Essential Financial Services for Business

Payroll News : Lawmakers in showdown over payroll tax cuts

2011-12-13T21:03:00.002-05:00

Despite public confidence in the U.S. Congress plunging to record lows, Democrats and Republicans have shown little inclination to end the political brinkmanship that has gridlocked Congress and alarmed investors.

Furthermore Republicans have been split over extending the payroll tax cut, with many rank-and-file members skeptical that it has created jobs. Republican leaders, however, fear a backlash from voters in 2012 if the tax cut is allowed to expire.

Additional FYI: Without an extension, the payroll tax would revert to 6.2 percent from its current rate of 4.2 percent, resulting in an average increase of $1,000 per family for 160 million Americans.

READ MORE about this at YAHOO! News, supplied by REUTERS
READ MORE about this at USA TODAY!

U.S. Rep. Jeff Landry (R-LA) holds a sign during U.S. President Barack Obama's address before a joint session : DRILLING = JOBS. Click here to view image.

Payroll Taxes and Your Business

2011-10-11T14:49:00.006-04:00

Many small businesses fall behind
in paying taxes at some
point during their existence.

Payroll taxes are all taxes that are collected, by federal, state, and local governments, based on salaries and wages paid to employees. These taxes must be withheld from wages by all businesses that have employees. These taxes are remitted on a monthly or semi-weekly basis, depending on the quantity owed. Businesses are also required to make regularly scheduled reports to the Internal Revenue Service (IRS) and to state and local taxing agencies about the amount of taxes owed and paid. Businesses are not required to withhold payroll taxes on wages paid to independent contractors. Self-employed persons are responsible for paying their own payroll or income taxes directly to the appropriate taxing entity.

Many small businesses fall behind in paying these taxes or filing the associated reports at some time during their existence. Such an error is, however, very costly because significant interest and penalties apply for late payment or nonpayment of payroll taxes. In fact, the Trust Fund Recovery Penalty allows the IRS to hold a small business owner or accountant personally liable for 100 percent of the amount owed, even in cases where the business has gone bankrupt.

READ MORE from Inc.com
Inc.com
Business Taxes
Tax Withholding
Electronic Tax Filing
Tax Preparation Software

Purchasing QuickBooks
products through
GBC, will qualify for an
significant discount.

GBC Offers Quickbooks Support

We offer QuickBooks support and consulting at various levels for clients who want to use QuickBooks. We start by assisting clients in determining the QuickBooks edition that serves their financial recordkeeping and operations best.

Purchasing QuickBooks through GBC Services, clients can realize discounts of up to 50%.

READ MORE AT GBC

Jobs Plan Includes Tax Breaks for Small Firms

2011-10-07T14:07:00.000-04:00

Tax breaks account for $253 billion
of the president's package.

President Barack Obama outlined a $447 billion jobs plan Thursday night that would reduce payroll taxes for workers and small businesses.

The plan also would eliminate payroll taxes for businesses that hire additional employees or increase wages for current workers. The president also wants to give a $4,000 tax credit to businesses that hire workers who have been unemployed for six months or more.

The plan, delivered to a joint session of Congress, also calls for extending into 2012 a current tax break that allows small businesses to immediately write off 100 percent of their investments in new equipment. The president also wants to give a tax break to businesses that hire unemployed veterans.

READ MORE: Obama's Job Plan Includes Tax breaks for Small Firms

GBC Services can help you
organize tax information
including federal and state tax.

GBC Services in Atlanta Georgia can supply you with online payroll processing and help you organize tax information including the filing of tax returns, both state and federal.

Our expansive payroll services also include new hire and workers compensation reporting, customized payroll reports and time sheet submission via phone, fax or email. GBC Services in Atlanta can also set up a time clock interface as well as direct deposit to help you keep track of employee itineraries and payment. READ MORE: GBC Payroll Services

The Benefits of Payroll Services

2011-10-05T13:21:00.003-04:00

Hiring a payroll processing
company let's you run
your business effectively.

