The Small Business Tax Help Blog

Archive for July, 2008

Question: Need to find their EIN Online!?

I am having issues with my return- I want to file now, but I dont have the EIN for one of my employers due to not having the w2 yet. I’ve tried to talk to them and get it, but the person who handles the accounting is on vacation. Is there any way for me to look up the EIN Online? I know that legally they have to have the w2’s postmarked by 31 jan, but we’re talking about actuality here.
I have “waited” this long NOT BY CHOICE. Its not my fault that the stupid company only has one person that has this information.

Answer: No there's noplace where you can find the EIN's online. You waited this long - wait until you either get your W-2 or can talk to the accounting person. If you try to file from your paystub you run a risk of ending up having to file an amended return.

The Nonprofit Option

Looking to start a nonprofit business? This guide will get you started.

Final prayers: ein kelohenu, alenu, adon olam sung Jewu 232 Rabbi Jonathan Ginsburg www.jewu.info

Question: should they be withholding federal tax?

about a month ago I discovered that Federal Tax isn’t being withheld from my paychecks. I`m an hourly employee, paid bi-weekly. As of 12/21/07 I have made $4,034.21 before tax deductions (Medicare and SSI) Year to date. I`ve paid $308.60 of that for Medicare and SSI YTD. I`ve asked my superviser to look into it, but just to get him to not schedule me on days that I have NEVER been available to work took a month of constant remiding. So it’s pretty much safe to say that it’s gonna take him a while before he remembers to look into it.

My question is this; Shouldn’t Federal Tax be deducted from each check? I`ve always filled out my W4s the same, and I`ve never had any problems before, so what could the problem be? I`ve heard that if you don’t make a certain amount they don’t take out Federal Tax, but I`ve found no info on what that amount is. I`ve checked a Federal Tax Withholding calculator from the IRS website. it says’ $0. is this correct? am I worrying over nothing?

Answer: If that's your only job, you aren't making enough to owe any federal income tax. That's why they aren't taking any out. If you have had other jobs also this year, you could end up owing something, but your current job doesn't know that.

If it's your only job, then yes you are worrying about nothing.

Stimulus Package 'Making Work Pay' Credit May Lead to Bigger Tax Bills This Year

The small increase in take-home pay that began in April 2009 through the Making Work Pay Credit could mean an unexpected bump in your tax bill says Cheryl Block, tax law expert and professor of law at Washington University. The problem, according to Block, is that the Treasury Department's new withholding tables do not take several individual employment circumstances into account. Some joint ...

IRS-Deductions.org A Tax Deduction Guide To Reduce ...

Question: Would we qualify for the earned income tax credit this year 09?

My husband and I file married filing jointly. We have 6 children and had a decrease in my income for 2009 by 1/2 of what I made last year. Would we qualify for the EITC? Our income currently is around 35,000.

Answer: If any of those children are under 19 (or under 24 and in school), yes. Not as much as some people will get, but yes.

If any of the children are under the age of 17, they qualify you for the additional child tax credit. At income of $35000, you could be eligible for the credit on 4-5 of the children.

In higher income years, the child tax credit of $1000 reduces your tax bill. This year your tax bill is $0, so the $1000 moves to the Additional Child Tax Credit, which like EIC is refundable.

Adidas Q4 net income falls 64 pct to $26M

German sportswear company Adidas AG said Wednesday its fourth quarter net income declined 64 percent to euro19 million ($26 million) on rising purchasing costs, currency effects and a drop in demand during the downturn. The Herzogenaurach-based company earned... Adidas - Programming - Sportswear - Adidas AG - Logo

Earned Income Credit in 2009, 2010

Question: Debit columns and General Journal?

On a worksheet, the debit column of the income statement totals 550,356 and the credit column totals 734,225. This represents:
a. a net income for the business
b. a net loss for the business
c. erors in the worksheet
d. other expenses.

At the end of the accounting period, the correct entry in the general journal to adjust for beginning inventory is to:
a. debit purchases and credit sales
b. debit income summary and credit merchandise inventory
c. debit merchandise inventory and credit income summary
d. debit purchases and credit merchandise inventory

At the end of the accounting period , the correct entry in the general journal to adjust for the ending inventory is to:
a. debit purchases and credit sales
b. debit income summary and credit merchandise inventory
c. debit merchandise inventory and credit income summary
d. debit purchases and credit merchandise inventory

Can someone please help me with these I am really stumped on these 3 questions

Answer: On a worksheet, the debit column of the income statement totals 550,356 and the credit column totals 734,225. This represents:
a. a net income for the business

On your income statement, you have revenue accounts and expense accounts. Revenue accounts normally have a credit balance. Expense accounts normally have a debit balance. So if your revenues, which are in your credit column, are greater than your expenses n the debit column, you have net income for the period.

