Tax season 2015 had a new item for tax preparers to check off- does the taxpayer have health insurance?  With the new ACA laws, taxpayers faced a penalty for remaining uninsured.  However, 6.6 million people paid the penalty, which was 10% higher than the IRS anticipated.  That increase includes a portion of tax payers who didn’t need to pay the penalty, either because their income was low enough to exempt them from it or simply because they paid it in error.  The estimated total number of tax payers who unnecessarily paid the penalty is 300,000 individuals, and with the average penalty coming in at $190, they overpaid an estimated $35 million.

Without a professional and trusted tax preparer, taxpayers run the risk of not only losing out on deductions that they qualify for, but they also could pay penalties and taxes that they do not owe.  If you think you unnecessarily paid the ACA penalty, give Wentworth and Associates a call at (570) 430-8082 and we can review your tax return. Our mission is to make sure your taxes are done correctly and timely, so you can keep the money that belongs to you.

To read the entire article at Bloomberg.com, click here.

As a business owner, it is important to stay informed about our national politics and economic news as well as international affairs.  Lately, we’ve been hearing a lot about Greece and China, and there are a few sources who point out the investment opportunities that lie admits the many known challenges we’re facing.

An article from Edward Jones points out that China’s role in the global world and global market has been increasing steadily over past decades, as it becomes the world’s second largest equity market and economy.  Interestingly enough, China is considered a “developing market”, not a “developed market”- but it is no stranger to being the largest market in the world.  In the 1800’s, it was the dominating market for centuries.

As China continues to grow and become wealthier, Edward Jones believed we can look for Chinese consumers to keep shopping while demanding cleaner air, better working conditions and greater freedom.

Below is a chart and excerpt from the Edward Jones article, that delves deeper into the benefits and challenges that investors will face as China’s economy grows and positions itself to possibly become the dominant economy.

“China’s Challenges Today 
China’s growth rate has slowed to less than 7% this year. While that’s strong growth, the country still faces challenges, including:

• A rapidly aging population and rising wages
• Falling housing prices
• Highest debt-to-GDP ratio among developing countries

Policymakers have taken numerous steps to combat slower growth, including lowering interest rates. Since the government continues to have a great deal of control over the economy, we think it can manage these challenges during the transition to slower growth.
A Long Way to Go 
As it grows bigger and wealthier, China is also playing an increasingly important role in world economic and political affairs. It wants to flex its newfound muscles in various ways. However, remember that China is still a developing country with many obstacles. That’s why we think a lot of the fears about China are overblown.

China is taking steps for its currency, the yuan, to have a larger role in global finance. One goal is to have the International Monetary Fund (IMF) recognize the yuan as a reserve currency, which may occur later this year. But we believe that won’t have much impact on the dollar. According to the IMF, about 80% of world trade is in dollars, and while the yuan is the second most-used currency at about 9%, the euro is close behind.

In addition, we don’t believe increasing the yuan’s use should have much impact on the value of the dollar, which changes in response to economic conditions here and abroad. Over the past year, the dollar has risen sharply compared to most other currencies because the U.S. economy is relatively strong, while China limits changes in the yuan’s value. Over time, as China removes restrictions, we expect the country and its currency to have a bigger role in international finance. But China still has a long way to go.

What Should You Do? 
Many investors may have benefited indirectly from the growth of China and its consumers. Despite its progress, we still don’t recommend investing directly in China by buying Chinese stocks because of concerns about the government’s control of the economy and markets, as well as regulatory and legal structures. But don’t let fears about China’s size or role in the world keep you from investing internationally and domestically – you may miss opportunities that are right for you. In our view, an appropriate mix of stocks, bonds and international equity investments can help keep you on track toward your goals, regardless of what happens in China.”

One word: Absolutely.  If you only need personal income tax returns done, or if you will need a corporate return prepared as well, there are things you can be doing right now that can save your accountant time and save you money when April 15^th rolls around.

You may receive an organizer or checklist from your tax preparer that highlights various types of income that you will need to report, and expenses that you can deduct.  Obvious forms of income related paperwork include W-2’s, 1099’s, etc.  But there are less popular types of income that you will need to report as well, and it is imperative that you include all of this in the packet that you give to your accountant, so that you can avoid penalties and interest on unreported income.  It’s also just as important that you include all of your deductions as well- and be sure to have documentation for anything that you want to deduct!  Be sure to keep in mind that some tax deductions have expiration dates, so you might want to make those specific purchases or financial decisions while you can still reap the tax benefit!

If you are involved in a corporate tax return, be sure that your financial statements are correct and thorough, and make sure to include an organized assembly of all necessary backup paperwork.  Having these papers in some sort of order will help your accountant to double check your Balance Sheet and Profit and Loss Statement more efficiently, saving you a great deal of money.  If you need help making sure your financials are in order before tax time, it might be wise to hire a bookkeeper to compile them for you.  Bookkeeping rates are much lower than rates typically charged for completing tax returns.

