Shoppes Bookkeeping & Tax Service Inc

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The six-month extension deadline on 2009 income tax returns is quickly approaching. To avoid incurring additional penalties or fees, federal and state tax returns for the must be filed by Friday, Oct. 15.
Remember, as we stated in April, an extension of time to file was not an extension of time to pay. You will owe interest on any pastdue tax and you may be subject to a latepayment penalty if payment was not made. However, by filing by Oct. 15, you can minimize those extra penalties and fees.

3rd quarter estimated tax payments due for 2010 tax year.
Final deadline to file corporate tax returns if an extension was requested. (Forms 1120, 1120A, 1120S).
Final deadline to file trust tax returns (Form 1041) if an extension was requested.
Final deadline to file partnership tax returns (Form 1065) if an extension was requested.

As an aid to determining whether an individual is an employee under the common law rules, twenty factors or elements have been identified as indicating whether sufficient control is present to establish an employer-employee relationship.
The twenty factors have been developed based on an examination of cases and rulings considering whether an individual is an employee. The degree of importance of each factor varies depending on the occupation and the factual context in which the services are performed.
The twenty factors are designed only as guides for determining whether an individual is an employee; special scrutiny is required in applying the twenty factors to assure that formalistic aspects of an arrangement designed to achieve a particular status do not obscure the substance of the arrangement (that is, whether the person or persons for whom the services are performed exercise sufficient control over the individual for the individual to be classified as an employee).
The twenty factors are described below:
1. Instructions. A worker who is required to comply with other persons’ instructions about when, where, and how he or she is to work is ordinarily an employee. This control factor is present if the person or persons for whom the services are performed have the right to require compliance with instructions.
2. Training. Training a worker by requiring an experienced employee to work with the worker, by corresponding with the worker, by requiring the worker to attend meetings, or by using other methods, indicates that the person or persons for whom the services are performed want the services performed in a particular method or manner.
3. Integration. Integration of the worker’s services into the business operation generally shows that the worker is subject to direction and control. When the success or continuation of a business depends to an appreciable degree upon the performance of certain services, the workers who perform those services must necessarily be subject to a certain amount of control by the owner of the business.
4. Services Rendered Personally. If the services must be rendered personally presumably the person or persons for whom the services are performed are interested in the methods used to accomplish the work as well as in the result.
5. Hiring, Supervising, and Paying Assistants. If the person or persons for whom the services are performed hire, supervise, and pay assistants, that factor generally shows control over the workers on the job. However, if one worker hired supervises, and pays the other assistant pursuant to a contract under which the worker agrees to provide materials and labor and under which the worker is responsible only for the attainment of a result, this factor indicates an independent contractor status.
6. Continuing Relationship. A continuing relationship between the worker and the person or persons for whom the services are performed indicates that an employer-employee relationship exists. A continuing relationship may exist where work is performed at frequently recurring although irregular intervals.
7. Set Hours of Work. The establishment of set hours of work by the person or persons for whom the services are performed is a factor indicating control
8. Full Time Required. If the worker must devote substantially full time to the business of the person or persons for whom the services are performed, such person or persons have control over the amount of time the worker spends working and impliedly restrict the worker from doing other gainful work. An independent contractor, on the other hand, is free to work when and for whom he or she chooses
9. Doing Work on Employer’s Premises. If the work is performed on the premises of the person or persons for whom the services are performed, that factor suggests control over the worker, especially if the work could be done elsewhere. Rev. Rul. 56-660, 1956-2 C.B. 693. Work done off the premises of the person or persons receiving the services, such as the office worker, indicates some freedom from control. However, this fact by itself does not mean that the worker is not an employee. The importance of this factor depends on the nature of the service involved and the extent to which an employer generally would require that employees perform such services on the employer’s premises. Control over the place of work is indicated when the person or persons for whom the services are performed have the right to compel the worker to travel a designated route to canvass a territory within a certain time, or to work at specific places as required.
10. Order or Sequence Set. If a worker must perform services in the order or sequence set by the person or persons for whom the services are performed, that factor shows that the worker is not free to follow the worker’s own pattern of work but must follow the established routines and schedules of the person or persons for whom the services are performed. Often, because of the nature of an occupation, the person or persons for whom the services are being performed do not set the order of the services or set the order infrequently. It is sufficient to show control, however, if such person or persons retain the right to do so..
11. Oral or Written Reports. A requirement that the worker submit regular or written reports to the person or persons for whom the services are performed indicates a degree of control.
12. Payment by Hour, Week, Month. Payment by the hour, week, or month generally points to an employer-employee relationship, provided that this method of payment is not just a convenient way of paying a lump sum agreed upon as the cost of a job. Payment made by the job or on a straight commission generally indicates that the worker is an independent contractor.
13. Payment of Business and/or Traveling Expenses. If the person or persons for whom the services are performed ordinarily pay the worker’s business and/or traveling expenses, the worker is ordinarily an employee. An employer, to be able to control expenses, generally retains the right to regulate and direct the worker’s business activities.
14. Furnishing of Tools and Materials. The fact that the person or persons for whom the services are performed furnish significant tools, materials, and other equipment tends to show the existence of an employer-employee relationship.
15. Significant Investment. If the worker invests in facilities that are used by the worker in performing services and are not typically maintained by employees (such as the maintenance of an office rented at fair value from an unrelated party), that factor tends to indicate that the worker is an independent contractor. On the other hand, lack of investment in facilities indicates dependence on the person or persons for whom the services are performed for such facilities and, accordingly, the existence of an employer-employee relationship.
16. Realization of Profit or Loss. A worker who can realize a profit or suffer a loss as a result of the worker’s services (in addition to the profit or loss ordinarily realized by employees) is generally an independent contractor, but the worker who cannot is an employee. See Rev. Rul 70-309. For example, if the worker is subject to a real risk of economic loss due to significant investments or a bona fide liability for expenses, such as salary payments to unrelated employees, that factor indicates that the worker is an independent contractor. The risk that a worker will not receive payment for his or her services, however, is common to both independent contractors and employees and thus does not constitute a sufficient economic risk to support treatment as an independent contractor.
17. Working for More Than One Firm at a Time. If a worker performs more than de minimis services for a multiple of unrelated persons or firms at the same time, that factor generally indicates that the worker is an independent contractor.
18. Making Service Available to General Public. The fact that a worker makes his or her services available to the general public on a regular and consistent basis indicates an independent contractor relationship.
19. Right to Discharge. The right to discharge a worker is a factor indicating that the worker is an employee and the person possessing the right is an employer. An employer exercises control through the threat of dismissal, which causes the worker to obey the employer’s instructions. An independent contractor, on the other hand, cannot be fired so long as the independent contractor produces a result that meets the contract specifications.
20. Right to Terminate. If the worker has the right to end his or her relationship with the person for whom the services are performed at any time he or she wishes without incurring liability, that factor indicates an employer-employee relationship.

