PAYROLL TAX DEPOSITS

If you are a semi-weekly federal tax deposit employer and your payroll tax deposit is less than $100,000, your tax deposit is due Friday, January 4, 2019 for any payroll checks dated December 31, 2018. Deposits due on January 4, 2019 must be initiated electronically by Thursday, January 3, 2019 to be considered timely for withdrawal on Friday, January 4, 2019. If your payroll tax deposit is greater than $100,000, it is due the next day after the date of the payroll check. For December 31, 2018 paychecks, you must initiate the payment on Monday, December 31, 2018 to ensure timely withdrawal on Tuesday, January 2, 2019.

UNEMPLOYMENT INSURANCE RATE NOTICE FOR 2019

State unemployment agencies are mailing the notices of the 2019 insurance rates to employers during the months of November and December 2018. 2019 rate information for Nebraska employers is also available online through your UICONNECT account. If our office assists you with the preparation of your payroll tax returns, please forward a copy of the 2019 rate notice to our office. In addition, the state agencies often provide an opportunity to reduce the 2019 insurance rate by making a voluntary contribution. If you would like our assistance in evaluating whether to make the voluntary contribution, please forward the notice to our office as soon as possible as there is a deadline for making this contribution.

EMPLOYEE ADDRESSES AND SOCIAL SECURITY NUMBERS

For the purposes of preparing your 2018 Forms W-2, please review your employee list to be sure you have communicated any name and address changes to our office. If we use your accounting software to prepare your Forms W-2, please review your file to be sure all employee names, addresses, and social security numbers are correct prior to sending the backup or export files.

REMINDER FORMS W-2 DUE DATE

The filing deadline for 2018 Forms W-2 to the Social Security Administration is January 31, regardless if filing on paper or electronically.

2019 PAYROLL CHANGES

There are several important changes which affect the calculation and payment of payroll taxes. Click the button below to view the updates.

If the final couple months of 2018 snuck up on you, it’s not too late to do some tax planning for the current year. It may be time for a refresher on how the Tax Cuts and Jobs Act, passed last December, may affect you and/or your business.

If you’re filing for your own household, remember that:

1. The standard deduction has nearly doubled. All single taxpayers can now claim a $12,000 standard deduction. Married couples filing jointly will see an increase to $24,000. But the personal exemption has been eliminated, which may have an adverse effect for larger families.

2. Taxpayers who itemize will not be able to claim as many deductions. This isn’t as critical because of the increased standard deduction, but if you’re still planning to itemize, you’ll find that some deductions have been eliminated, including investment and tax preparation expenses and unreimbursed employee business expenses.

3. You can still deduct medical expenses if they exceed 7.5 percent of your Adjusted Gross Income (AGI). As far as charitable cash donations go, you’ll be able to deduct up to 60 percent of your AGI (the maximum was previously 50 percent). And if you bought a home after December 15, 2017, you’ll only be allowed to deduct mortgage interest on $750,000 of acquired debt, a reduction of $250,000. Interest on home equity loans is no longer deductible.

4. The deduction for state, personal property, and real estate taxes paid is now limited to $10,000. This change will likely force many taxpayers to use the standard deduction.

5. A bit of good news, the child tax credit has expanded. Taxpayers receive a $2,000 tax credit, of which $1,400 is refundable, for each qualifying child under age 17. The phase-out has also increased significantly, starting at $200,000 for single filers and $400,000 for joint filers.

6. Individual tax rates have been lowered. There are still seven brackets, but they now range from 10-37 percent instead of 10-39.6 percent. The brackets have also widened, meaning taxpayers benefit from lower rates on more dollars of income.

Good News (Mostly) for Businesses

Experts are still unpacking the Tax Cuts and Jobs Act, and some rules for businesses have yet to be clarified thoroughly. Some things are clear, like the drop in the corporate tax rate to a flat 21 percent.

Others are still a little hazy. Owners of sole proprietorships and pass-through entities, like S-corporations and partnerships, will be allowed to deduct 20 percent of their Qualified Business Income (QBI) if taxable income does not exceed $157,500 for single filers or $315,000 for joint filers. Taxpayers who report more than these limits will receive a reduced deduction. Some professions (legal, medical, accounting, and other service businesses) may not be eligible for the 20 percent deduction if taxable income exceeds certain thresholds.

We’re keeping up with everything that could have an impact on your 2018 taxes, whether it’s for personal or business income. We strongly suggest you contact us soon to help determine whether you need to take some action before the end of the year.

