Accounting Blog

The Ins and Outs of Long-Term Health Care Insurance

Americans are living longer. Given the significant costs involved, the possibility that long-term care might be needed one day is a financial planning concern.

 

Long-term care insurance is designed to cover the cost of care for individuals who need assistance with “activities of daily living,” such as bathing and dressing. Medicare and supplementary health insurance policies generally do not cover long-term care services. And Medicaid coverage can only be accessed if an individual meets strict state and federal income and asset guidelines.

 

Some employers provide long-term care insurance as an employee benefit. Long-term care policies are also available to the public. Before making a decision to purchase a particular policy, individuals should compare pricing, costs, and features and investigate the insurer’s financial health.

 

Long-term care policies generally fall into two categories: indemnity and reimbursement. An indemnity-based policy pays a per diem or dollar amount of benefits for an insured’s long-term care expenses, regardless of the insured’s actual expenditures. You can receive benefits of up to $340 per day (or the actual cost of long-term care services, if greater) are income-tax free.

 

A reimbursement policy, on the other hand, does not pay a set dollar amount. Instead, the insurer pays for long-term care expenses incurred up to the policy’s maximum benefit. Policy benefits are income-tax free.

 

Premiums paid for qualified long-term care contracts are deductible as itemized medical expenses, up to certain annual limits. Self-employed individuals may deduct the premiums as a business expense.

 

If you would like to discuss long-term care insurance or need help choosing a policy, please contact us today.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Understanding the Advantages of a Health Savings Account

The rising cost of health care has contributed to the growing popularity of health savings accounts (HSAs). An HSA is a tax-favored account that can be used to pay out-of-pocket medical expenses.

 

To be eligible for an HSA, an individual must be covered under a high deductible health plan, either personally or through an employer. The plan must have certain provisions, including a specified minimum annual deductible and a dollar cap on the expenses required to be paid out of pocket for covered benefits. Additional health coverage is generally prohibited, although there are certain exceptions.

 

From a federal income-tax standpoint, an HSA offers several benefits.

 

  • Within limits, HSA contributions are tax deductible (or pretax under an employer’s cafeteria plan).

 

  • Earnings on HSA investments accumulate tax deferred.

 

  • HSA withdrawals used to pay qualified medical expenses are tax free.

 

Withdrawals not used for qualified expenses are taxable, and a 20% penalty also may apply. Any unspent HSA funds can simply accumulate in the account for future use.

 

 

To learn more about tax rules and regulations health savings accounts, give us a call today. Our knowledgeable and trained staff is here to help.

 

 

Individuals age 55 or older as of the last day of the year who aren’t enrolled in Medicare may make additional “catch-up” contributions of up to $1,000 annually.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Be Sure Your Family can Keep Their Home with the Right Life Insurance

You chose your home for a variety of reasons — safe neighborhood, good schools, nice yard, friendly neighbors. It’s the ideal location to raise your family. But have you considered what would happen to your family if you were to die unexpectedly? Would your spouse be able to afford the mortgage? Could your family continue to live in the house and maintain their lifestyle?

 

One of the primary purposes of life insurance is to provide for the financial needs of loved ones after your death. Buying sufficient life insurance can help ensure your family doesn’t have to worry about losing their home.

 

Real protection for loved ones

 

Sufficient life insurance coverage could help in many ways. It could help your family cover mortgage payments, property and school taxes and homeowner’s insurance premiums. Your insurance money could be used to maintain the house’s heating and cooling systems and pay for any needed repairs to the roof, cellar or driveway.

 

Life insurance could also help your family pay nonhome-related expenses, such as car payments or medical and child care bills and other expenses. And, when your children are ready to go to college, life insurance proceeds could help fund their tuition.

 

Real choices

 

You have many options when it comes to buying life insurance. There are policies designed to meet every need and budget. Term life insurance is a good choice if you’re on a tight budget. It provides coverage for a set period stated in the policy. Permanent life insurance is more expensive, but it provides more than a simple benefit paid out on your death. A portion of your annual premium payments will go into a cash value account that can accumulate interest tax deferred.

 

Want to know more about your insurance options? Give us a call, right now, to talk options to keep your family secure.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Working with Employee Records in QuickBooks Online

Payroll requires countless details about each employee. QuickBooks Online will walk you through the process of entering them.

If you’ve only been on the receiving end of a paycheck, you may not know just how much prep work went into your neatly-organized paystubs. Those official-looking columns of numbers that described how much you earned and how much was taken out – and for what purpose – were the result of a tremendous amount of data entry when you were hired.