At the end of the accounting period, the correct entry in the general journal to adjust for beginning inventory is to:
*** At the end of an accounting period, the BEGINNING inventory for the month should already be correct because it should have been adjusted at the closing of the prior month.
Example: You sell the famous widget. On December 31, you do an inventory and count 600 widgets. You know you paid $1 each for them. So on your books for December 31, you will have an asset account on your balance sheet, called "Inventory" and it will have a debit balance of $600.

When you close your December books and open your January books, that $600 in Inventory carries forward. So on January 1, you had $600 in inventory, and this is what your books already show simply from doing your December closing.

Your next adjustment of your inventory account will come at the end of January, when you will adjust inventory again to reflect ONLY JANUARY activity. At the end of the month, you adjust inventory for the END of that month, not for the beginning of the month. You already did the beginning.

Do these questions go along with actual entries that you had to write up and then prepare statements?

At the end of the accounting period , the correct entry in the general journal to adjust for the ending inventory is to:
This question also - are there actual entries related to the question? Because which entry you write will be determined by your numbers, and whether your inventory has increased, decreased, or stayed the same for the month.

Going back to above: Dec. 31, you have 600 widgets and you paid $1 each, so Dec. 31 balance sheet shows $600 debit balance in asset "Inventory."

On January 10, you receive invoice for 2000 more widgets that just arrived, again at $1 each. This entry is a debit to Purchases account (on income statement) and credit to Accounts Payable liability. You pay the invoice on Jan. 20, which debits Accounts Payable and credits Cash.

Purchases debit $2,000
. . . . Accounts Payable . . . . credit ($2,000)

Accounts Payable debit $2,000
. . . . Cash . . . . . . . . . . . . . .credit ($2,000)

On Jan. 25, you sell 945 widgets for $3.50 each. You will debit Accounts Receivable for $3,307.50 and credit Sales for $3,307.50.

On January 31, you count your widgets. You started with 600, bought 2000, and sold 945. You should have 1,655 widgets left. Now you adjust your Purchases, Inventory, and Cost of Goods accounts like this:

Inventory. . . . . . . . . . . . .debit $1,055
Cost of Goods Sold . . . . .debit . $945
. . . . . . Purchases . . . . . . . . . . .. . . . credit (2,000)

Now your Purchases account is back to zero. Your cost of goods is $945, which is what those 945 widgets cost you. And your inventory account show the $600 you started with plus the $1055 left from that new batch, which totals the $1,655 that your inventory count said you would have.

In my example, we DEBITED Inventory and CREDITED purchases at the end of the month - the exact opposite of answer D - because we bought more inventory during the month than we sold. Our inventory increased.

Now say we only bought 400 more widgets instead of 2000.
Debit Purchases for 400
Credit Accounts Payable for 400
When paid, Debit Accounts Payable for 400
Credit Cash for 400

We still sell 945, so we still debit Accounts Receivable and credit Sales for $3,307.50.

At the end of the month, we only have 55 widgets left. Our inventory has gone DOWN. So this time,

Cost of Goods Sold . . . . .debit . $945
. . . . . . Inventory. . . . . . . . . . . .. . . . credit ($545)
. . . . . . Purchases . . . . . . . . . . .. . . . credit ($400)

Purchases gets credited for the $400 we spent, to get it set back to zero. We still sold 945 at $1 each, so COGS is still a debit of $945. But our original 600 widgets increased by 400 and then decreased by 945, leaving us with 55. The difference between the 600 we started with and the 55 we ended with is 545 widgets, at $1 each. So inventory gets a credit of $545 to decrease the value to match inventory on hand.

I hope seeing some actual numbers helps you understand why I'm asking if the questions relate to a problem that had specific numbers or journal entries, because you can't just issue a blanket statement that "inventory is ALWAYS credited at the end of a month" because it isn't, not always.

In the sources below, I've put some links to some online

Gift tax has limits depending on relation

Knoxville-area accountants are offering advice through our Tax Tips columns, which will appear each Saturday in the Business section through the April 15 IRS deadline. This week, Knoxville CPA Janice Smith answers readers' questions. If you have a tax-related question you would like answered, e-mail it to news@knoxvillebiz.com or write to the News Sentinel, Attention ...

Mileage Report and Vehicle Reporting Spreadsheet Form

Self-employment tax changes for 2009

Prior to preparing 2009 tax forms, the self-employed and micro-businesses (fewer than 10 employees) should be aware of a few tax law changes, including changes in the standard mileage rate and the self-employment tax.

Maria Shriver EITC Initiative