There are many reasons why a lot of small businesses don’t create budgets. They are time-consuming, difficult to create, and perhaps the most universal reason, it’s challenging to predict what your income and expenses will be in the future.

If budgeting just seems too futile to you, take heart. There are steps you can take to build a budget that works. Here are some suggestions.

Start with the right mindset

Take your budget seriously, but don’t think of it as an absolutely rigid document that must be followed to the letter (or rather, number). Budgets help you:

• Better understand how you spend money and make money.
• Recognize expense and income patterns.
• Determine where you need improvement.

Tip: Keep your company’s overall mission and individual goals in mind. Does your proposed budget reflect these?

Model your budget based on historical numbers

Starting from scratch can be formidable and discouraging enough to keep you from completing this critical task. Even if your income and expenses fluctuate quite a bit from month to month, using a previous period or year as a model will provide a true representation of how your company actually performs over several months.

If you’re doing your accounting manually, this might be quite a chore. Start thinking about making the transition to QuickBooks in early 2019. If that’s not an option, at least retool your paper organizational scheme so you’re storing things by month.

Tip: Be sure to build in seasonal expenses, for example customer gifts during the holidays.

Make a distinction between what your company needs and what it wants

You could actually create two budgets and include your wish list in one. Work from a budget that contains conservative yet realistic amounts for each line item. You can then see if you have room for a “want.”

Some financial professionals recommend that you minimize your income projections and maximize your expense line items. This tactic forces you to stay realistic.

Tip: Don’t budget yourself to the penny, be sure to leave incomes as the end result.

Prioritize and be as detailed as possible

You’ve probably had to do this with your personal household budget. Your monthly fixed expenses come first, and you make decisions about the rest based on what’s left. This is a good way to motivate yourself when you’re staring at a blank piece of paper or spreadsheet.

Try to break major categories down into smaller, more specific sub-categories, but don’t overdo it. 

Tip: Does your business work from a Chart of Accounts? Look to that for help with organization and comprehensiveness.

Use technology

There are standalone budgeting applications available, but you would be able to work with your own company’s income and expense data if you use QuickBooks. The software contains special tools that make it easier to both create budgets and revisit them for periodic tweaking.

Tip: Let us help you get set up with QuickBooks. We know the software and we know small businesses and their budget needs. Contact us for a consultation.

Are you still using paper timecards to create paychecks and paper invoices to bill customers for time-based services? If so, you’re doing unnecessary data entry and risking the loss of billable time. QuickBooks solves both problems with its time-and-billing features. These features let you:

• Enter service hours one block at a time.
• Enter service hours directly on a timesheet.
• Transfer employee hours worked to payroll.
• Mark time-based activities as billable.
• Make billable hours available when you’re creating invoices.

Creating Individual Time Entries

The mechanics of recording blocks of billable time are fairly simple. Click the Enter Time icon on QuickBooks’ home page, then click Time/Enter Single Activity. In the window that opens, you’ll either select from lists of existing data or click <Add New> to complete these fields:

• The DATE the service was provided.
• The NAME of the employee who provided the service.
• The CUSTOMER:JOB.
• The SERVICE ITEM.
• The job’s DURATION (either by using the timer or entering it manually).
• The PAYROLL ITEM and WC CODE (Workers’ Compensation).

Finally, if a customer will be billed for this block of time, click in the box next to Billable in the upper right. When you’re finished, click save and close or save and new.

Weekly Timesheets

If you have multiple time entries to record, you can enter them on a timesheet by clicking Enter Time on QuickBooks’ home page and selecting Use Weekly Timesheet. This graphical table contains columns for all the fields available in the Single Activity window.

In fact, if you’ve already created a service record for a specific employee, that information will appear in the timesheet when you select the employee’s name and the applicable work week. Further, you’ll be able to view anything you enter on the timesheet as an individual record by clicking Edit Single Activity in the timesheet’s toolbar.

Transferring Time to Invoices

QuickBooks makes it easy to bill customers for services you or your employees have provided. Once you’ve recorded a time entry and marked it as Billable, it will be available the next time you create an invoice for that customer.

As soon as you open an invoice form and select the CUSTOMER:JOB, a small window will open labeled Billable Time/Costs. A message will be generated notifying you there are outstanding billable time items and/or costs for that customer or job. You select to have these items either automatically transferred to the invoice or excluded.

