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tax preparation Irvine

Irvine Tax Preparation Accountant Reports ‘The Top Reasons To Not Keep Secrets From Your Accountant’

–“Not telling your accountant everything about your finances is somewhat like not telling your doctor everything about your health,” said Robert Borish, CPA and tax preparer in Irvine. “Your accountant can’t file accurate tax returns without accurate information.”

Although filing an inaccurate tax return may not be as life-threatening as your doctor not having a complete health picture, it can certainly be life-changing. The repercussions from tax returns containing wrong or missing information can include: reduced refunds, audits; penalties for late payments, negligence, and fraud; interest on unpaid back taxes; joint liability and even tax evasion charges.

Neither the Internal Revenue Service nor the Franchise Tax Board cares that you may have simply forgotten to declare income and other earnings. Nor do they care that you forgot to take all of the deductions to which you are entitled.

The reasons people withhold information from their accountants aren’t necessarily with illegal intent. Many times it is simply because they don’t realize they are missing out on deductions, or they just forget. Some of the top overlooked matters that your accountant needs to know about include:

  • Changes to family or marital status: Getting divorced, separated and married affect your taxes. Having a new baby, adopting, a child turning 18 or going to college affects your taxes. Taking care of elderly parents or a disabled child or adult affects your taxes.
  • Income or loss from a lawsuit: Although settlements from a lawsuit are rarely taxable, there can be aspects of the settlement that might be. Certain business expenses that are part of a business lawsuit may be deductible.
  • Overseas investments, bank accounts, and other assets: Bank accounts, investments, real property and other assets that are held in other countries must be reported. Failing to disclose foreign assets can result in large fines and possible criminal charges.
  • Failure to file tax returns for prior years: The longer you wait to file, the more trouble is brewing. Your accountant can help you file past returns so that interest and penalties stop piling up. If you owe for past years, your accountant can help you get a payment plan.
  • Failing to mention income, such as gambling income or a side business not only creates fines and penalties, it might deprive you of legitimate deductions that are to your benefit. Some people don’t disclose tip income to their accountant, thinking that tips are not taxable if they don’t appear on the W-2 form. However, the IRS requires people who earn tips to keep a daily record and report tips as income.
  • Paying personal expenses from a business account does not mean those expenses are automatically “business deductions.” Tell your accountant if you have used business funds to pay for personal expenses so proper adjustments can be made.
  • Paying people “under the table” is not doing anyone any favors. Doing so can come back to haunt you. Not paying wages in an appropriate manner, or failing to keep accurate records of contracted services can result in audits and penalties for everyone involved. Your accountant has the expertise to make sure you meet all of the payroll obligations and record all business-related expenses, including those for business-related services such as janitorial and professional services.
  • Not paying taxes, for any reason: Tax agents don’t look favorably on those who miss estimated payments or don’t pay their taxes. Tell your accountant when you have missed payments or haven’t paid. Life happens and unexpected medical expenses, business downturns, debt, even being the victim of embezzlement can cause people to feel they have to skip tax payments in order to take care of emergencies. Your accountant can help you negotiate payments so you can get caught up. In some cases, you may qualify for a penalty waiver.

The more your accountant knows about your finances the better for you. Even matters that don’t seem important can be. Let your accountant determine what is relevant. Your account is obligated to file accurate tax returns on your behalf, but is also obligated to confidentiality and does not disclose personal information about you or your business that is not related to accurate tax returns.

Robert Borish, CPA can help with tax-related issues, establishing business and personal accounting processes, payroll, tax planning, business planning, and more. Contact Robert Borish in the Irvine tax preparation offices for an appointment.

Robert Borish, CPA, Inc.
6 Venture #120
Irvine, CA 92618
(949) 951-5002


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Irvine tax preparation

Irvine Tax Preparation Accountant Announces ‘The Top Accounting Strategies For New Businesses’

–All businesses run on creative ideas, energy, and finances and too often, new business owners put good accounting practices on the back burner when they are focusing the creative processes. Robert Borish, CPA and tax preparer in Irvine said, “It’s important for new business owners to take the time to establish accounting practices and strategies that are easy to manage in the beginning and that will grow with the business.”

Taking the time right away to start following solid accounting practices saves headaches at tax time, makes managing growth easier, means projections are more accurate and helps avoid underfinancing, which is one of the leading causes of business failure.

