Archive for the ‘Around Town’ Category

QuickBooks ventures into the world of Customer Relations Management

Jodi Coppens of AdvantEdge Accounting Solutions is a consultant we have worked with for years.  Jodi is an expert with the MAS 90/200 software family of products and the QuickBooks software line of business software.

Our clients really appreciate Jodi’s expertise in helping them maximize their investment in software.  Jodi was telling me about some significant features being added to QuickBooks for the 2012 releases.

I asked Jodi to write this blog for our readers:

By the way, if you are interested in contributing to our blog, email Mary for more information.

QuickBooks takes baby steps into the world of CRM with the release of its 2012 product line!

Introducing the Lead Center:  moving towards a mini-CRM functionality, a new “Center” has been added to manage Leads.  You have basic support for tracking your interactions with potential customer.  You can add lead information one entry at a time, or cut and paste multiple entries from an Excel spreadsheet (after moving columns to conform to the mapping that QuickBooks requires). Once a lead becomes a customer, you can easily move the lead data to your customer database with a single click, and the best thing is, they don’t clutter up the customer list until that time.

Users who desire more-robust CRM functionality now have the option of integrating this software with through the new Salesforce for QuickBooks add-on.

Also introducing the Calendar View:  You can now access an organized and automatically populated calendar view of appointments, your To Do’s list, and invoices and bills coming due or past due.

You can also use this view to see what transactions you entered on any given date. I think I’m going to find this very useful!!

For more preliminary information on new and improved features in the 2012 product line check our Blog!

Jodi M. Coppens 760-722-6839 

Micah Dean Dorsett is here!

Jessica Dorsett, CPA and Senior Accountant at Polito Eppich Associates, adds proud mom once again to her resume.  Jessica founded our blog and is a major contributor to our firm so…Congratulations to Jessica and Brett on the birth of their son, Micah!  He was born on 8/29/11 at 10:35 p.m. and weighed in at 7 lbs. 13 oz.  Mother and father are well and adjusting to sleepless nights for a while.  2-year-old Chase has a new little brother and will have to share mom but is warming up quickly.  Brett is helping out until Grandma comes in this week!  Our best wishes on the blessed addition to your family!

Debt Deal but no new taxes… for now

Well, it finally happened.  Sort of.  A deal has been made on the debt ceiling issue and supposedly there will be no new taxes.  Congress agreed to make $917 billion in spending cuts (over 10 years) and the President is able to raise the debt ceiling by $400 billion.  Future debt ceiling increases of $500 billion have also been authorized.  No one actually likes the deal, but apparently it is as good as it’s going to get according to Congressional leaders.

Where are the $900 billion in spending cuts going to hit?  Well, that is up to a joint committee to determine.  This “committee”, which has not yet been established, has until November to make its recommendations for a vote by Congress.  If unsuccessful, automatic spending cuts would occur which have already been established.

They say that there will be no tax increases.  The problem is, those Bush-era tax cuts that were extended last minute… (remember that chaos?) are set to expire December 31, 2012.  Do you think they forgot about that?  I highly doubt it.  In addition, there are tax increases which will mostly affect the high income earners that are set to begin in 2013.  I’m sure Congress is counting on those tax increases. 

I personally struggle with the continued last minute deals that really don’t make a difference except to calm down the immediate crisis.  Politicians are letting their political aspirations limit their actual potential impact for good in our government.  Everything they do and pass is for a temporary fix.  They extended the Bush tax cuts for only two years… they extended the estate tax and AMT issues out for two years… they refuse to actually take on the tax system and give it a much needed tax reform.  I can’t be too harsh.  The “Gang of Six”, made up of six Senate members, has been working on a comprehensive tax reform plan.  However, it’s far from being ready for proposal to Congress.  At this point, it’s hard to say where those efforts will lead us. I understand that with the two main parties having such differing opinions on tax issues, this task is not an easy one.  But no one can deny that something has to be done.  

