Pembroke Pines CPA

11/01/2022

The Frailties of QuickBooks

Because we care about you and your businesses’ success, I will share some personal insight on what I have found and seen with Small Business Owners’ trusting their internal accounting to hired, unrelated, unsupervised bookkeepers.

QuickBooks is an amazing product, an innovative solution which has helped countless Small Businesses capture historical information on their activities and very affordable if used correctly. However, there are frailties with this low cost, off-the-shelf accounting software. We are not only experts in Quickbooks, we are the trusted advisor to many local small businesses and we've help them solve problems since 1981 with our full tax and small business advice and solutions. We are Certifed to help you and your small business. We help business owners understand and manage their growing businesses in Pembroke Pines, Cooper City and all of Broward County. Trust in us as your CPA advisor.

If YOU are using it for YOUR business, QuickBooks is worth its weight in gold; if your spouse or other closely related individual is doing the day-to-day accounting, QuickBooks is a life-saver. However, some frailties appear when YOU trust others to manage your accounting and maintain your “books and records”.

QuickBooks, in the way it is used by many Small Business owners, can be unsecure. Bookkeepers, or anyone in charge of the daily posting of activity, can actually CHANGE the information. The one who inputs the data, can immediately change the format, the payee, the amount paid, the date… ANYTHING that was posted can be changed.

An example would be recurring payments to utilities companies (FP&L, trash collection, water supply, etc), vendors, and employees can be posted in one amount… than CHANGED to meet the needs of someone other than you.

(i.e., payment of $540 on an FP&L bill which averages $450 monthly would allow the bookkeeper to pay in 10 months the annual FP&L bill and possibly allow the bookkeeper to write a check to her/himself EVERY SIX MONTHS for the new average bill of $540 without ever being suspected or caught. Pay the “6th FP&L” bill on the books to themselves, in their name, and then change the record, immediately after printing the check, to reflect FP&L’s name)

Same thing with major vendors. YOU, as the business owner and trusting your internal bookkeeper, would never have the time or reason to question an extra payment to a recurring vendor… until it was too late.

I can help you. I can, in my normal monthly or timely work, come in and check your payments against invoices. I know what to look for and what the perils are. I do this every day and know how to find discrepancies.

Call if you think that this sounds helpful to your business or if you could think of someone who would benefit from having this excellent service available for their business.

Thank you

Respectfully,

Joseph S. Lania, CPA

Call Mr. Lania directly (954) 815-3975 cell

Thank You to all of our faithful clients in Pembroke Pines, Cooper City

and all of Broward County for your continued trust in us !!

Pembroke Pines CPA Cooper City CPA Broward CPA Small Business CPA Davie CPA IRS help CPA

10/30/2022

We are Accounting and Tax Experts

Joseph Lania CPA, PA is an established accounting firm well-respected for providing prompt, personal and professional service in all of your needs including filing all personal tax returns, preparing your business taxes, expert business accounting advice, non-government audits, QuickBooks training and condo tax and audits.

From your initial meeting with us, you will know the difference. We provide our clients with a higher level of professional service. Our mission at Joseph S. Lania, CPA is to help our clients succeed in business, while honoring our obligation to the public, all within the framework and high standards of our profession. We value all of our clients, and it shows in the quality of our service.

08/25/2022

IRS relieves penalties for 2019 and 2020
By Paul Bonner
August 24, 2022

A broad range of tax and information returns for 2019 and 2020 tax years will receive automatic relief from failure-to-file penalties, under Notice 2022-36 released by the IRS Wednesday.

The estimated 1.6 million taxpayers who have already paid these penalties will automatically receive an estimated $1.2 billion in refunds or credits, the IRS said in the notice and announced in a news release. Abatement of the penalties is also automatic.

Taxpayers do not need to request this relief, and the IRS said it will pay most of the refunds or apply credits by the end of next month. However, any return still unfiled for the two tax years must be filed by Sept. 30, 2022, to be eligible for the relief.

Also, the notice abates penalties for failure to timely file any information return (as defined in Sec. 6724(d)(1)), such as those in the Form 1099 series, for the two tax years. To be eligible, information returns for 2019 must have been filed on or before Aug. 3, 2020, and 2020 information returns by Aug. 2, 2021.

In addition, various international information returns such as those reporting transactions with foreign trusts, receipt of foreign gifts, and ownership interests in foreign corporations will receive similar relief. However, to qualify for the relief, any eligible tax return must be filed on or before Sept. 30, 2022.

The relief measure is intended "to help struggling taxpayers affected by the COVID-19 pandemic" and to allow the Service to "focus its resources on processing backlogged tax returns and taxpayer correspondence to help return to normal operations for the 2023 filing season," the IRS said in the release.

Another reason for the relief is that additions to tax or penalties for failure to timely file returns continued to accrue during periods of postponed filing dates for returns for both years, under the presidential emergency declaration in March 2020 in response to the pandemic, the IRS acknowledged in the notice.