As of August 17, 2010, Schoppe’s Bookkkeeping & Tax Service is an Accredited business with the Better Business Bureau.
From the BBB site: If a business has been accredited by BBB, it means BBB has determined that the business meets BBB accreditation standards, which include a commitment to make a good faith effort to resolve any consumer complaints. BBB Accredited Businesses pay a fee for accreditation review/monitoring and for support of BBB services to the public.
BBB accreditation does not mean that the business’ products or services have been evaluated or endorsed by BBB, or that BBB has made a determination as to the business’ product quality or competency in performing services.
Businesses are under no obligation to seek BBB accreditation, and some businesses are not accredited because they have not sought BBB accreditation.

BuildTrust - Establish and maintain a positive track record in the marketplace.
Advertise Honestly - Adhere to established standards of advertising and selling.
Tell the Truth – Honestly represent products and services, including clear and adequate disclosures of all material terms.
Be Transparent – Openly identify the nature, location, and ownership of the business, and clearly disclose all policies, guarantees and procedures that bear on a customers decision to buy.
Honor Promises – Abide by all written agreements and verbal representations.
Be Responsive – Address marketplace disputes quickly, professionally, and in good faith.
Safeguard Privacy – Protect any data collected against mishandling and fraud, collect personal information only as needed, and respect the preferences of consumers regarding theuse of their information.
Embody Integrity – Approach all business dealings, marketplace transactions and commitments with integrity.

Over the last couple of months, we’ve been working hard on getting settled at our new location. Here are a few photos from our new office:

For directions to our new location visit our Directions page. For more photos of the progress of our move, visit out Facebook photo album. (Don’t forget to “Like” us!)

For the last several years, Schoppe’s Bookkeeping & Tax Service has sponsored a little league softball or baseball team. For the second year in a row, we sponsored our granddaughter’s softball team, KaBoom.
Below are a few photos from closing ceremonies on June 12, 2010

Effective June 1st, we will be in a new location. We will now be found at 508 W. Tyson in Cameron. We are still in the process of setting up our new building, and we invite you to follow our progress on our Facebook page. Our goal is to be able to serve our clients more effectively and efficiently with this change.
Our phone number, fax number and email addresses, etc. will remain the same. As we make our move, it IS possible our phones could be down for as much as a day as the number transfers from our old location to our new location. Email will remain an excellent way to get in touch with us if that should happen, and we definitely want to hear from you!
We are still here for all your income tax and bookkeeping needs… we’re just going to be in an all new location. Stay tuned!!

Business Week recently ran an article full of tax advice from a former IRS Auditor.
The biggest point made in the article: Small businesses are more likely to be audited that individuals, due to the ease of small businesses to understate their income and overstate their write-offs.

…the IRS devotes the greatest share of its enforcement budget41 percent in 2006toward small businesses. The agency in recent years has tried to increase compliance through education and enforcement. The Schedule C, which sole proprietors use to report income, is the single most audited business form, says Jeff Collins, a tax attorney and former IRS auditor in Schaumburg, Ill.