For more information see the ‘Debt Ceiling breakdown of deal’ on CNN’s website

Made in America

The continuing unemployment news makes it obvious to me that we must find a way to compete again in the manufacturing sector.  There are long lists of reasons why we don’t make things in America anymore, but the fact is, we must if we want a vibrant economy. 

Not all of us are capable of being “knowledge workers” or similar highly educated people employed in high tech or service industries.  There will always be a portion of any population that thrives by making things – performing physical labor.  We cannot continue to “legislate” or “collective bargain” the value of that labor; the world economy has set the value.  The market always sets the value of goods and services. 

During the great depression, the organized labor movement got a huge boost as the government came to the aid of the then under-represented American laborer.  Over the years the protections and bargaining rights have developed to the point where in many industries our labor has simply priced itself out of the market.  Labor unions have in many cases, caused manufacturers to move manufacturing off-shore or to “right to work” states” in the U.S.  It appears to me that unions are now costing their members more jobs than they are saving. 

I have made it my business to look for US manufacturing companies that are flourishing.  It seems that those few (and the numbers are growing) have developed a niche, are fanatical about quality, and happy enough to make a profit.  Their goal is not necessarily to go public or make gazillions of dollars.  They are typically small, efficient businesses who have identified a need in the marketplace and filled it….with high quality, appropriately priced products.  They do not compete on price; they compete on quality and service. 

Typically the stakeholders of these small companies are the owners’ families, their customers and their employees; not investment banks and shareholders.  This is the way most businesses get started; identify a need and meet it, making a good living and return on investment in the process. 

I now find myself looking carefully at where the things I buy are made.  If I can find a product made in USA that meets my needs, I buy it over the foreign made competition.  Thus in my own small way I am supporting my fellow Americans.  There is a growing movement to increase support for U.S. manufacturers.  Check out Diane Sawyer’s  Made in America Challenge.   Also there is an interesting blog called   “China Ate My Jeans”  written by my cousin, Tina Parsons, who has made 2011 the year she will try to purchase nothing unless it is made in the USA.  She has identified many US companies who are slowly beginning to rebuild our manufacturing sector. 

It may never be possible for U.S. manufacturers to compete on price in the world marketplace.  However, on a local or “close to home” level, niche manufacturers are beginning to flourish.  In my experience, the quality of the U.S. made products reward my extra shopping effort required to find them.  You won’t find these products at the local big box retailer.  You will have to look online buying direct from the manufacturer or at specialized “niche” retailers.

Deductible Auto Mileage Expense Increase

The IRS has issued the new mileage rates.  Beginning July 1, 2011, the standard mileage rate for business purpose is 55.5 cents per mile (was 51 cents from January 1 through June 30).  The most common uses of the rate include:

  • Mileage reimbursement to employees using an accountable reimbursement plan (can be less than the federal rates, but never greater)
  • Mileage deducted on schedule C
  • Unreimbursed business miles deducted on Schedule A 

The IRS publishes these rates as a guideline, not a requirement.  Businesses are allowed to use a lower rate if they choose.  However, you cannot use a higher rate.  If a business reimburses its employees using a higher rate, the difference would be taxable to the employee. 

The mileage rates for medical or moving expenses also increased 4.5 cents from 19 cents to 23.5 cents per mile.  The charitable mileage rate remains at 14 cents per mile.

Sales Tax Break for Californians

You may remember a few years ago when the sales tax in California increased by 1%.  That increase expired June 30, 2011 and as of July 1, 2011, we are back to a 7.25% state sales tax.   We’ve been waiting to see if the California legislature was going to extend it, since they can’t balance the budget. 

In San Diego, we have an additional 0.50% local tax which brings our sales tax to 7.75% in most areas.  Vista has an additional 0.50% city sales tax on top of that, bringing the new rate to 8.25%.  Click here to view the Board of Equalization’s chart of all cities in California and the sales tax rates effective July 1st.  