Now it’s your turn to discover how complex that recordkeeping task is. QuickBooks Online was designed for small businesspeople who weren’t schooled in the intricacies of double-entry accounting, so it simplifies the process of preparing for payroll as much as possible. Still, it will probably be the most challenging element of your web-based bookkeeping.

We can help you navigate these sometimes-choppy waters so that you’ll be ready to run your payroll with confidence. Here’s an overview, though, of one of the most critical steps: creating employee records comprehensively and accurately.

Just the Facts

The left vertical toolbar in QuickBooks Online contains a link for Employees. This is where you’ll add and edit staff records. Once you’re set up and have begun running payrolls, the page that this link opens will display your current year’s payroll cost totals. There will also be a list of employees and their pay rates and payment methods; you’ll be able to click on their entries to view and edit their record details.

To get started, though, you’ll click on Add Employee. This opens a page that asks for the individual’s:

  • Full name,
  • Withholdings (you’ll enter W-4 information here),
  • Pay frequency,
  • Pay type and amount (multiple options are available here besides salary and hourly),
  • Deductions (retirement, health care, etc.), and
  • Pay method (check or direct deposit).

Figure 1: QuickBooks Online and its payroll component contain many screens like this that employ common data entry conventions. The mechanics are easy, but 100 percent accuracy is required.

Some of these requests for information have a small pencil icon next to them. This means that there are additional screens where you can provide the needed details. In the example above, you’re defining pay types that will be available to the employee, like sick pay and vacation pay.

Depending on your company’s benefits, entering deduction information may be the most detailed and time-consuming task. QuickBooks Online first lets you choose between entering a deduction/contribution or garnishment. If it’s health insurance, for example, you’ll have to indicate how much money will be deducted from employees’ earnings each pay period (in dollars or a percentage) and what the company-paid contribution will be (if any). If there’s an annual maximum, you’ll also enter it here, and you’ll indicate whether the premium amount is taxable or pre-tax.

A sample check is displayed in the right column of this page. As you enter information, the check will be filled in with the correct amounts. If you don’t have a particular detail at hand, you can save what you’ve done and come back later to finish the record. And you can always return to edit data you’ve supplied.

When you’ve completed all of this and clicked Done, you’ll be back at the Employees screen.

Click on the name of the staff person whose records you just created, and you’ll see something like this:

Figure 2: Once you’ve created an employee’s record, you can view all of its details and edit it as needed.

There will undoubtedly be times when you’ll want to see your employee data in report form rather than clicking through numerous individual records. QuickBooks Online offers several report templates that accommodate this. You’ll click on Reports in the left vertical toolbar, and then All Reports | Manage Payroll. The most relevant here in terms of viewing employee-related information are:

  •  Vacation and Sick Leave,
  • Employee Details,
  • Payroll Deductions/Contributions,
  • Workers’ Compensation, and
  • Employee Directory.

Running your first payroll can be daunting. We hope you’ll let us help you prepare for it.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

How to Add Documents in QuickBooks

Accounting is about more than just numbers. QuickBooks lets you make documents available from within the program itself.

You could call QuickBooks a “green” computer program. It can conserve reams of paper by storing customer and vendor records, for example, emailing transaction forms, and accepting online payments.

Most small businesses are a long way from being “paperless offices,” despite the predictions so many people made when PCs became commonplace. Even though you’re making an effort to be as digital as possible with your accounting files, not everyone else is yet. So you still have to deal with paper.

And you’re probably still consulting paper documents or stored computer files or scanned images that relate to your accounting data. QuickBooks makes it possible to keep this information close at hand, easily accessible from the software itself.

The Doc Center

QuickBooks provides a centralized area for managing the documents you want to keep close at hand. The Doc Center contains tools you’ll need to work with your documents. From here, you can:

· Add them by locating them in your storage device or scanning them indirectly,

· See their details and add to them,

· Search for them, and,

· Either remove or detach them.

Figure 1: You’ll use the tools in the QuickBooks Doc Center to work with the documents you want to have available from within the program.

There are probably times when you have supporting documentation for invoices or customer and item records, for example. In these cases, you can attach those background documents to the related QuickBooks forms.

Easy Operation

It’s not difficult to work with documents in QuickBooks. But if you don’t have much experience working with file attachments or scanning paper forms, we can walk you through the process. To get started, click on the Docs tab in the left vertical pane or open the Company menu and select Documents | Doc Center. You’ll see a screen that looks like the one pictured above.

Let’s say you have a special price list you often need to consult. Click the Add icon. A window then opens that contains a directory of all of the folders and files on your PC and any external storage areas. Browse to the pricing document you created earlier and double-click it.

QuickBooks will return you to the main Doc Center screen, and you’ll see the name of your file and the time added in the first row of the data table there.

Deeper Descriptions

Figure 2: Once you’ve added files to the Doc Center, you can view and add details or open the original document.