There are numerous benefits to hiring an accounting firm offering payroll services in Atlanta that many small businesses may not be aware of. While on the surface it appears that doing payroll, taxes and other accounting-related services yourself saves money, in reality, this simply may not be the case.

If a good portion of your day is spent taking care of time-consuming enterprises like bookkeeping, ledger balancing, and employee worksheet maintenance........

READ MORE > GBC Payroll Processing Services Website
For All Your Accounting Needs Call GBC > 678-366-9232

The Importance of Hiring An Accounting Firm for Small Businesses

2011-10-01T14:00:00.003-04:00

A high-quality accounting
firm will address the payroll
concerns of your company.

For any Georgia business to survive in the ever turbulent corporate arena, it has to build on a firm and sensible foundation. One fundamental building block is locating the right accounting solutions in Atlanta, Georgia.

Many small companies make the mistake of assuming that taking on payroll and accounting roles themselves will save money. What most small business owners do not know is that high quality Atlanta accounting services are surprisingly affordable for small to medium size companies.

Once your company makes the decision to hire an accounting firm in Atlanta, Georgia, you could soon discover that the investments.....

READ MORE > GBC Tax Services Website
For All Your Accounting Needs Call GBC > 678-366-9232

How Hiring A Payroll Processing Company Helps Small Businesses

2011-09-26T13:42:00.000-04:00

Make more time to grow
your business---hire a payroll
processing service company.

Anyone running a small business knows that keeping things on an even keel can be difficult to juggle on a daily basis. For this very reason, it pays to investigate business-friendly accounting options like Atlanta payroll services.

While the idea may appear financially daunting, payroll services in Atlanta, Georgia, can be surprisingly affordable as well as a great benefit to companies looking to take their investment to the next level.

There are numerous aspects of business that one can take for granted, but if one important aspect is neglected, it can throw everything else off balance. By retaining payroll services in Atlanta, Georgia, a company can eliminate one corporate hassle, allowing the business owner and partners....

READ MORE > GBC Payroll Processing Services Website
For All Your Accounting Needs Call GBC > 678-366-9232

What Small Business Needs Should Accounting Services Meet?

2011-08-31T14:36:00.004-04:00

A high-quality accounting firm
will address the concerns of
your company.

There are many consulting firms that promise comprehensive Atlanta accounting services, but not all are the same. Indeed, if you are in the market for someone to take care of the tax and payroll aspects of your business, it pays to investigate the company you decide to work with.

Think about it. Anyone handling your company's finances is handling the life-blood of your business. Would you hand that responsibility over to just anyone?

Selecting the right accounting solutions in Atlanta, Georgia, may seem a bit challenging at first...

READ MORE > GBC Tax Services Website
For All Your Accounting Needs Call GBC > 678-366-9232

The Joys of Parental Tax Benefits

2011-06-30T18:10:00.002-04:00

OK. Tax credits for parents don't scratch the surface of how much it costs to raise a child, but every penny helps. Besides, the joy of watching a child grow into a fulfilled and wholesome person is priceless. So parents, while you have a moment to yourself, consider the following tax benefits as a government supplement to various costs at various stages of your child's life:

1. Dependents

In most cases, a child can be claimed as a dependent in the year they were born.

2. Child Tax Credit

You may be able to take this credit on your tax return for each of your children under age 17. If you do not benefit from the full amount of the Child Tax Credit, you may be eligible for the Additional Child Tax Credit.

3. Child and Dependent Care Credit

You may be able to claim the credit if you pay someone to care for your child under age 13 so that you can work or look for work.

4. Earned Income Tax Credit

The EITC is a benefit for certain people who work and have earned income from wages, self-employment or farming. EITC reduces the amount of tax you owe and may also give you a refund.

5. Adoption Credit

You may be able to take a tax credit for qualifying expenses paid to adopt an eligible child. Taxpayers claiming the adoption credit must file a paper tax return because adoption-related documentation must be included.

6. Children with Earned Income

If your child has income earned from working they may be required to file a tax return.

7. Children with Investment Income

Under certain circumstances a child’s investment income may be taxed at the parent’s tax rate.

