Economics Finance

There may be no hope for Excel Airways or US banking giant Lehman Brothers, but many struggling small businesses and sole traders could still survive the oncoming recession – all they need is some good business sense and top quality bookkeeping.

Now that the credit crunch is really digging its heels in, there’s no doubt that things are going to get worse before they get better for the majority of British businesspeople. Recent forecasts warn of a winter recession, while a survey of British workers revealed that many are now experiencing sleepless nights over financial concerns.

Whilst lack of sleep may not be an effective way of safeguarding your livelihood, it is also a very bad idea for business people to ignore the problems they are facing. For those who are struggling in the current economic climate, the most important thing is to monitor the progress of their business with effective bookkeeping and to react swiftly to any warning signs.

Here are five reasons why small businesses need to put even more emphasis on bookkeeping during the recession:

1. Monitor and Control Expenses

Now more than ever, it is important to watch the level of expenditure and not to let it get out of control. Regular accounting will tell you how your expenses are running when compared to your targets, and will also allow you to compare monthly income against monthly expenditure. Continue reading ‘Survive the Recession With Better Bookkeeping’ »

Nobody likes to pay taxes and that’s a fact. But taxes are necessary for the state to fulfill its purposes and the IRS is implacable when it comes to collecting. Yet, nobody should pay more than one is obliged to and so, when it comes to calculating the exemptions, benefits and deductions on taxes it is imperative to be trained. As a homeowner you are entitled to many benefits and deductions on taxes that can provide a lot of ease to your finances. Learn what you can deduct, what you cannot and where to turn to if you have any doubts.

Home Loan Interest Tax Deduction

When you take a mortgage loan, the payment for the money owed is the interests on the loan. The interests you pay each year on your mortgage are tax deductible and thus, you can include them on your tax presentations for reducing your tax payments. Bear in mind, however, that there are certain limitations for these deductions, especially when the amounts are significantly high because the administration believes then that your payment capacity is higher and any amounts that surpass certain level are no longer deductible. For more information about this issue, you need to contact a tax advisor or certified public accountant that will be able to evaluate your particular situation. Continue reading ‘Tax Benefits For Homeowners – Seize Them All!’ »

It is a little known fact that the IRS is under a mandate from the Congress to achieve 80% electronic filing by the year 2012. The IRS Restructuring and Reform Act (RRA) was passed in 1998. In the nine years since the enactment of RRA 98, the percentage of individual e-filed returns nearly tripled, from 20 percent in 1998 to about 58 percent in 2007. There has also been steady growth in the number of self-prepared individual returns filed electronically. As the Electronic Tax Administration Advisory Committee (ETAAC) noted in its 2007 e-file report to Congress, this progress is very gratifying as it indicates that e-file is catching on with those who had previously resisted it. As per IRS data, nearly 80 million returns were filed electronically in 2007, out of which about 22.5 million were filed from home computers.

There are major benefits to filing taxes electronically. The IRS tax code is enormously complicated, and it requires considerable patience and skill to navigate the tax code in order to figure out the best possible tax situation for an individual. If one attempted to sit down with the many forms pertaining to one’s tax situation and proceed to accurately fill them out, it could be many days’ work, and even then possibly with unintended errors. This is why trained tax professionals and accountants are in such great demand during the tax season. But for an individual filer, the possibility of e-file is a heaven send. There are many quality internet tax sites managed by tax professionals that make the process of preparing an individual return straightforward and error free. All one needs is an internet connection.

The most important advantage of e-file is that the individual does not have to understand the intricacies of tax code. The rules also change from year to year, and this adds a layer of complexity to an already complex enterprise. The way most internet tax sites work is that one creates a user account with the site with a personal login and a password. The user is then asked a series of simple questions such as age, birthday, marital status, number of children, the kinds of income that the user plans to report, information from W2 forms etc. Thus, for example, the W2 form is replicated on the screen with the possibility of inputting the information exactly as it appears on the W2. Once the user has input all the information asked for by the site, the program calculates the best possible tax situation. All of the relevant information is then input into the appropriate forms and the return is electronically filed with the IRS. Once the return is filed with the IRS, an acknowledgment is usually received from the IRS within a couple of days. If there are no unintended errors, the return is accepted by the IRS. Continue reading ‘The Benefits of Electronically Filing Taxes on the Internet’ »

UBS Financial Services is a global company that provides a full range of financial services to individual clients and companies all over the world. In an increasingly globalized world economy that the kind of international expertise that UBS Financial Services can offer is a distinct advantage to all types of client that need to manage their wealth. UBS offers a service that reflects the global nature of financial markets.

UBS Financial Services has offices on every continent. It operates in Switzerland, the United States, Canada, South America, Europe, the Middle East, Asia and Africa. If even this comprehensive network does not put you near a branch of UBS Financial Services you can use the banking online service. UBS Financial Services online banking offers the convenience of making decisions from the comfort of your own home and provides the same range of wealth management and investment services.

Individual customers can benefit from a complete range of financial services. UBS Financial Services offers annuities,401K plans, securities, mutual funds, fund management, wealth management, life and health insurance programs and trust funds. In addition UBS Financial Services can provide an attorney network, Roth IRA accounts, estate planning, account management, retirement distribution analysis, educational funds and fund management and lines of credit. In other word UBS Financial Services offers all the services you would expect to find in a worldwide financial service. Continue reading ‘UBS Financial Services – What Do They Do?’ »

Preparation of tax returns should be done very cautiously, because the tax payer is responsible for each and every word written on the tax return even though it is prepared by a professional. The preparer should be able to provide you with practical and convenient tips for tax saving.

You can find an efficient tax preparer online only if you put genuine efforts in searching for one.