Click in the box in front of the file name, and buttons in the lower right of the screen will light up. Click on View Details, and a small window opens. You can enter information in fields here to add a Title, Description, Keywords, and Comments. Click Save & Close when you’re done. Other buttons here let you Open the file or Remove it.

Note: To bring in documents, you can also drag and drop them from Outlook, folders, or your desktop. We can help you learn how to do this.

Scan a Document

You can also scan documents directly from your scanner into QuickBooks. Click Scan. The QuickBooks Scan Manager should open and locate your printer or scanner. After you’ve selected it and your other Scan Options, click the Scan button. If you’ve opted to see a preview, that page will appear for your approval.

Click Done, and you’ll have several options for working with the image. When you’ve finished, click Done Scanning and enter any desired descriptive details. Click OK, and the Doc Center will display again with your new scanned document in the list.

Attach to Forms

Figure 3: Many QuickBooks forms display the Attach File icon.

If you have supporting documentation for an invoice, for example, you can easily make it available from the form itself. Click the Attach File icon and select your file using the Doc Center’s tools. Once you’ve added an attachment to a form, the icon will display the number of documents that are available there.

Your computer’s storage space may be well organized, but you can still waste time trying to hunt down the document you want right when you want it. QuickBooks’ Doc Center can minimize your search time and ensure that important documentation is at hand.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Why You Should Use QuickBooks’ Snapshots

QuickBooks provides multiple ways to get information about your customers, and their payments, and your company itself. The software’s Snapshots provide quick, thorough overviews.

What do you do when you need to get information in QuickBooks about customers or about payments they’ve made in QuickBooks? You have several options. You could, for example:

  • Create a report
  • Go to their Customer pages
  • Click on Receive Payments on the Home Page and use the Findarrows (not very elegant or fast, but would be an easy way to find recent payments).

One of QuickBooks’ strengths is its flexibility. It helps you find the exact information you’re looking for in a variety of ways. Which one you choose at any given time depends on what screen you’re working on at the moment and precisely what slice of data you need.

A Home Base

The desktop version of QuickBooks doesn’t have a “dashboard,” like web-based financial applications do. Dashboards are like home pages on steroids. Rather than just providing navigational tools and menus, Snapshots display charts and grids and lists representing the data that you’d most likely want to see when you first log on, like account balances, summaries of income and expenses, and high-priority tasks, with links to related activity screens. You can usually customize these.

QuickBooks’ Reminders tell you what needs to be done either today or very soon. But they don’t reveal anything about your financial status. Snapshots do. There are three versions: Company, Payments, and Customer.

QB-4

Figure 1: The QuickBooks Customer Snapshot sums up each customer’s activity and history in a one-page view.

Many Sections

Let’s look at the Customer Snapshot to see how these work. To find it, click on Snapshots in the left vertical navigation pane. When the window opens, make sure that the Customer tab is active; if not, click on it. Click on the arrow next to the CUSTOMER field in the center of the very top to select a customer.

You’ll see three columns of information here. The left pane displays some commonly sought numbers (like Total Sales) and some numbers that you might have trouble finding any other way (Average days to pay, etc.). In the middle, you’ll see Recent Invoices and Recent Payments. And the right section (not shown in the screen shot) includes two customizable graphs, Sales History, and Best Selling Items.

This is the default layout, the information boxes you’ll see when you first open the Company Snapshot. To remove any of them, click on the X in the upper right corner. You can restore them at any time by clicking the arrow next to Add Content in the upper left and then click the +Add button next to the one you want.

You can also move the blocks into different positions on the page. Grab one by clicking on its header and holding it, dragging it to the preferred position, and releasing it.

Personalized Pages

QB-5

Figure 2: You can add, delete, and move blocks of data around in the Customer Snapshot.

Users who have been assigned access to the data that each Snapshot contains can customize their own views by adding or deleting sections and rearranging them. So each employee can have his or her own unique-looking Snapshots, though the real-time data in all of them will be the same.

Note: If you’ve given employees besides yourself access to QuickBooks, it’s important that you assign permission levels to them. You probably don’t want everyone to be able to see and modify everything in your file. We can help you set these up.

Other Snapshots

The other two Snapshots are more complex, containing more data options. They can, however, be customized in the same ways that you personalized the Customer screen. The Payments Snapshot can give you a quick update on things like Recent Transactions and A/R by Aging Period.

The Company Snapshot lets you display up to 12 lists and charts, including:

    • Account Balances,
    • Customers Who Owe Money,
    • Expense Breakdown, and,
    • Vendors to Pay.