8. Higher Education Credits

Education tax credits can help offset the costs of education. The American Opportunity and the Lifetime Learning Credit are education credits that reduce your federal income tax dollar-for-dollar, unlike a deduction, which reduces your taxable income.

9. Student Loan Interest

You may be able to deduct interest you pay on a qualified student loan. The deduction is claimed as an adjustment to income so you do not need to itemize your deductions.

10. Self-employed Health Insurance Deduction

If you were self-employed and paid for health insurance, you may be able to deduct any premiums you paid for coverage after March 29, 2010, for any child of yours who was under age 27 at the end of 2010, even if the child was not your dependent.

For more information, visit our website: http://www.gbctax.com/income_tax_services.asp

About Capital Gains

2011-06-29T12:43:00.002-04:00

Most information about capital gains
from brokerage firms.

It’s likely that you’ve had some capital gains. Most of the information about capital gains comes from brokerage firms where you keep your investments; but, your capital gains in your retirement accounts are generally not reported unless you've started receiving distributions from them. Other information comes directly from you, the taxpayer. Information about capital gains can be kept in various ways accurately and efficiently. When in doubt, ask your tax advisor.

Keep in mind the following facts as of the date of this writing:

• The tax rates on capital gains are less than the tax rate on ordinary income. Most commonly, they range from a maximum of 15% to zero. There are special types of capital gains that are taxed at 25% or 28%.

• You can take a net capital loss on your tax return, but that loss can only reduce ordinary income, like your wages, by $3,000, and losses in excess of that amount are carried forward to the following year. Married taxpayers filing separately are limited to $1,500 per year.

• Net capital losses that exceed the annual limit are carried forward to the following year and treated as if incurred in that year.

There are other technical details that might only interest your tax advisor, but here’s what the IRS expects:

1. Anything you own, whether it’s for business, for pleasure, or for investment purposes, is subject to capital gains tax. Everything.

2. You must report all capital gains.

3. You cannot deduct and therefore do not report capital losses on property held for personal use.

As the summer heats up and you decide to get rid of the collectibles piling up in your garage or in some rented storage place, as long as you don't make a profit from selling your stuff, there's little chance that the IRS will audit your failure to report your yard-sale operation; but, just remember that the IRS can.

For more information, visit our website: http://www.gbctax.com/about-GBC.asp

A Middle Class Legacy of Rich Tax Cuts

2008-01-20T19:17:00.002-05:00

It is said that “money is the No. 1 fighting word in America”; therefore, it shouldn’t come as any surprise that Americans wrote more letters to their congressional representatives about money in 1969 than about the Vietnam War. It came about after a popular upheaval, decrying how “155 individual taxpayers with incomes above $200,000 paid no federal income tax on their 1967 tax returns” (Burman et al. 2002). The 155 individual taxpayers cited by Joseph Barr, who was Secretary of the Treasury under Lyndon Johnson from 1968 to 1969, included 20 millionaires!

Thus the Tax Reform Act of 1969 was introduced, and, after 18 major legislative changes, the 10% add-on minimum income tax evolved into what is commonly known today as the Alternative Minimum Tax (AMT). AMT now encompasses a complex set of rules that assesses a minimum tax rate of either 26% or 28% on Alternative Minimum Taxable Income (AMTI) and tacks it on the regular tax owed, currently affecting individual taxpayers with an Adjusted Gross Income even lower than $50,000!

For more information, visit our website: http://www.gbctax.com/income_tax_services.asp
Comparatively, when the minimum tax was first introduced in 1969, the 10% additional tax was assessed on incomes exceeding $200,000, which by most calculations, equals more than $1.1 million in 2007 – after adjusting for inflation; therefore, AMT, though originally aimed at the very rich who, through various loopholes in the tax system, had been able to purchase their way into paying no federal income tax, has now become a major source of government revenue assessed primarily on middle-income households. While there has been a 160% increase in the minimum tax rate since 1969, income subject to the tax has decreased by 95% in value. It's what is popularly described as the "AMT mistake": the government's failure to adjust the minimum tax for inflation.