Check while hiring tax preparer online

There are certain things that one should follow when hiring an individual or a firm for online tax preparation:

* Legally speaking, the professional preparer should sign the returns form in the preparer areas. He/she should furnish the identification number on the return. He or she should give a copy of the return to the tax payer.
* The preparer should be very accurate with filling in your details. Your personal information along with your registration number should be mentioned accurately.
* The tax preparer should be efficient in online accounting.
* Do not sign on blank tax returns form ever and do not use a pencil for signing as the signature can be easily erased and your signature replaced.
* You should present any notices and refund checks that you might have got from your attorney to the tax preparer for preparing the returns.
* Online bookkeeping is something that your tax preparer should be efficient in.
* The tax preparer should be adequately qualified and experienced for his/her job, because each and every word he or she writes in the return from is evaluated by the tax collection authorities, and there is every opportunity of the tax payer being penalized for terms that are vague or seem to be unreliable. Continue reading ‘Online Tax Preparation – Preparing Tax Returns’ »

Equity method accounting is used when an investing company owns stocks of another affiliate company. There are several different ways of accounting for this ownership, but this method is perhaps the most popular.

Equity method accounting factors in the increase or decease in profits of the invested company. These differences are usually unrealized and not actually obtained by the investing company. The increase or decease is, of course, calculated on the percentage of stocks owned and does not account for dividends paid. For example, if an investor owns 100 shares of an affiliate’s stock. And if that stock increases 10%, only those 100 shares will reflect the 10% increase. The investing company will then record that increase as profit on their ledger.

Before going further, it is important to note that if a parent company owns over 50% of a subsidiary company, equity method accounting is not allowed. Consolidated companies are required to combine the financial figures into one statement for the group of entities. Continue reading ‘Equity Method Accounting Makes a Big Difference’ »

The VAT rate in the UK has been reduced, temporarily, in an attempt by the UK government to stimulate the economy and get people spending. Whether or not this will work remains to be seen. However, implementing the change can be tricky – invoices have to be amended, spreadsheets and databases need to be changed, and things can get complicated!

Some people prefer to use the ‘fraction’ to work out VAT. When the VAT rate was 17.5% the fraction was 7/47. Now, the fraction needed is 3/23. This means that the total (VAT inclusive) price is 23 23rds, the VAT amount is 3 23rds, and the NETT price is 20 23rds.

* To add VAT at 15% on to a sale- multiply by 1.15 – Example £50.00 + VAT = £57.50. Alternative, divide by 20 and multiply by 23.
* To calculate how much the VAT will be on a sale, multiply by 0.15 – Example VAT on £50.00 = £7.50. Alternative, divide by 20, multiply by 3.
* To work out the NETT price (price excluding VAT) DIVIDE by 1.15 – Example £57.50 less VAT = £50.00.Or, use the fraction – divide by 23 then multiply by 20
* To work out the amount of VAT on a VAT inclusive price, it is much easier to use the fraction – divide by 23 then multiply by 3. Otherwise, divide by 7.667 to get the VAT amount. Continue reading ‘How to Calculate and Deduct the New VAT Rates’ »

The art of accountancy or accounting, according to official definition, refers to the measurement, statement, or provision of financial data that is mainly used by lenders, managers, investors, tax authorities and other decision makers in making decisions regarding the allocation of resources between and within companies, organizations, and public agencies. Accounting is also defined by some as the art of “classifying, recording, and summarizing in a significant method and in terms of money, the transactions and events which are financial in nature, character, as well as interpreting the results thereof.”

Taxation is a monetary levy imposed on individuals and businesses, primarily to finance the operations of government, as well as raise funds for special programs or projects. Taxation may also be utilized for other major purposes aside from merely raising funds. It could be used to discourage certain activities such as smoking or alcohol consumption and may be a vehicle for transferring wealth from one group to another, like taxing the very rich to spend for welfare programs for the poor. Continue reading ‘Taxation and Accountancy Specialists – The Benefits of Acquiring Their Services’ »

The old saying goes that death and taxes are the only two certainties in life. Maybe so and maybe not. I’m discovering a third certainty in life: most Americans are paying way too much in taxes to Uncle Sam. There are hundreds of tax deductible business expenses for small and home-based businesses that Americans currently overlook.

Did you know that if you have a home-based business and you take certain steps you could qualify for up to $5,000 per year in tax savings? That means that you could either pay Uncle Sam up to $5,000 less up front in quarterly tax payments or withholdings, or you could get a bigger refund on the back end. You just have to know which tax deductible business expenses to look for.

Now $5,000 sounds like a lot of money so how is it possible that so many people don’t know about these deductions? More importantly, why don’t their tax accountants know about these tax deductible business expenses? Continue reading ‘Tax Deductible Business Expenses Even Your Accountant Doesn’t Know About’ »

The Federal Tax Code was written by our friends in Government. Most of whom are business owners or Married to one. It is no surprise that owning a business and more specifically a home-based business entitles one to certain tax advantages. Being able to deduct a portion of your mortgage, rent and other monthly expenses comes with the territory.

This luxury does come with some headaches. Possibly the most frustrating time for independent distributors in a Network Marketing company is the dreaded tax season. All of a sudden an entire year of little or no planning and spotty record keeping by these work at home professionals can catch up to them. The result is a mountain of stress, paperwork and accountant bills.

A possible solution is personal finance software such as Quicken or Microsoft Money. Experience will prove these do little to lesson the blow. Although useful for small to medium sized business, these programs were not designed for a home-based-businesses. Many home business owners find they are too complex, difficult to learn and filled with many features that are not needed. Continue reading ‘Software For Network Marketers Simplifies Tax Time and Record Keeping’ »