The leading tips to help new business owners start off with the right accounting practices are:

  • Dedicate a day and time every week to record financial activity, receipts, invoicing, bills and credit card and banking activity. Sticking to the time you’ve set aside prevents a backlog.
  • Automate accounting and hire a professional accounting service: Accounting software is a great tool for keeping track of receipts, bills, bank accounts and other financial information. Working with a professional accounting service, especially one that provides online accounting services is an excellent platform for getting the most from accounting software. Accounting firms like Robert Borish, CPA, Inc. not only provide online services, but also help small business owners set up Quickbooks, the leading accounting software platform, and train them to use it.
  • Hiring a professional accounting service allows you to focus on managing and growing your business and reduces your start-up overhead. A professional service eliminates the need to hire additional employees for bookkeeping, accounting and payroll so the start-up business can direct resources to other critical resources.
  • Separate personal and business expenses: When starting out, the temptation to mingle business and personal finances might be tempting just for convenience, but it can create more problems than it solves; especially where taxes are concerned. This is not to say that some business owners cannot benefit personally from some business expenses. This depends on what kind of business entity was established when you set up your business. Even then, it is best to have separate personal and business bank accounts and credit cards. If you are contributing capital to your new business from personal assets, make sure those contributions are clearly documented. Likewise, if your business reimburses you for out-of-pocket business expenses, make those reimbursements are clearly documented.
  • Track every business expense and keep accurate records of expenditures, payroll and labor costs, inventory, invoices, accounts payable, vehicle expenses, rent and utilities, insurance. In short, keep a record of everything.
  • Accurately record business income as it is received. Record daily sales receipts and any other payments to your business.
  • Creating financial projections helps you track the state of business at any given moment. Projection reports can identify upcoming expenses that you need to prepare for, help you accurately measure growth so you can meet growing demands for your product or service without overextending, and help you forecast business downturns that might be on the horizon so you can prepare for them. Projections also help give you realistic growth goals.

There are no shortages of details to consider when operating a new business. Getting control over the accounting practices right in the beginning is critical to how your business operates going forward. It might seem easier and more economical to keep your own books in the beginning but as your business grows and as tax time approaches, you might start feeling overwhelmed.

Even if you are going to keep your own books temporarily, meet with an accountant for the proper guidance and retain an accountant to periodically audit your books and prepare your taxes. The benefits are going to far outweigh the expense.

Robert Borish, CPA can create customized solutions for your business. Services include tax preparation, payroll processing, bookkeeping, accounting and even Quickbooks classes for current clients. Contact Robert Borish for business strategies and tax preparation at the Irvine office.

Robert Borish, CPA, Inc.
6 Venture #120
Irvine , CA 92618
(949) 951-5002

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taxes Irvine

Robert Borish, Certified Public Accountant And Irvine Tax Expert Reports Tips For Streamlining Payroll

–Timely and accurate payroll and tax filings are often rated the highest headaches for businesses. Robert Borish, CPA and an Irvine tax expert has some tips that can help businesses get the payroll headache under control.

Even small business owners with only a few employees complain about getting payroll out accurately and on time. Employees being late with time cards, questioning expected overtime pay or vacation time are some of the more common issues. Multiply these issues by 50 or more employees working for larger companies and it’s easy to see where the headaches come from. Add on the demand for accurate and timely tax reporting and the jokes about buying stock in an aspirin company are no longer funny.

Businesses have to file and pay income tax, local and state taxes, and payroll taxes, along with paying employees. Even though the Irvine tax expert can help with any tax issues, the topic here is streamlining payroll so that employees and payroll taxes are processed accurately and on time.

Here are the guidelines that help streamline payroll:

  • Know the laws
  • Keep accurate records
  • Establish written payroll procedures
  • Automate payroll
  • Ask the expert

Know the laws

Laws overseeing payroll and payroll deductions include establishing regular pay periods, record keeping, how hourly and salaried pay is processed, how overtime and commissions are calculated and paid, how vacation time, sick time, or personal time is allocated and managed, and how and when payroll taxes are deducted and paid.

Knowing these laws, and keeping up with any changes, is going to help the payroll process run smoothly and avoid any possible legal issues from disgruntled employees or the government.

Keep accurate records

Keep accurate employee records including the original employment application, the offer letter, rate of pay, benefits, time cards and payroll detail, anything bearing the employee’s signature, and even awards and disciplinary records. Payroll is one of those cases where there is no such thing as too much information.

Establish written payroll procedures

Not only is it important to pay employees on time, it is the law. No one needs be caught between an upset employee and the local labor board. Regular pay periods are required so be sure they are established and that the employees know the payroll cycle.

Labor laws put the responsibility of accurate payroll on the shoulders of the employer, but we all know that problems come up.

Timecards that are not turned in on time, or hours that are not approved can mean that someone may not be paid accurately.

Employees and supervisors need to know the payroll cycle. When are they getting paid? When do their hours have to be submitted and approved? When do pay periods start and end?

What are the consequences if hours are not turned in on time? Employees have to be paid their base pay on time, however a delay in reporting overtime might mean that overtime or commissions might not be included on the regular paycheck.

When everyone, including those responsible for processing payroll, know what the procedures are the chances of problems are reduced.

