and download tax forms and other products, visit the IRS website and navigate to Forms and Publications.

Implementing Asset Tracking In Your Business

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The term asset tracking refers to any of your fixed assets in your company which needs to be tracked and monitored. If you’ve spent money on an inanimate object that isn’t going to directly make any money back for the business, this is a fixed asset. For example things like your computers, fax machines, office furniture or company vehicles. These assets were always traditionally tracked by hand using a spread sheet. If you’re relying on spread sheets you can expose your data to human error and as this technology becomes more advances, asset tracking software is becoming increasingly popular.

Asset tracking software has many benefits. The most obvious is that it will save your business a lot of time. Adding by hand all your fixed assets into a traditional spread sheet will take a lot of man hours. This software can track all assets once they’re entered into the software and keep everything up to date. You also have the peace of mind that human error can’t be brought into your data. Factors like depreciation are hard to track by hand as are keeping up with warranties and lease expiration. Asset management software will also work as depreciation software too which ensures you meet any audit requirements. If you have any industry regulations you must adhere to this software can make sure you remain compliant. You also have to ensure when you’re valuing your assets they’re not over or undervalued Getting Your Head Around Asset Tracking. This can be a hard calculation to make when you’re going it by hand. When you’re using asset tracking software you might also find that insurance providers are able to offer lower quotes.

Inventory management software is usually pretty easy to set up and use but it’s essential that you get user buy in. You have to update the software whenever you invest in any new assets or whenever you retire them too. At the same time if something is moved from its regualr home again the software needs to be updated.

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Requirements to File a Tax Return?

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In general a tax return should be filed if an individual or couple earns income at or above a specified amount. The IRS recommends that people file even if they do not reach the specified level for many different reasons. Some may be eligible for a refund on taxes paid. Others may qualify for certain credits if the meet the guidelines.

To determine the individual need for filing a person can visit the Internal Revenue Service web site or look over the various 1040A, 1040EZ, and 1040 tax forms. Instructions and explanations that go along with the forms may help individuals determine the need for filing. An interactive tax assistance web site can also help by asking the person a series of questions related to income and payments. It is based on current tax law so accurate answers can be of great help.

Even if filing is not required for the 2011 tax year the list of reasons below will explain why you may want to consider doing so:

1. If you worked and have federal tax withheld by the employer, if you made estimated payments, or if you had an overpayment the prior year you should file.

2. If you worked full or part time but did not earn much you may be eligible for the Earned Income Credit. Many individuals with a qualifying child are eligible for the refund but never take advantage of it. Even without a child if the income is low enough an individual may qualify, but a return must be filed to receive the credit.

2. The additional child tax credit if available for a parent or parents who have at least one child as a dependent. It is also available to those who do not get the full amount of the child tax credit.

3. College students in their first four years of studies may be eligible for up to two thousand five hundred dollars. The credit is refundable up to 40% so even those with no tax liability can quality and receive up to one thousand dollars for each student.

4. If you adopted a child in 2011 you may be able to itemize adoption expenses for the child.

5. People who receive assistance through the reemployment or trade adjustment programs or who receive pension benefits may qualify for a health tax credit.

6. Those who spend a significant amount of their income on health insurance premiums may also quality for credit for such payments.

There are many instances where a person without taxable income may be eligible for a refund. It pays to file Federal Income Tax return or at least learn about all the possible credits and refunds that may be available.

All About Invoice Factoring

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Invoice factoring is one of the best and quickest ways to gather enough funds for a business that is just starting up and establishing its name in the marketplace. In order to obtain these funds, the company should sell their invoices to a factoring company that would handle the collecting of the customer invoices. This article will discuss what factoring is and what it can do for your business.

With invoice factoring getting money for your business is relatively easy and simple and it is different than the normal debt and loan financing options. Usually small businesses can really benefit from invoice factoring, small businesses are typically the type of business that needs immediate cash to expand and grow their business. Factoring only requires stable clients, accounts receivable, and factoring company that will do the job for you.

Invoice factoring is a business activity that is utilized in raising money while waiting for the invoices to be paid by the customers. With invoice factoring cash will flow continuously for the business and this provides working capital directly to be used by the business to continue its operation and expand later on. This type of financing offers flexibility because the amount of the money allowed to be borrowed will increase when your company’s sales increase.

Invoice factoring simply means selling accounts receivable to a factoring company. Selling receivables offers a lot of benefits that will definitely help in the improvement of the cash flow in a business. Accounts receivable financing eliminates the bad debt of the company because the factoring company will deal with the debtors. It also enables fast invoice processing because the factoring company will handle invoice posting, checks and cash depositing, payments updating and report generating. It is also the source of unlimited capital for the company because as sales grow and increase, this also means instant cash is available by selling these freshly-made receivables to a factoring company.

Receivables financing also helps the company to avoid selling or pawning their assets (such as home or business entity) to acquire capital for their business. Finally invoice factoring is not considered a loan so it is not an additional liability on the balance sheet of the company.

When invoice factoring is used correctly, great benefits can result. The biggest advantage is providing enough cash flow and immediate capital for the business to continue its operation and eventually boost the growth of the company as well.

Calculating the Price of Medical Receivables Factoring

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As the economy continues to slump, health care centers are looking for a way to keep their businesses going. One way that they are considering is medical accounts receivable factoring. However, it can be difficult to calculate the true price of factoring.

Factoring occurs when a medical center take a receivable, either from an insurance agency or a patient, and sells it to a third party financing company, the factor. The factor will usually give around 80 percent of the value of the invoice or receivable at the time of the sale. Then when the factor receives the money for the receivable from the insurance agency or patient, the factor remits the remaining 20 percent to the medical center (in practice the factor will usually only remit 17-18 percent of the remaining portion and keep the remaining 2-3 percent as a factoring fee). This arrangement allows medical clinics to get paid instantly for their work and it allows factors to make a profit at the medical center’s expense.

It is important that health care centers calculate the price they are paying for factoring. Usually the charge is around 2-3 percent per month. If a medical center entered into a onetime arrangement to sale $100,000 worth of receivables to a factor, then it would be charged two to three thousand dollars per month. Medical centers have some control over the amount of time the receivable will be outstanding because they can choose to sell the receivable right away, or they can hold on to the receivable for a while and then sell it. Let’s assume the medical center sells the receivable right away and it takes two months for the factor to collect the receivable (not a bad assumption given health care industry averages).

In our above example the medical center would receive $80,000 on day 1. At this point the center is very happy because it has cash that it otherwise would not. After two months the medical center would receive another $16,000 (assuming a 2 percent rate charged in this medical receivables factoring agreement). A $4,000 fee doesn’t seem too bad, but on an annual rate it is a staggering 24 percent. This is a pretty high financing fee, but one has to consider the flexibility involved in this time of transaction when compared to a bank loan.

Medical receivable factoring is expensive, but it is also flexible and easily scalable. If a health center knows it’s going to need cash and can plan for it, then it is probably better to go with a long-term loan. However, for short-term solutions factoring might be the way to go.

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