This would be a good page to use as your dashboard (home page), especially since it can also show you your Reminders. With the Company Snapshot open, go to Edit | Preferences | Desktop View | My Preferences and click on the button in front of Save current desktop. Remove the checkmark in front of Show Home page when opening company file if one is there.

QuickBooks’ Snapshots can get you up to speed quickly on critical elements of your accounting file, but there are other reports that you should run regularly, including complex standard financials reports that require expert analysis. We can help you interpret these, which in turn will help you make smarter, more informed business decisions.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

What You Need to Know About Charitable Gift Annuities

With a charitable gift annuity, you make an irrevocable transfer of cash, securities, or other property to the charity offering the program. In return, the charity promises to pay you or another individual (or both) a guaranteed income for life. Keep in mind that once you donate money, it belongs to the charity.

You can decide to have annuity payments start immediately or deferred until a later date. These payments are made from the organization’s general assets, not just the assets that you have transferred. When the last annuitant dies, any of your remaining assets typically go to the charity for its general use. Since the annuity is backed by the general assets of the charity, it’s a good idea to check out the charity’s track record and financial stability.

Gift from the Tax Man
Charitable gift annuities can provide a number of tax advantages. The portion of the transfer that is considered a charitable gift qualifies for an immediate income-tax charitable deduction. The deduction is generally equal to the difference between the value of the transferred assets and the present value of the annuity, determined according to IRS tables and other factors.

You also may be able to exclude a portion of each annuity payment from your gross income for income-tax purposes. If you transfer appreciated property to the charity, you may report the resulting capital gain ratably over your life expectancy, provided certain requirements are met. A charitable gift annuity also could have gift-and estate-tax implications.

Don’t deal with tax issues on your own. Call us right now to find out how we can provide you with the answers you need.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Understanding what Investment Fees You can Deduct

Investors may be able to include certain investment-related fees with their miscellaneous itemized deductions. Here are some guidelines:

 

Taxable accounts. Fees incurred to produce or collect taxable income or to manage income-producing investments are potentially deductible. (The deduction for miscellaneous expenses is limited to the total amount in excess of 2% of adjusted gross income.)

 

Tax-deferred accounts. Investment management fees paid directly from an individual retirement account are not deductible. But investors may receive a deduction if they are billed separately and pay the fees with outside funds.

 

Tax-exempt accounts. Fees for managing tax-exempt investments — such as municipal bonds — are not deductible.

 

Brokerage fees are never deductible, but they are taken into account in figuring an investor’s capital gain or loss from selling the investment.

 

For more information about investments and taxes, give our tax professionals a call today.

 

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Determining the Cost Basis of an Investment

Figuring out the cost basis of an investment when you’re ready to sell can be simple — or it can be quite a challenge. Usually, cost basis is the amount you paid for an investment. That sounds straightforward enough, doesn’t it? But a number of things can affect cost basis. And a few of them can make the calculation difficult.

 

Why You Need It

 

When you sell an investment, you’ll need to know your cost basis to figure your gain or loss for tax purposes. Basically, the difference between your cost basis and the sale proceeds (net of commission) is your gain or loss.

 

Adding On

 

What if you have reinvested earnings, such as dividends and capital gains distributions? The tax law requires you to pay taxes on these amounts in the year you receive them, even though you never actually saw the cash. To avoid paying taxes twice, add the amount of any reinvested earnings to your original cost basis when you sell all your shares. This will give you a new cost basis and either reduce your taxable gain or allow you to claim a larger loss.

Other Thorny Issues

If you own shares in a company that has merged with or been acquired by another company, figuring out your cost basis can be complicated. Be sure to save all the paperwork you receive, as it may include helpful information. If you don’t have the paperwork, give us a call. We’re happy to help.

 

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Why You Should Convert Your Roth IRA in a Low-Income Year

Do you anticipate your income being lower this year? If you have a traditional individual retirement account (IRA), this might be a good time to consider a conversion to a Roth IRA, especially if the income from the conversion would be taxed in a low bracket.

 

Why Have a Roth?

 

Roth IRAs offer the opportunity for tax-free earnings — and those earnings can potentially accumulate for a long time since a Roth IRA owner has no obligation to take annual minimum distributions. Any withdrawals you choose to make from your Roth IRA after you have had it for five tax years would be both tax and penalty free after you reach age 59½.

 

Weighing the Tax Consequences

 

Projecting how much of your IRA you could convert before entering a higher tax bracket may be helpful. For example, single taxpayers in 2015 will see their 15% marginal rate jump to a 25% rate after their taxable income exceeds $37,450. Therefore, an individual with $30,000 in taxable income would have room for an additional $7,450 of taxable income from a Roth conversion before the marginal rate would change.

 

Call us for help with a Roth conversion analysis today.

 

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

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