Tax returns eligible for the relief include specified returns in the Form 1040, 1041, and 1120 series. Also eligible are Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return; Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation; and Form 990-T, Exempt Organization Business Income Tax Return (and Proxy Tax Under Section 6033(e).

In addition, Form 1065, U.S. Return of Partnership Income, and Form 1120-S, U.S. Income Tax Return for an S Corporation, may have penalties forgiven for failure to timely file and for failure to show required information.

The notice also covers certain international information returns, such as Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, and Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business, attached only to Forms 1065 and 1120. It does not provide relief for taxpayers filing returns with certain international information returns, e.g., Form 5471, attached to returns other than Forms 1065 and 1120, such as Form 1040 or 1041.

Penalties for fraudulent failure to file under Sec. 6651(f) or the penalty for fraud under Sec. 6663 are not eligible for relief. Any penalties included in an accepted offer in compromise, settled in a closing agreement under Sec. 7121, or finally determined in a judicial proceeding are also ineligible.

The AICPA and other groups and firms have repeatedly advocated that the IRS provide failure-to-file and other penalty relief under procedures similar to those for a first-time abatement administrative waiver but based upon the COVID-19 pandemic as reasonable cause for the failure.

"As the coronavirus is an extraordinary event unlike anything faced in recent history, penalty relief based on a coronavirus effect should not be considered first-time abate," the AICPA said in a May 17, 2021, letter to IRS Commissioner Charles Rettig and Acting Assistant Secretary for Tax Policy Mark Mazur.

In the IRS news release, Rettig acknowledged such input.

"We've been working on this initiative for months following concerns we've heard from taxpayers, the tax community, and others, including Congress," Rettig said.

01/28/2022

ESTABLISHING YOUR SMALL BUSINESS

What do we need in order to establish the right small business?

• Vision : Number one, we need a vision. A vision of what we intend to do and who we intend to sell it to. A vision has to be YOURS. It’s hard to live someone else’s dream. You need your vision to wake you and move you each day. It is your clear vision that will keep you going when times get rough, when business gets slow and others become doubtful

• Money : You will need money. Hopefully, your OWN money. If you have none, then you need to carefully reconsider your timing to start your business. Someone else’s money costs you. Someone else’s money creates not only debt, but an unintentional partnership.

• Time : You will need time. Time during the day (and many nights) to devote to your business, develop your vision and see that things get done. Very few things that are worthwhile happen overnight. Small businesses DEMAND lots of YOUR time.

• Support : Your family, friends and others who support you and your vision are crucial to effectively running and building a successful small business. I can not emphasize this enough. Discuss these things with those around you BEFORE you step out. It will save a lot of heartache and hurt feelings later when your business demands your attention.

• Supply/Demand : You must meet an un-met need. I can not stress this enough. There MUST BE consumers of your product or service that are currently having un-met needs in order for your business to thrive. This is a key to establishing a successful business.

• Partnership agreement : You will, if you have partners, need a partnership agreement. Go to my website. It will avoid problems down the road. While everyone is happy, you do what I carefully outline on my website. It will, I guarantee, make a difference in your life. (yes, your life!) I can tell you horror stories all day about this issue.

• Payroll system : Probably the #1 cause of failure in an otherwise successful small business is the abuse of payroll, payroll taxes, sales tax and other compliance issues. Beware of the traps suggested by friends. Pay your employees, withhold the proper taxes, make the deposit and sleep well at night. If you were charged five thousand dollars for these 10 minutes, this one point would make it worth your investment.

03/25/2021

(OK, bottom line to those who don't want to read the article below, this IRS change is "good news".)

IRS expands unemployment tax exclusion to more taxpayers
By Michael Cohn
March 24, 2021, 4:21 p.m. EDT

The Internal Revenue Service has changed the calculation for determining the $10,200 exclusion on unemployment benefits in the new pandemic relief package, allowing more taxpayers to qualify, but forcing tax software developers to update their programs.

The IRS updated the instructions Tuesday on how to figure the amount of modified adjusted gross income to use for deciding how much of a taxpayer’s unemployment benefits from 2020 qualify for the $10,200 exclusion on taxes. Prior to Tuesday, the IRS instructed taxpayers to include the unemployment income in modified AGI, but now they can exclude unemployment benefits from modified AGI.

The American Rescue Plan Act, which President Biden signed into law this month, allows taxpayers who earned under $150,000 in 2020 to qualify for the $10,200 exclusion. The change will allow more taxpayers to qualify now. But it does complicate matters for tax software companies and tax preparers.

“As a tax adviser, you may have recently installed a tax software update to take into account the unemployment compensation exclusion for 2020 passed as part of the American Rescue Plan Act of 2021 and found at IRC §85(c),” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch, in his Current Federal Tax Developments blog for Kaplan Financial Education. “Now it turns out that, due to an IRS change of heart on how to read IRC §85(c)(2)(B), your software may now be subjecting unemployment to tax the IRS has now decided is not to be subject to such tax.”

He noted that the IRS’s original instructions had taxpayers include the unemployment compensation in determining the modified AGI (reading “without regard to this section” in section 85(c)(2)(B) to mean without regard to the exclusion in section 85(c)) but the new instructions imply without regard to any unemployment compensation covered by section 85.