Simple, But Not

QuickBooks’ time-tracking features are easy enough to use, but you’re dealing with two critical elements of your accounting system which include payroll and customer billing. Both have to be exactly right. If you’re planning to transfer time entries to both, our Outsourced Accounting team can assist you. We can even manage all your payroll tasks if you’d like, as well as other elements of your company’s accounting. Contact us, and we’ll see how we can best meet your needs.

Sending an invoice for products or services is one of your more pleasant accounting tasks. If only your customers were as eager to pay them.

There are numerous ways to improve the income element of your cash flow equation. One of the easiest is the regular use of statements, reports you send to customers who have past-due balances.  QuickBooks simplifies this task; it contains a statement template you can customize to meet your needs.

A Simple Process

Click Statements on the home page or open the Customers menu and select Create Statements. Everything you need is displayed in the window that opens.

First, verify the Statement Date is correct. Next, select from two options to define the Statement Period. Do you want it to cover a specific date range? Or, would you rather the statements go only to customers who currently have unpaid balances? You can specify the cutoff (for example, 30 days past the original due date).

Who should receive a statement?

• All customers who fit the criteria you just defined?
• Only one customer or several you select from the list provided?
• Customers of a certain type (like residential or commercial)?
• Customers who have a preferred method of receiving communications from you?

The latter two are less common.

If you want to see a list of the customers who will receive a statement, click View Selected Customers.

More Options

The entries in the vertical pane on the right help you shape the actual content of your statements. First is the option to change your template. QuickBooks comes equipped with the Intuit Standard Statement, but you can modify both its fields and its layout and add your company’s logo by clicking the Customize button. If you haven’t worked with customized forms in QuickBooks, let us help.

By default, QuickBooks prepares one statement per customer. If you’d like to change to one job per customer, click on the drop-down list in the next line.

There are several other options in this pane you can turn on or off by clicking in the box next to each. For example, you can indicate you don’t want statements created for customers who have a zero balance or a balance of less than a dollar amount you enter.

Clicking on Preview opens a new page to display every statement that will go out, each labeled with the recipient’s name, address, and activity for the specified period. Navigation buttons help you move through the documents quickly if there’s more than one.

There’s another button here that you can ignore unless you’ve set up finance charges in QuickBooks, which we recommend you don’t take on without assistance. As QuickBooks experts, we would be happy to help with that tool or any other element of your company’s accounting. So, contact us at your convenience.

When a major corporation that has data of several hundred thousand customers suffers a data breach, it’s big news. But no business is too small to get hacked. In fact, smaller companies are sometimes considered easy prey because thieves think they’re not as well-protected as industry giants.

It’s much easier to prevent data theft or destruction than it is to recover from it. Here are some of the steps you can take.

1. Bring in a security expert for a company session.

Make it mandatory for employees. Sometimes it takes an outsider with professional credentials and a supply of horror stories to encourage staff to take this critical topic seriously. Your security professional should emphasize how dangerous seemingly innocuous tools like email and web browsers can be.

2. Keep all local software and web applications updated.

Yes, it’s a pain, and it takes valuable work time. But updates of operating systems, web browsers and productivity solutions are about more than new features and bug fixes. They can build in solutions for security issues that have been discovered and repaired.

3. Be vigilant about network security.

As you know, your computer network is only as strong as its weakest link. If an employee clicks on an attachment that contains a virus or otherwise compromises his or her PC, it may affect others on the network. So:

• Look at monitoring software. There are applications that will keep a close watch on your network operations and let you know if problems crop up.
• Consider hiring a specialist. You don’t need to have a full-time IT staff person to staff safe. Managed IT firms provide important services
• Create a policy for non-work-related web browsing and email use. There is network software you can customize to keep employees from straying off approved areas of the web. Make it clear there are consequences to infecting your company’s computers.

4. Protect everything.

Your local software may be particularly vulnerable, especially if it reaches out to the web for some functions. Ask your financial adviser to recommend the best anti-malware and virus protection solutions, and read reviews written by trusted sources. This is not as area where you should comparison-shop by price. If employees are interacting at all with your office network via mobile devices, make sure they’re protected, too.

5. Be aware that internal data theft and other malicious activity can occur.

You shouldn’t apologize for doing stringent background checks before you hire staff and for implementing in-house security policies. Data breaches are becoming a common occurrence.

Because you’re charged with protecting the financial data of your company and its customers, you must take exceptional security measures. Let us know if you want to explore our outsourced IT services or any other aspect of financial management.