Analysts generally agree that a second and more important mistake behind the AMT’s recent expansion is related to President Bush’s 2001 and 2003 tax cuts, which, ironically, reduced regular income tax without changing the way AMT is calculated, thereby giving the top 1% income earners in the US the most benefit. In other words, by reducing regular tax rates, the 2001 and 2003 tax cuts effectively reduced the income tax paid by households whose regular tax rates are higher than AMT rates. More than 90% of households that reported Adjusted Gross Income (AGI) in excess of $500,000 evaded paying AMT because their regular tax rates are higher than AMT rates, and they are the primary beneficiaries of the 2001 and 2003 tax cuts. Contrastingly, over 90% of upper-middle and middle income households whose AMT is calculated after taking the AMT exemption ($44,350 for single filers, $66,250 MFJ or widowers, and $33,125 MFS), disallowing credits for dependents, medical expenses, state and local taxes, and and other itemized deductions, made up the deficit in the government’s tax revenue created by the reduction in the regular tax rate.

By the numbers, in 2004 (latest complete data on AMT available from the IRS post the 2001 and 2003 cuts), of 132,226,042 tax returns sampled, 3,096,300 were subject to AMT, divided by AGI as follows: 4,714 had no AGI (0.15%); 5,809 had AGIs under $25,000 (0.18%); 14,821 had AGIs between $25,000 and under $50,000 (0.47%); 244,461 had AGIs between $50,000 and under $100,000 (7.9%); 1,095,242 had AGIs between $100,000 and under $200,000 (35.4%); 1,529,159 had AGIs between $200,000 and under $500,000 (49.4%); 149,042 had AGIs between $500,000 and under $1 million (4.8%); and 53,052 had AGIs of $1 million and over (1.7%)!

Naturally, no discussion about tax can be totally devoid of politics. The so-called AMT mistake has been a big boon for the federal government’s coffers. Increases in the AMT rate notwithstanding, which until recently had popularly been viewed as an equalizing tax on the very rich, Republican and Democratic administrations alike have reaped billions in increased revenues without appearing to raise income taxes. However, under assumptions that existing tax credits, like the child credit, would remain in place, “by 2013, the AMT alone would actually raise more revenue than the regular tax alone.”

As in 1969, the United States was at war in 2007. Unlike 1969, there was relatively no outcry when congress failed to “fix” the AMT till the last minute, and, unlike 1969, money does not appear like the no. 1 fighting word in America, as there seems to be little repercussions over a tax that has outlived its intended purpose. If the federal government's intent had been to raise the income tax on middle-income households, then compounding the burden in complicated and costly rules does not constitute a sound economic policy; but the American people's relative complacency about the way AMT has apparently been exploited to effectively fund upper-income households' tax cuts points to uncharacteristic apathy towards the government's ineptitude, deep-rooted corruption, cynicism, or subservience to a combination of interests that embody these and other uncomplimentary traits.

Recent criticisms of the present tax system range from those who lament their smaller proportionate tax, in comparison to taxpayers earning substantially less, to those who think that they are paying too much tax, irrespective of comparative earnings. Ideas for fixing the US tax system range from implementing a complete overhaul of the present tax code to those who aim to abolish the income tax system.

Proposing an eleventh hour one-year fix that shields millions of Americans from an average $2,000 tax assessment, congress’ so-called “fix”, however, has not changed the trend established since 1969: increasing the AMT tax rate while decreasing the AGI subject to the tax. No longer the equalizing tax on the rich, this complex set of rules determining how to calculate AMT, requiring middle-income Americans to tabulate two calculations before totaling their tax liabilities, has now paid for the tax cut upper-income Americans have received since 2001. There are many proposals for fixing the AMT mistake and for relieving the federal government from its subsequent addiction to the revenue; but, unless the tax is either abolished or indexed to affect the taxpayers originally targeted by its introduction in the tax code, middle income taxpayers will continue to tote a disproportionate burden of a questionable political agenda.

To learn more visit our website:http://www.gbctax.com/income_tax_services.asp

Retiring 401(k) Plan Fees

2007-12-07T08:36:00.002-05:00

In all business transactions,
pay for performance.