Small business owners should not worry about audits as long as they report everything accurately. The article lists out 25 common slip-ups that an audit will catch, and that if these are avoided… an audit should not be anything to stress over.
Among the items in the list: classify your employees properly (independent contractors versus employee), pay your payroll taxes on time and correctly, keep careful and detailed records of your expenses and income — proof of both of these are key in an audit, keep detailed mileage logs and don’t deduct more vehicle expenses than you’re entitled to take, and be careful about what you designate as “other expenses.”
The article is an excellent read, and taking the time to go through all the common tax-mistakes could end up saving you thousands of dollars down the road.
http://www.businessweek.com/smallbiz/content/mar2009/sb20090317_698989.htm

A recent article in the New York Times states that, “As many as 400,000 nonprofit organizations are weeks away from a doomsday.”
Turns out that a provision in a 2006 federal bill regarding pension reform, the Pension Protection Act, will revoke the tax exemptions of non-profit groups that fail to file tax forms for three consecutive years.

LOSS OF EXEMPT STATUS FOR FAILURE TO FILE RETURN OR NOTICE.
(1) IN GENERAL.If an organization described in subsection (a)(1) or (i) fails to file an annual return or notice required under either subsection for 3 consecutive years, such organizations status as an organization exempt from tax under section 501(a) shall be considered revoked on and after the date set by the Secretary for the filing of the third annual return or notice. The Secretary shall publish and maintain a list of any organization the status of which is so revoked.
(2) APPLICATION NECESSARY FOR REINSTATEMENT.Any organization the tax-exempt status of which is revoked under paragraph (1) must apply in order to obtain reinstatement of such status regardless of whether such organization was originally required to make such an application.

This means that May 16, 2010 is the date in which non-profits that failed to file the last three years consecutively will lose tax breaks. However, according to the New York Times article, the IRS did take measures to help non-profits avoid losing their status:

The I.R.S. would rather not revoke exemptions, either, and it has made a Herculean effort to let organizations at risk know it. For example, in 2007, it sent 665,000 letters to nonprofit groups that fell below the $25,000 threshold and those above that level that had not filed.
Lois G. Lerner, director of the exempt organizations division of the I.R.S, said that while groups would lose their exemptions effective May 16, the I.R.S. would probably not send out notices until January to give nonprofits a chance to bring themselves into compliance with the law.

By this time next week, it will be all over. April 15th will have passed, and with it the deadline to file your 2009 Income Tax Return. If you find yourself unable to get your return completed by that deadline, you can file for a Extension.
However, an extension of time to file is not an extension of time to pay. You will owe interest on any pastdue tax and you may be subject to a latepayment penalty if payment is not made timely.
To receive an automatic 6-month extension of time to file your return, you can file Form 4868 (PDF), Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, by the due date of your return. There are three choices for filing Form 4868 ; 1) electronically (such as by computer), 2) by paying part of your tax due with a credit card through an outside service provider listed on the form, or 3) by mail.
If you file your Form 4868 electronically you will receive an acknowledgement or confirmation number for your records and you do not need to mail in Form 4868.
If you need to pay additional taxes, you may do so through the outside service provider or through e-file. You can refer to your tax software or tax professional for ways to file electronically using e-file services. If you wish to make a payment using the electronic funds withdrawal option, be sure to have a copy of last year’s tax return. You will be asked to provide the Adjusted Gross Income from the return for taxpayer verification.
Besides filing electronically, you can generally get an extension of time to file if you pay part or all of your estimate of income tax due by credit card. You may pay by phone or Internet through one of the service providers listed on Form 4868. Each service provider will charge a convenience fee based on the amount of the tax payment. At the completion of the transaction, you will receive a confirmation number for your records.
In addition to filing Form 4868 electronically, or by paying part of your tax by credit card, you can file Form 4868 by filling out the form and mailing it to the place where you will file your return.
Please be aware that an extension of time to file is NOT an extension of time to pay.
If you are a United States citizen or resident alien, who is either: (1) living outside of the United States and Puerto Rico and your main place of business or post of duty is outside of the United States and Puerto Rico; or (2) in military or naval services on duty outside of the United States and Puerto Rico on the due date of your return, you are allowed an automatic 2month extension until June 15 to file your return and pay any tax due.
For additional information refer to Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. If you use this automatic 2month extension, you must attach a statement to your return explaining which of the two situations qualify you for the extension.
If you are serving in a combat zone or in a contingency operation (or are hospitalized as a result of an injury received while serving in such an area or operation), you have at least 180 days after you leave the designated combat zone/contingency operation to file and pay taxes. See Publication 3, Armed Forces’ Tax Guide.
If you are determined by the Service to be affected by a Presidentially declared disaster or a terroristic or military action, then you may have up to one year after the due date of your return to file and pay taxes, depending on the deadline specified by the Service.
For more information:

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