Automate payroll

Automated payroll saves time and stress even for only a few employees. With the payroll service offered by Robert Borish, CPA you will enjoy these time saving benefits:

  • Direct deposit available, this means no longer writing payroll checks.
  • Payroll tax payments are made electronically, automatically (you will be notified in advance).
  • Payroll data can be downloaded into Quickbooks. If you utilize the Borish cloud service for Quickbooks, this will be performed automatically.

Considering the record-keeping requirements, the time involved, and the risk of errors, it is less expensive for small businesses to hire a payroll service, or install accounting software, than it is to try to write and keep track of your payroll.

Ask the expert

Don’t hesitate to talk to a payroll and tax expert. Contact the Irvine tax and payroll professionals for help with setting up a payroll process or troubleshooting an existing system.

Robert Borish CPA, Inc.
6 Venture #120
Irvine, CA 92618
(949) 951-5002 x101

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Individual Shared Responsibility Provision

The Affordable Care Act includes the individual shared responsibility provision that requires you, your spouse, and your dependents to have qualifying health insurance for the entire year, report a health coverage exemption, or make a payment when you file.

Who is subject to this provision?

All U.S. citizens living in the United States, including children, senior citizens, permanent residents and all foreign nationals are subject to the individual shared responsibility provision.

Children are subject to the individual shared responsibility provision.

  • Each child must have minimum essential coverage or qualify for an exemption for each month in the calendar year. Otherwise, the adult or married couple who can claim the child as a dependent for federal income tax purposes will generally owe a shared responsibility payment for the child.

Senior citizens are subject to the individual shared responsibility provision.

  • Both Medicare Part A and Medicare Part C (also known as Medicare Advantage) qualify as minimum essential coverage.

All permanent residents and all foreign nationals who are in the United States long enough during a calendar year to qualify as resident aliens for tax purposes are subject to the individual shared responsibility provision.

  • Foreign nationals who live in the United States for a short enough period that they do not become resident aliens for federal income tax purposes are not subject to the individual shared responsibility payment even though they may have to file a U.S. income tax return.
  • Individuals who are not U.S. citizens or nationals and are not lawfully present in the United States are exempt from the individual shared responsibility provision. For this purpose, an immigrant with Deferred Action for Childhood Arrivals status is considered not lawfully present and therefore, is eligible for this exemption even if he or she has a social security number. Claim coverage exemptions on Form 8965, Health Coverage Exemptions.
  • U.S. citizens living abroad are subject to the individual shared responsibility provision.
  • However, U.S. citizens who are not physically present in the United States for at least 330 full days within a 12-month period are treated as having minimum essential coverage for that 12-month period. In addition, U.S. citizens who are bona fide residents of a foreign country or countries for an entire taxable year are treated as having minimum essential coverage for that year.
  • All bona fide residents of the United States territories are treated by law as having minimum essential coverage.

Please call if you have any questions or need more information.

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Health Care Law

If you haven’t signed up for health insurance this year, do so now and avoid or reduce any penalty you might be subject to. Depending on your income, you may be able to claim the premium tax credit that reduces your premium payment or reduce your tax obligations, as long as you meet certain requirements. You can choose to get the credit immediately or receive it as a refund when you file your taxes next spring. Please contact the office if you need assistance with this.

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End of year tax planning

Tax planning for the year ahead presents similar challenges to last year due to the unknown fate of the numerous tax extenders that expired at the end of 2014.

These tax extenders, which include the mortgage insurance premium deduction and the sales tax deduction that allows taxpayers to deduct state and local general sales taxes instead of state and local income taxes, may or may not be reauthorized by Congress and made retroactive to the beginning of the year.

In the meantime, let’s take a look at some of the tax strategies that you can use right now, given the current tax situation.

Tax planning strategies for individuals this year include postponing income and accelerating deductions, as well as careful consideration of timing related investments, charitable gifts, and retirement planning.

General tax planning strategies that taxpayers might consider, include the following:

  • Sell any investments on which you have a gain or loss this year. For more on this, see Investment Gains and Losses, below.
  • If you anticipate an increase in taxable income in 2016 and are expecting a bonus at year-end, try to get it before December 31. Keep in mind, however, that contractual bonuses are different, in that they are typically not paid out until the first quarter of the following year. Therefore, any taxes owed on a contractual bonus would not be due until you file a tax return for tax year 2016.
  • Prepay deductible expenses such as charitable contributions and medical expenses this year using a credit card. This strategy works because deductions may be taken based on when the expense was charged on the credit card, not when the bill was paid.For example, if you charge a medical expense in December but pay the bill in January, assuming it’s an eligible medical expense, it can be taken as a deduction on your 2015 tax return.
  • If your company grants stock options, you may want to exercise the option or sell stock acquired by exercise of an option this year if you think your tax bracket will be higher in 2016. Exercise of the option is often but not always a taxable event; sale of the stock is almost always a taxable event.
  • If you’re self-employed, send invoices or bills to clients or customers this year to be paid in full by the end of December.

Caution: Keep an eye on the estimated tax requirements.

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