Make sure your accounting software, POS systems, accountants, etc. are updated on the change. 

Be sure to see your tax advisor if you are uncertain of your responsibilities.  Any excess sales tax collected must be remitted to the state.

Potentially Sizeable Tax Credit for Electric Vehicle Owners!

The IRS enacted a nonrefundable income tax credit for “new qualified plug-in electric drive motor vehicles”. For each qualifying vehicle, the credit is $2,500…. plus $417 for vehicles with at least five kilowatt hours (kwh) of rechargeable battery power, and an additional $417 for each additional kwh above five, to an additional credit of $5,000. This brings the maximum credit to $7,500. 

This is great news considering the 2011 Chevy Volt is advertised as having a battery capacity of 16 kwh, the 2011 Nissan Leaf 24 kwh, and the Ford Focus Electric 23 kwh. For example, Volt owners would be eligible to receive a whopping $7,500 tax credit ($2,500 plus $417 (for kwh of at least 5), plus $4,587 (for the extra 11 kwh (16-5)). 

Electric model requirements for the credit are that the qualified plug-in vehicles must be powered ‘to a significant extent’ by an electric motor drawing power from a battery with a capacity of at least 4 kwh that can be recharged from an external source of electricity. Cars with the ability to use both a plug-in electric engine and gasoline engine, technically known as plug-in hybrid electric vehicles (PHEVs) are eligible. 

Vehicles with fewer than 4 kwh or weighing more than 14,000 pounds are not eligible. 

The credit will have a production phase-out similar to the previous hybrid vehicle credit. The phase-out per manufacturer begins once the total qualifying vehicles manufactured and sold for use in the U.S. since the beginning of 2010 reaches 200,000 units. From there, the applicable credit per vehicle will be cut in half for two calendar quarters, then reduced by 25% in the third and fourth quarters and fully eliminated after that. The phaseout is more generous than the Hybrid credit which started to phase-out at 60,000 vehicles per manufacturer produced and sold after Dec. 31, 2005. 

To claim the credit Form 8834, “Qualified Plug-In Electric and Electric Vehicle Credit” will be filed with the taxpayer’s returns.

IRS Requesting Small Business Databases (i.e. QuickBooks & Peachtree)

Do you own a small business using QuickBooks or Peachtree as your accounting software?  Most likely you have stored critical unrelated financial information within the framework of the software.  By unrelated financial information we are referring to customer/client lists, personnel data, confidential client information, and other information used for business purposes.

Jump forward a few months from now and imagine receiving a letter from the IRS giving your business an examination notice (meaning you’re under audit).  How concerned would you be, or your clients for that matter, if the IRS requested your software database containing all this unrelated financial data?  Unfortunately this request is occurring more frequently and is being explained as the IRS’ attempt to modernize.  The IRS has purchased copies of various small-business accounting software to accomplish this task.  Requesting the electronic files is now standard operating procedure.

In recent years the IRS has ramped up efforts to more aggressively collect taxes from small businesses.  Statistics show that small businesses are one of the largest contributors to the “tax gap” (taxes owed but not paid or reported).  What better way to close the gap than to increase audits on small businesses where non-compliance is an issue?  Let’s face it…large corporations have their own accounting armada to keep everything straight with laws, regulations, and the taxes they pay.  Small businesses don’t have that luxury.

The main concern we have in providing IRS access to an accounting database is whether the auditor will stay within the scope of the requested information.  Do you want to IRS potentially contacting one of your clients?  Seeing what they purchase from you? Seeing what you purchase from vendors?  The fact that you are being audited is not something to brag about, but client relationships could be affected if some of their private information is handed over.  How would you feel if your personal information was handed over to IRS?  What would you do if you found out?  Another concern would be your reputation if  word got out that your business was under audit.  Questions could arise regarding the circumstances of the audit (randomly selected as opposed to improper filing). 

