Does your chart of accounts reflect your current business operations? If you haven't revised your chart of accounts since you initially set it up, you may be missing out on an easy way to simplify your business's financial life. That's because your chart of accounts is more than a basic bookkeeping tool. Your chart can also help you keep track of items that affect your tax return.

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For example, your business income may have multiple sources, including the sale of goods and services to customers, rents, royalties, interest, dividends, gains from the sale of business and investment assets, and "miscellaneous" receipts. These different types of income are treated differently under federal income tax rules and appear in different places on your return. Arranging your income accounts for tax-specific categories can streamline tax preparation time and reduce misstatements.

Expense accounts can benefit from organization too. For instance, you'll want to separate allowable deductions, such as ordinary and necessary business costs, from expenditures that produce benefits in future taxable years, such as equipment. That keeps your depreciation schedule current, highlights assets you've purchased and disposed of, and ensures proper reporting on federal, state, and local returns.

In addition, some income tax deductions are based on specific business income and the related costs. The domestic production activities deduction is an example. Calculating this tax benefit requires separating income and expenses attributable to certain qualifying activities such as real property construction. Setting up your chart of accounts to capture the necessary information is a year-end time saver.

Nondeductible expenses are another category that can benefit from tax-specific accounts. Those include dividends paid to shareholders, expenses associated with tax-exempt income, certain entertainment costs, and penalties and fines.
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Organizing your chart of accounts to accurately track business events that affect your taxes can be cost-effective. Contact us for tips on the best way to get the most benefit.

"Tax Tips" are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain.Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Online Advisor Newsletters, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720

June is the end of the second quarter, and you're no doubt gearing up for next month's due date for your federal payroll tax returns. But you may also need to complete one task before the end of June: securing your eligibility to claim the Work Opportunity Tax Credit. Here are the details, as well as other current payroll news.

• Work Opportunity Tax Credit. You can claim this federal tax credit when you hire employees who are members of "target" groups. Normally, you have 28 days after an eligible worker's first day to complete the necessary paperwork for the credit. But the 28-day rule has been extended for some new workers hired between January 1, 2015, and May 31, 2016. For certain employees hired within that time period, the deadline for filing the required form is June 29, 2016. The extended date gives you a chance to review your personnel files for credit-eligible employees.

• Employee leasing. Do you outsource your payroll management tasks to a Professional Employer Organization (PEO)? If so, you may have been concerned about reports that some of these companies failed to send the required payroll taxes to the IRS, leaving employers on the hook for unpaid taxes. A voluntary certification program implemented by the IRS may help ease your concern. Hiring a PEO that's certified under the new rules shifts the liability for failing to remit payroll taxes to the PEO.

• Incorrect payroll notices. If you were confused by the changes to April due dates caused by various federal and state holidays, take heart. The IRS was confused, too. As a result, some payroll deposits that were made correctly on April 18 (instead of April 15) were flagged as late, and the IRS issued penalty notices. You can hold off replying to the notice. The IRS will let you know when the mistake is corrected.

​"Tax Tips" are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain.Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Online Advisor Newsletters, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720

Remember that purchase you made online — the one you didn't have to pay sales tax on? Guess what? In most cases, you were supposed to pay the tax yourself, at the same rate as your state's sales tax. These consumer-assessed taxes are called "use" taxes, and they typically apply when you or your business make a purchase from an out-of-state seller that is not required to collect sales tax in your state. If the seller does not collect the tax from you, and the purchase is otherwise taxable, you're responsible for remitting use tax to the state. The idea is to keep in-state businesses from suffering a competitive disadvantage against out-of-state rivals.
The result? If your state has a use tax, you generally owe the tax on most items you buy out of state and bring in state. The tax applies to purchases both large and small, and sometimes even to items such as magazine subscriptions. In practice, states have had difficulty tracking purchases and collecting use taxes from individuals. Businesses are required to report use taxes on their sales tax returns and are audited to check compliance.
However, as states seek to collect more taxes without raising rates, enforcement of use tax laws could increase. Some states require you to report the use taxes you owe on your personal state tax return. Others may have reporting arrangements with neighboring states to track purchases, or they may monitor deliveries coming across state lines.
Failing to pay means you could be liable for penalties and interest in addition to the unpaid tax. If you think the use tax applies to you, contact our office for information about filing requirements.

"Tax Tips" are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain.Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Online Advisor Newsletters, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720