If your tax return preparer does not provide you with a yearly organizer, you can access some sample checklists online, and from that, you could make your own.  Or, switch to Wentworth and Associates so you can be on our mailing list of yearly, personalized tax organizers.

As the new year begins, life gets busy and filing paperwork is not a priority, so get a jump start now so you can avoid paying for it in the spring!

Contact us at kew@wentworthandassoc.com to set up your tax meeting.

Cybersecurity: how much is it worth to you?  Considering the number of security breaches in the news lately, from hospitals to retailers and now schools, it’s certainly worth a great deal to small and midsized business owners.  But what’s the dollar value?  According to Businessweek, a 50 employee company spends approximately $57,600 per year on cybersecurity.  That averages about $1,152 per employee.  Therefore, it’s safe to assume that a five employee company would only spend about $5,760 per year on cybersecurity, right?  Well, not exactly.  A great deal of cybersecurity costs are billed and paid in lump sums, rather than charged per employee.  For example, a firewall costs about $1,000-2,000.  That amount doesn’t change if you hire two more people, or let go of 10 people.  The firewall will still cost $1,000-2,000.  However, security measures to encrypt email accounts may be charged on a per unit basis, so a small business would pay a significant amount less than a large company with 100+ employees.

So when businesses look to move their accounting online, what does this mean for the cost of cybersecurity?  Well, those costs for things like QuickBooks Online are built in.  With a reputable company like QuickBooks, you can be confident that your financial data is protected with measures far beyond what a typical small business could afford.  Therefore, some may argue that moving to online accounting is safer than keeping your accounting stored on a computer or server in your office.  Since most companies do not have the proper security measures in place, or do not pay to update them on a yearly basis, that may be the best option for your company.  There are so many variables within small business’ security measures that could compromise the integrity of very important data.

Think your company may fall within that category?  Call us at Wentworth and Associates and we can discuss it.  Our intent is to match companies with the option that is best for them and their needs, and bring to light new and exciting opportunities for businesses that they weren’t aware of before.

“The cloud” IT lingo has permeated the industry for quite a while now, but for businesses that haven’t switched from their current data storage solutions, it’s important to take a look at why the public cloud could work for you.

According to Forbes, the “public cloud is better than traditional infrastructure in nearly every way for most applications”.  To translate, this means that storing your data in a public cloud (or “online”) is better than storing it on your desktop or server in your office.  For many reasons, this makes a lot of sense.  If you’re storing your accounting information (i.e. QuickBooks) on your desktop or server, then you absolutely need a great anti-virus program, and a fail proof backup system.  If your server crashes, it is imperative that you have copies of your data elsewhere, so as to not lose all of your company’s financial information.  If you don’t, it could cost you thousands of dollars to either rebuild that information or take it to an accountant so they can redo all of the work you already did.  If you do have a state of the art backup system for your infrastructure, you won’t have to worry about those hassles- but you probably have quite a hefty price tag for that peace of mind.  And that doesn’t include yearly maintenance, updates and other work your IT company must do in order to keep you up to date and operating well.

With the public cloud, all of those worries, costs and responsibilities are placed on your cloud hosting provider- and usually at a much lower cost to you.  And because your data is no longer stored in your office, you’ll free up a lot of desktop or server space, which can really improve the longevity of your machine.  Worried that working online might not be for you?  Well, if you’re already using online banking, then you are primed to start using cloud technology!

Those benefits are applicable to basically any program or data you store in the cloud, but storing your accounting information there has some specific benefits as well.  As a business owner, you now have the flexibility to work on your financials or view them at any time, from virtually anywhere.  You also have constant access to your financial team and your accountant- those “big business” perks and resources are now available to you!  With the added freedom and time saving ways of conducting business, you’ll have a lot more time to do what you do best- run your business!

Thinking that cloud accounting could work wonders for your company?  Give us a call today at (570) 430-8082!  We can sit down and talk to you about how it works, and even help you in your transition if you decide that the public cloud would benefit you!

With Halloween a mere week away, that only means one thing for businesses- the holiday season is upon us, and year end close will arrive very shortly.  For smart business owners, this also means that now is the last possible chance to check for any tax deductions you may have missed. 

Wentworth and Associates sends our clients reminders each fall so that business owners remember to include any and all deductible expenses in their tax information.  Our list of deductions exceeds 75 items- we make sure to include anything that might be relevant to your business.