If a company turns over complete electronic records, there is no way of knowing what the IRS will do with that information.  The IRS has not addressed this issue except to say “privacy of return information” is of utmost importance to the agency.  Virtually all professional organizations in our industry are vehemently opposing this policy.

In subsequent posts we will discuss ways to approach this dilemma if you are audited and IRS requests your data base.

SBA Opportunities for Commercial Real Estate

Steve Harrington is a local banker our firm has worked with for years.  His articale below provides very valuable information about potential SBA loans for commercial real estate.  Finally, some positive banking news during this slow economic recovery.

By the way, if you are interested in contributing to our blog, email Mary for more information.  

Steve Harrington
Senior Vice President
California Community Bank
(760) 542-4230
(760) 542-4289 fax
(760) 390-4771 cell

I came across an interesting accommodation the SBA is allowing due to the challenging times in which we have found ourselves.  Many business owners utilize the SBA 504 loan program to purchase commercial real estate.  This program’s key benefit is 90% financing of the real estate and the improvements.  The financed portion is split between a bank loan in 1st trust deed position for 50% of the property value or proposed project cost and an SBA loan in 2nd position for 40%.  

The impact of the economic challenges we have faced over the last couple of years is that the value of the real estate, in most cases, has fallen more than the 10% equity.  I have a customer that would like to refinance his 1st trust deed loan, but assumed that the SBA would be reluctant to subordinate to a new first trust deed.  This assumption was based upon his opinion that SBA would see that the current value of the real estate has exposed their 2nd and would not approve a subordination request for a new 1st trust deed.

 What I found through conversations with the local SBA representatives is that the SBA will require a copy of the new appraisal, but will not base their decision to approve a subordination request on the current loan to value ratio.  What is of concern is whether their loan is current and handled as agreed, and whether the new first improves the cash flow of the business.

Taking advantage of the Enterprise Zone Program

We were introduced to Brendan Foote and his company, Cal Tax Group, Inc., through a client of ours who was able to claim quite a bit in California tax credits related to the Enterprise Zone.  This article gives the quick facts of what you need to know about the Enterprise Zone credits. 

By the way, if you are interested in contributing to our blog, email Mary for more information.

Brendan Foote, Partner

Cal Tax Group, Inc.,  San Diego, CA  92101   


 “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” We are clearly in the midst of difficult economic times that limit our ability to grow a business, but for companies in certain areas of San Diego County, there is one program that may be the perfect catalyst to take steps in the expansion direction. The San Diego Regional Enterprise Zone is a California funded tax incentive program that encourages businesses and business owners in certain parts of the state to create job opportunities and buy equipment. Through lucrative tax incentives, companies creating eligible jobs and purchasing qualified equipment can look forward to tens of thousands of dollars in state income tax credits. 

San Diego’s Enterprise Zone is concentrated south of Interstate 8, stretching from Downtown and east, including the majority of the South Bay and border regions as well. Companies located “in the zone” can obtain state income tax credits for each new employee they hire who meets one of thirteen qualifying criteria. Among these criteria include; former military, those hired off unemployment, residents of the local communities and those laid off from their previous place of employment. For each employee that meets one of these qualifying criteria, companies can receive up to $38,000 in credits over a five year period. 

For qualified equipment purchased, namely manufacturing equipment or computer based equipment; companies can convert California sales tax paid on such expenditures into an income tax credit. 

All California income tax credits obtained can be carried forward indefinitely and used against any tax liabilities resulting from Enterprise Zone income. For pass-through entities such as S-Corporations and LLCs, the income tax credits flow directly to the shareholders of the company and can be applied against personal income taxes resulting from W2, K-1 and rental or other passive income sources generated within the Enterprise Zone. 

One of the best parts about this program is companies who have not yet participated can identify and claim credits retro-actively on amended tax returns for up to four years against taxes they have paid to the State. Refunds will be issued and any remaining credits can be carried forward for future use.

 In short, if you aren’t taking advantage of the Enterprise Zone Program, you are passing up “free” money.


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