Client Tax Letters Mailed December 2011
1040 Clients Letter December 2011
NEW PROCEDURES FOR 2011
I NEED YOUR EMAIL IN ORDER TO SECURELY SEND YOUR 2011 TAX DOCUMENTS.
SEND YOUR CURRENT EMAIL ADDRESS TO: email@example.com.
Income tax time is just around the corner and we just made it easier for you to complete the 2011 tax returns.
2011 has been a very exciting year at Townsley & Associates. Most notably I am continuing my alliance with Prudential giving me, and you, access to a team of insurance and financial advisors at no cost. My goal as your tax preparer and advisor is to look at your entire financial picture and to date this has been an absolute success for my clients and their families.
This tax season we are implementing a couple software and policy changes designed to assist both of us with preparation of accurate and timely filed tax returns. This year we will be utilizing ShareFile software for email communication and will require ALL clients fill out and sign a tax organizer. I know you’re going to like these changes as I’ve already received a lot of positive feedback.
ShareFile is a critical implementation because internet security is a major concern therefore we will no longer be able to send or receive emails containing tax information UNLESS the documents are sent as an attachment via ShareFile. ShareFile encrypts attachments and gives both the sender and receiver a secure link to download the documents. Please don't send ANY sensitive information in the body of an email use the attachment function and send the email to us through ShareFile.
I will be sending you email instructions for ShareFile as soon as I have an updated email address. It's important that you verify your email now so we can start utilizing ShareFile's secure connection.
Send your preferred email to: firstname.lastname@example.org
The second change this year is we are requiring that every taxpayer complete and sign an organizer before we prepare the tax return. Utilizing the organizer will help ensure we have all pertinent tax information and greatly reduce the risk of errors. Organizers will be sent by email through ShareFile or if you prefer can be picked up at my office. Please call or email me so we have a copy ready for pickup. Using the organizer will eliminate extra phone calls or trips back to our office and greatly reduce the risk either of us will omit anything from the tax return.
As noted above I need to get an updated email address from you so we can send out the organizers and get started.
Send your preferred email to: email@example.com
I think you'll find the benefit of these changes to be substantial. Now you can scan the completed organizer, attach it to an email, and send it to us securely through the ShareFile software. You eliminate the task of stopping by the office with documents and we reduce the time it takes to prepare your return. All you have to do is email the organizer, and all supporting documents, including W-2 and 1099 statements and we’ll take it from there. Please note I am willing to do this for current clients only at this time.
If you are unable to scan and email the documents you can still mail them or drop them off at the office at any time without an appointment. If you prefer to schedule a tax-preparation appointment I 'm happy to do so as I still require we discuss any changes from last year or concerns you have about this year affecting your tax return.
I appreciate your trust in our business. Please feel free to contact me at 303-688-1348 if you have any questions or need additional information.
1120S Corporation Letters
Income tax time is just around the corner! We appreciated the opportunity to prepare your 2010
An S Corporation has several items governed by law and must be handled properly at year end. Please review the following and remember this is not intended to be all inclusive please call or schedule an appointment if you have other concerns.
Here are a few important items:
The health and accident insurance premiums paid on behalf of a 2% (or more) shareholder/employee are deductible by the S Corp as a fringe benefit AND are reportable as wages for income tax withholding purposes on the W2. If you want to deduct the cost of health care premiums you must report the amount on a W2. YOUR PAYROLL PROVIDER WILL NEED THIS AMOUNT BEFORE YEAR-END. Also life insurance is only deductable as a business expense if the company is the beneficiary.
As a shareholder of an S Corp, you are required under law to take a reasonable compensation in wages as payroll. That means payroll should be processed before year end and quarterly payroll reporting should be done throughout the year even if you take no payroll during that quarter. I will no longer sign a tax return which does not report a reasonable salary via a W-2 for a shareholder/owner who works for the business.
New this year for 1099 from Credit card transactions. If you accept credit cards as a method of payment for your goods and services, you should receive a 1099-K form from your merchant service provider. Please forward it to us. We will be required on the 2011 tax returns to separate credit/debit card sales from cash sales. If you do not receive a 1099-K you still need to let us know your total credit card receipts.
On March 23, 2010, the Patient Protection and Affordable Care Act was signed into law. As a result of this law, employers must disclose the value of the benefits they provide beginning in 2012 for each employee’s health insurance coverage on the employees’ annual W-2 Form. This requirement was originally to be effective January 1, 2011 but was postponed by the IRS until 2012.
A proper set of books must be maintained which includes a profit and loss and balance sheet. If you use a computerized accounting software such as QuickBooks, Quicken or Peachtree, the bank accounts and credit card accounts are to be reconciled to the yearend statements OR the next statement which includes all year end transactions.
Please remember these items regarding bookkeeping as well:
Assets should be recorded on the balance sheet and we need purchase and or loan documents for any new assets purchased.
All liabilities, including credit cards, payroll taxes and sales taxes which will be paid in the next year are to be listed as liabilities at year end.
A detailed record of any personal money either put into the company (including credit cards) or taken out of the company should be provided.
A 1099 MISC needs to be issued to anyone who is not a corporation and provides $600 or more in services to your company. You should have on file a W9 for any vendor that provides services to you even if a corporation or the amount is under $600. A W9 form can be obtained on line at irs.gov or by contacting our office. The IRS may issue penalties for not complying with the 1099 requirements.
A log and receipt showing who, what and when must be kept for any meal or entertainment for business purposes.
A written log or some other proof must be kept to support a mileage deduction.
Please keep in mind that your company is a corporation and is its own entity, therefore business and personal funds including credit cards should not be comingled.
Providing well organized and accurate information will ensure you receive a timely filed and accurate income tax return. Please keep in mind the cost of preparing a tax return does not include bank or credit card account reconciliation, bookkeeping, or payroll processing. Due to the time constraints of the tax season I must charge per hour for services which are outside of the tax return engagement. Please don’t hesitate to ask if you have any questions regarding billing or what to expect this year.
Townsley and Associates, PC can assist in the setup, maintenance, or training for QuickBooks. We also provide full service bookkeeping on a monthly basis. We have partnered with payroll providers to offer you a discount off their regular price. We also prepare 1099’s, payroll reports, sales tax, financial statements. If you are in need of anything to wrap up year-end requirements please call now to ensure you don’t miss anything.