“In the interim, many (but not all) tax software providers updated their product to calculate the exclusion, presumably using the original March 12 instructions,” Zollars wrote. “Advisers will need to carefully review returns run under that software that determined the unemployment was taxable to determine if that remains correct under the March 23 worksheet.”

The IRS has been rushing to provide guidance on the American Rescue Plan Act in the midst of tax season along with the tax provisions of the other stimulus packages that Congress approved this past year in response to the economic fallout from the COVID-19 pandemic, including the CARES Act, the Families First Coronavirus Response Act and the Consolidated Appropriations Act. The unemployment provision has proven to be especially thorny since it was passed after most tax software began to be distributed this year for 2020 taxes. Some tax preparers had worried they might need to file amended returns for clients who filed early this tax season who received unemployment benefits last year, but the IRS has asked taxpayers to avoid filing amended tax returns (see story). IRS Commissioner Chuck Rettig reiterated that advice to lawmakers during a congressional hearing last week and said the IRS would handle the change on its end (see story).

Nevertheless, the latest twist is sure to add more uncertainty for some tax professionals, even though it does offer the possibility of extra tax relief for some clients. “I think the change that’s been going on in terms of the guidance with the 150 AGI including any unemployment benefit and the reversal yesterday when they came back to the idea of 150 of AGI after you deduct out your $10,200 per filer of unemployment benefit, that’s just more chaos,” said Edward Renn, a partner in Withers’ private client and tax team. “I’m sure they think they can do it, but I don’t understand how they know everybody that filed a return with unemployment compensation that they owe a refund...”

03/06/2021

OK, we have a little bit of a problem originating this morning with our Senate. The bill that they approved included a nice, generous (and very untimely) provision for a tax exclusion on the first $10,200 of Unemployment Benefits for 2020.

So, once (and if) this legislation gets through the House of Representatives and then signed by Biden... those who have ALREADY filed their 2020 federal income tax returns which included taxable unemployment income WILL NEED TO AMEND THEIR 2020 RETURNS.

A small problem is that the IRS hasn't released the Amended form... Form 1040X.. yet.

Small problem, easily fixed, just wait and file in a week or so. (we do have to wait for this new legislation to be signed into Law first)

01/27/2021

OK, to those small businesses who applied for, and accepted, EIDL loans from the SBA (funded via your business bank), we are coming up on payback time.

The EIDL loans, unlike the PPP loans that can be forgiven, MUST be repaid. The time to start repayment is now.

How do you do this? What are the procedures? Where do you go?

You go to www.pay.gov and complete the SBA 1201 borrower payment form. I would highly suggest that you FIRST register and set up an account for your business, so that your payments can be tracked to your loan activity. (I know this doesn't "make sense", but it's a .gov set-up)

Once you create an account for your business, then you can pay whatever amount that you choose.

Remember, since you will eventually have to repay the ENTIRE loan, carefully consider your periodic payment amounts so that you can achieve full repayment with the least amount of hardship to your business, and the least chance of having a "got'cha" moment in the future if your repayment schedule and amount was too lax.

That's it. Start doing the above, and you will be well on your way to retiring this SBA debt for your business.

01/05/2021

OK, you tried to keep your head above water using QuickBooks in your Small Business during 2020.
Now, looking back at the year, the database has some really weird posts and obvious errors. For too many entries, you had no clue where to post it, so it posts to "Ask My Accountant"

Who is going to save you? We will.

(954) 432-2299 is your lifeline.

Hold on, we'll bring you to 100% tax compliance.

01/02/2021

http://www.laniacpa.com/2019-small-business-keys.html
Ready for a successful 2021? Let's get your business ready.

Your dependable CPA in Broward County and Pembroke Pines working out of Cooper City since 1981 for businesses and individuals.

01/02/2021

The Stimulus payments have gone out... electronic payments of $600 for singles and $1,200 for married couples, if the IRS has your banking information to deposit directly. Others will either receive a check in the mail or a debit card loaded with the stimulus payment.

This is the 2nd Stimulus this year, and based on your '2019 income taxes, as filed.

Joseph Lania CPA serving Pembroke Pines, Cooper City and all of Broward County since 1981.

06/25/2020

My suggestion is to "leave it alone" until you have to respond to your bank... because there may be additional forgiveness or latitude given by the SBA/IRS soon.
If you already met the "old requirements" (and most, if not all, of my clients have) you may be tempted to "just get it over with" and have the loan forgiven. But, what's the rush? You have met all of the forgiveness rules and need to just sit back (plus, your bank is the one who is handling this... don't push your bank unless they're asking for documentation. You've met the rules, YOU'RE GOOD.

But, for those who still want to get it out of the way, and your bank will accept your documentation, GIVE US A CALL, we'll help you with the compliance paperwork 100%.

New Paycheck Protection Program (PPP) guidance declares that PPP recipients can apply for loan forgiveness early but that doing so could cost them money.