Pity the Wall Street Banker! Earlier this month, I heard that their bonuses were expected to fall $200,000 on average, from $2 million. After all, by many accounts, this year’s equity market hasn’t performed as expected. But then I read about the latest record-setting Wall Street bonus payout.

Ask five economists about the source of this Wall Street bounty, and, all things being equal, they might give the same answer, all things being considered, each with 25 different qualifications, all things being possible.

One conclusion many economists might propose, all things being bright and beautiful, is that Wall Street bonuses are not necessarily tied to performance. (Duh?) In fact, some economists might find a correlation between the size of an average banker’s portfolio and the average payout. So without begrudging those hard working folks at Wall Street the trillions of pennies they scrape from the millions of average investors like me, here’s a rub: no matter how the financial market performs, Wall Street bankers seem assured of receiving record bonuses every year. Whereas recipients of Wall Street’s annual windfall have to worry about ways to double that income next year, the average mortgage-paying, life-loving, family-supporting, global-rationing guy like me is thinking – or should be thinking – about ways to accumulate enough in retirement assets to simply live comfortably during those looming forgetful years. A pretend-economist like me, therefore, might not be faulted for assuming that a major chunk of the average household’s wealth is tied to retirement savings like a 401(k).

In a November 5, 2007, article published on Bloomberg.com, (Time for Employers to Cut Cord to 401(k) Plans), John F. Wasik cites a troubling calculation from the US Government Accountability Office, stating “that paying an additional 1 percent in 401(k) fees will reduce your retirement fund total by 17 percent after 20 years and 30 percent over 30 years.” In other words, those pennies scraped by Wall Street bankers will make a substantial impact not only on those record-setting Wall Street bonuses but also, in reverse, on the average retirement savings account. Those fees cited by Wasik, however, are not limited to 401(k) plans; but, in the interest of limiting the number of words in my first entry on this blog to .1% of an average Wall Street bonus, I will focus on 401(k) plans.

If a household’s goal is to accumulate $1 million in retirement savings over the course of two married careers, something that is not only possible but also recommended for the average middle income household with two working parents, then 1% percent in 401(k) fees, according to US GAO quoted by Wasik, will shave off $170,000 over 20 years! $300,000 over 30 years! What’s more troubling, according to US GAO, 83% of 401(k) plan participants don’t even know how much in fees and expenses they are paying for their 401(k) plan, and many investment advisors are not helping the situation. In fact, short of full disclosure, some investment advisors have a conflict of interest vis-à-vis their investment recommendations.

Looking to the regulatory agencies hasn’t paid dividends either. While the US Securities and Exchange Commission has instituted rules for using “plain English” in writing disclosure documents in financial statements, facilitating the ordinary investors’ understanding of a company’s financial health, understanding the costs of a 401k or any other retirement plan, it seems, require the help of a consultant like Jeb Graham. Graham correctly distinguishes between hard dollar and soft dollar costs, and it is through the so-called soft dollar costs that an average contributor to an employee retirement account can lose up to 30% of 401(k) value over 30 years. It is not hard to accumulate 1% in hidden fees – fees that are not disclosed in prospectuses – and even though the issue has been identified, raising the ire of an increasingly untrusting public, the problem is compounded, in my experience, by plan providers who have lied to their customers about those fees.

In deference to Graham, pin-pointing soft dollar costs does not require a consultation. Stephen J. Lansing describes 401k costs in plain English. Though Lansing underestimates the basis points charged by plan providers, even Lansing’s calculation of soft dollar fees amount to more than 1%: finder fees starting at .25%, 12b-1 fees starting at .25%, and sub-transfer agent fees up to .65%.

But rather than cutting the “cord to 401(k) plans”, as Wasik suggests, employers should seek a plan that adopts Wasik’s recommendations, which are also summarized interrogatively by the 401k help center dot com:

· Give plan participants control
· Eliminate conflicts of interest
· Provide access to all investments
· Pay only hard dollar costs to plan providers (no finder, no commission, and no asset-based fees)
· And shop for the best value

And, most importantly in all business transactions: pay for performance.