Tax deductions are an overlooked way to make more money for your company.  As the saying goes, “A penny saved is a penny earned,” and with tax deductions, we could be talking about thousands of dollars, not cents.  Your company could end the year with a few extra thousand dollars if you take a couple minutes now and before you give your accountant your tax information to be sure you included all of your deductible expenses.  This could translate into employee bonuses, reinvestment in the company- anything you’d like!  Not sure what all of the deductible expenses are?  Below we’ve listed a few common expenses that most businesses could take advantage of:

 There are over 65 more items on our list of deductions.  If you want to stop paying too much in taxes and truly focus on the financial health of your business, be sure to call us today at (570) 430-8082 for a consultation.  We can show you how much you can save come tax time 2014!    

“The cloud” is a buzzword that has penetrated our accounting vocabulary for the past few years.  Both consumers and businesses can take advantage of cloud technology, and studies show that this is an increasing trend.  However, there are recent security concerns that made industry leaders ask the question: “Is the cloud really beneficial?”  In short, their answer is yes.

According to Andre Tse of The Street, “Cloud computing has become extremely convenient for businesses and individuals, providing instant access to data from any computer, any time.  People are using smartphones to access information on the go. Companies vouch for the cost savings achieved by utilizing the cloud.”  Even with the NSA’s surveillance program, industry leaders continue to believe that the benefits far outweigh any risks.  Rick Summer, a Morningstar technology equity analyst believes that “the convenience and functionality that companies and customers are getting will really, for the most part, trump privacy concerns provided that the regulatory environment protects them in an adequate way.”

Of course, smaller companies who provide cloud technology to consumers and businesses may have a harder time providing adequate security measures for their users, while larger, more economically stable companies will prove to be more successful in this domain.  That is why Wentworth and Associates partners with industry leaders, such as ADP, Thomson Reuters and QuickBooks, to provide cloud accounting to our clients.

Security and accuracy are our top priorities, and we only promote and provide solutions that we are willing to use ourselves.  Thomson Reuters has been an industry leader in professional software programs for over a decade, and ADP is the most trusted and sought after company by government agencies and large corporations alike.  QuickBooks, as most people know, is the leader in consumer product identification and satisfaction among both the consumer and business sectors. 

Conversely, studies showed that, on average, small to mid-sized businesses typically fail to have adequate backup/recovery plans for their technological infrastructure, as well as anti-virus and encryption for their sensitive information.  The risk of data loss or theft from the aforementioned threats proves to be much more significant than security breaches from trusted cloud technology providers.

It’s important that business owners consider not only the cost benefit of cloud technology, but also the security benefit of trusting their information with the industry leading providers.  Thinking that cloud technology could save your business money and prevent sensitive data loss or theft?  Call us today at (570) 430-8082 to find out how.

There was a recent article in Young Entrepreneur about “cash strapped start-ups” that discussed the financial pitfalls of starting a business, and how to avoid or minimize the negative outcomes.  As a person who operates very conservatively when it comes to finances, I favor any plan that includes the least amount of debt.  Sometimes, however, it pays to take that gamble if you believe in your business, in your idea and in your ability to make that dream a concrete (and lucrative) reality. 

The ideas presented in the article were pretty commonplace, but they are so incredibly important to entrepreneurs.  The start-up process is laced with challenges, and it is imperative that these financial basics remain front of mind when it comes to funding your dream.

A good number of start-ups get their funding from friends and family, instead of banks.  This makes perfect sense- if done carefully and correctly.  Be sure to understand fully and completely what your friends and family want to get out of their investment- Is it a donation?  Do they expect to be paid back in full with interest, and when do they expect this to happen?  Do they think that they will reap financial benefits from your future success?  Be sure to have an open discuss so that all parties know the terms of the deal, and it wouldn’t hurt to get everything in writing.  The document doesn’t need to be 72 pages long and written in sophisticated legalese.  Having concrete evidence of the deal will not only help to avoid miscommunication between friends and family, but it will also help future formal investors to feel more comfortable investing in your company because your finances are clean and well documented.

Finally, an entrepreneur must be clear on two things- how much cash they have on hand to spend on business expenses when they begin, and the sacrifices they are willing to make to continue to fund their business if they experience difficult financial times.  Especially when there is a family involved, both spouses must agree on what they are willing to sacrifice so that the business can succeed.  Are vacations going to be replaced with stay-cations?  Will eating out and other entertainment expenses be replaced by family board game night and ramen?  Are you willing to relocate to a smaller house in a neighborhood with lower taxes, if necessary?  Knowing exactly what you are willing to give up so you can pursue your dreams will not only help keep family relationships intact, but it will also give you a more accurate analysis of your business’ financial situation. 

Knowing what you’re working with and what you’re willing to give up will help make the start-up process easier.  In that difficult start-up time that comes after expenses are increasing but before the revenue starts pouring in, remember to be creative.  Store owners have rented out space to other vendors to generate cash flows, and sometimes molding your business model to better fit your target market is in order.  Just remember that being stagnant in a constantly changing world will only lead to failure.

“I was set free because my greatest fear was realized. Rock bottom became the solid foundation on which I rebuilt my life. It is impossible to live without failing at something, unless you live so cautiously that you might as well have not lived at all, in which case you fail by default.”   -J.K. Rowling

If you have a problem with your car, you look for your neighborhood car mechanic.  Their sign says some variation of “auto body” or a car part, and by the grease on their fingers, you can trust that your car is in good hands.  It’s February, and you’re looking to get your income taxes completed by a professional tax preparer.  You look for a business that has “tax” or “accounting” or some other professional services trademark in the name, and you know your taxes are in good, reliable hands.  It works just like your car, right?  Nope, not quite.

In 2009, former IRS commissioner Doug Shulman called for the IRS to root out tax preparation fraud.  In 2011, the return preparer initiative began.  Prior to 2011, anybody and everybody could prepare tax returns, which was increasing the problem of erroneous returns and even tax refund fraud. 

For example, your car mechanic (in theory) could put a sign in his front yard that said “Auto Body Tax Services” and prepare income taxes for individuals and businesses alike.  The best part- he doesn’t need to know a thing about taxes.  Sometimes, the “tax professionals” didn’t know a thing about taxes.  (Just imagine all the errors in those returns.)  Other times, they knew enough about taxes and the IRS to scam millions of people out of their refunds.

In 2011, the IRS began forming stricter guidelines that held tax professionals to a higher standard of knowledge and responsibility.  They were requiring every tax preparer to pass a competency exam and fulfill 15 hours of continuing education by the end of 2013.  The sheer cost alone of the exam and education hours would deter many people from completing it, and the remainder of the non-professional tax return preparers would be eliminated simply because they wouldn’t be able to pass the exam.  This regulation meant that the remaining tax preparers would be ‘deemed fit’ by the IRS, eliminating most of the fraudulent and incompetent preparers.

However, on January 22, 2013, the IRS rescinded the new registration and training rules that had been in effect.  As tax rules are changing in this tumultuous environment, it is imperative that people choose a tax professional- CPA, lawyer, EA, RTRP, or other individuals with validating credentials. 

So how can you avoid falling into the trap of an unprofessional professional?  Ask for their credentials.  Ask them where they went to school and what for, and if they passed any examination given by the IRS.  If you were to walk into our office, we would be glad to show you that we have former accounting majors who passed IRS proficiency exams with a minimum of five years experience preparing your taxes.  And anyone who is hesitant to supply you with that information should not be trusted.    

If you want to make sure that your taxes are in the hands of professionals this year, give us a call at (570) 430-8082 to schedule a consultation or to make an appointment.

No matter where you work or what your title is, it is imperative that you are good, accurate and efficient at what you do.  But we may be wasting time without even knowing it!  According to Entrepreneur, these are the seven common things may be keeping you from reaching your maximum productivity:

Overload on administrative work.

Are you doing things you don’t like or aren’t good at, or working for hours on something that falls under someone else’s expertise?  Perhaps looking at switching responsibilities within the company could help overall functionality, efficiency, and ultimately, profitability.

Procrastinating on quick tasks.

There are some small things that every business person must do- send out that email, schedule an appointment, sign up for a meeting.  But how many times do we look at something like that and think that because it is so menial, tedious and boring, we will put it off until later?  Doing that wastes time.  If it only takes a few seconds or minutes to accomplish, then do it right away.

Micromanaging employees.

As a manager or business owner, you need to “manage” your employees, not hold their hand through every task they need to do.  I heard a saying a few days ago that goes like this: “You should trust, but verify.”  And that is how you should be able to handle your employees.  You should trust your team enough to let them to their job without spending your time walking them through each and every step, but as a manager, it is your responsibility to verify that they are staying on task and producing good work.  But verifying takes a lot less time than hand holding.

 You let daily developments drive you.

You should spend most of your day working on the growth and development of your business, not putting out fires.  Of course, things happen that must be dealt with.  But at the end of the day, this shouldn’t be what drives your schedule.

 You don’t have a clear social media strategy.

This is simple- if you don’t understand what your game plan is, then most of your time spent on social media could be wasted time.

 You try to reinvent the wheel.

Spend time on promising endeavors, and learn when to move forward with a task or project, and when to say no and walk away.  You’re not quitting- you are being strategic.

 You repeat the same things over and over.

Do you find yourself answering the same questions repeatedly?  Or having to draft similar emails each day or week?  Then create a template that can be copied and possibility edited each time it’s needed.  You’ll save a lot of time by proofreading something than you would if you had to write it from scratch.  And, you can afford to spend more time on the template than you would on each individual email or response, so odds are, the quality of your responses will increase by using a template.