Tips and Tricks to Help You Better Use QuickBooks. | Hawkins Ash CPAs
In this edition
December 2019

Sales Tax in QuickBooks Online

2020 Key Tax Fact Sheet

Software Lifecycles and How They Affect You

Fraud Scheme Targeting Payroll

6 Year-End Must Do’s
Sales Tax in QuickBooks Online
Collecting and remitting sales tax with QuickBooks Online does not need to be difficult! To enable sales tax within QuickBooks online just follow a few simple steps:

  1. Navigate to the Sales Tax Center – Click Taxes in the left-hand navigation
  2. If there are no rates set up, click on Set Up Sales Tax Rates
  3. Follow the wizard to complete the information about your company and sales tax rates

After setting up the rates, go to your item lists and select whether or not each item should be taxable. You can also override the sales tax at the invoice level if needed.
Edit your customer “Tax Info” to mark the customer taxable and enter their default tax code.  

Preparing your sales tax return is a four part process in QuickBooks Online.

  1. Select Taxes from the left menu
  2. Ensure Sales Tax is shown at the top (If you use payroll you may need to select Sales Tax)
  3. Next to Sales Tax at the top find the tax agency associated with the return you’d like to prepare
  4. On the Returns tab, select Prepare Return
  5. Verify the dates populated in the Start Date and End Date fields are correct
  6. Review the lines of the sales tax return with the balance owing (or refund due) at the bottom
  7. To see individual transactions, click the dollar amount
  8. To make an adjustment to a line on the sales tax return, select Adjust

The next step is to submit your sales tax return online via the Department of Revenue’s website. Use the information provided by QuickBooks Online to complete the return. Schedule the payment for the due date, then return to QuickBooks Online. Click on the balance of the tax to pay and click Record Tax Payment. 

To close the sales tax period in QuickBooks Online:

  1. On the Prepare Sales Tax Return page, select Mark as filed, then select Continue
  2. QuickBooks online creates a bill for the amount owing to the tax agency (the bill is created as a payable in your Chart of Accounts, so won’t appear in the Enter Bills window)

To record the payment in QuickBooks Online:

  1. Choose Filed from the All returns drop-down
  2. Select Record payment from the drop-down in the Action column
  3. Select the appropriate Payment type
  4. Enter the payment date
  5. Once you make the payment, you’ll see it in your Account History

Contact: Christiana Lind , QuickBooks Online ProAdvisor
Direct: 507.252.6683
Email: clind@hawkinsashcpas.com
2020 Key Tax Fact Sheet
Download our 2020 Key Tax Fact Sheet to ensure you’re up to date. Rates included:

  • Social Security, Medicare and Federal Unemployment Rates
  • WI and MN Unemployment Rates
  • Federal Minimum Wage
  • Mileage Rates
  • Retirement and IRA Contribution Limits
  • Health Savings Accounts Contribution Limits
Software Lifecycles and How They Affect You
Software systems are envisioned, developed, released, maintained and then retired; making way for new versions that support new features and enhanced security. As your trusted business partner, Hawkins Ash is only able to maintain support and operation of software versions that the vendor will stand behind and also offer support for. While we can work with reports and systems from some older versions, it does increase the time and cost necessary to provide our clients with the best service. We encourage our clients to maintain currently supported software, as this makes the best business sense overall. 

Current software upgrades not only support new features but also better security. Older versions of software may work with a newer system, but it is usually in a limited capacity. I personally have an old program that was written in 1992 that helps pick names for our Christmas gift exchange, but it is a simple, single function program. With complex systems required for your accounting needs that provide protection of your sensitive data, it is critical that every security flaw or hole discovered is properly patched and protected. You can achieve this by keeping your software updated.

On January 14, 2020 Microsoft ends support and security updates for Windows 7, their primary operating system since 2009. Windows 10 is the direction Microsoft is taking its flagship product, and everyone who works on that ship moves forward with it. Intuit, Sage, and all the other software developers out there have to make a choice: spend money supporting and developing for a system that has no future or focus on new advancements and resources that customers are asking for. Intuit has had a long standing practice of supporting the current and past two versions of QuickBooks. Sage only supports the current and past one version of Sage 50 (Peachtree). 

Please see the links below for the FAQ of software lifecycles from Sage and Quickbooks.

If you have any questions about software updates, contact your Hawkins Ash representative.
Bob Spencer

Contact: Bob Spencer, IT Manager
Direct: 608.793.3111
Email: bspencer@hawkinsashcpas.com
Fraud Scheme Targeting Payroll
Cybercrimes against businesses have been increasing at a steady pace. We have heard of various companies being targeted, and we want to make our clients aware.
Scammers are targeting the HR functions or bookkeepers of all types of businesses with the goal of convincing them to change direct deposit information to fraudulent bank accounts.

The Scams
Scammers send an email impersonating an employee – often an executive or business owner – to the bookkeeper or person in charge of payroll. Typically, this email poses as the personal email of the employee. The scammer asks to change his/her bank deposit information. The payroll person or HR person responds to this personal email address (fraudulent account) with the form needed to change the direct deposit information. The scammer completes the form with an offshore account or other untraceable bank account and sends the form back to HR. The HR person changes the bank information in the payroll system. When the next paycheck is issued, the money goes into the fraudulent account. By the time this is discovered by the employee and/or the payroll or HR person who made the change, it is too late.

Another scam involves wire transfers or vendor payments. The email impersonates a company executive and is sent to the company employee responsible for wire transfers. The email requests a wire transfer be made to a specific account that is controlled by the scammer. The employee makes the wire transfer, and the funds are gone.

What You Can Do
It is important to discuss these scams with all levels of employees. Make everyone aware of them so no one falls victim to them. You can have training on IT security, but human error still exists and can cause this scam to be successful.

  • Train employees, especially those with any access to payroll records or bank information, to question the email if the request doesn’t make sense.
  • Initiate a policy that states HR or payroll needs to speak with the person who the email supposedly came from in person or via phone before any changes are made.
  • Require that all direct deposit form changes include some personal information that a scammer will not know (example: Employee ID#).
  • Require the form be signed and returned via mail or in-person to the HR department versus allowing everything to be done via email.

It is very important to talk to employees about what procedures are in place when they get these direct email requests. If the owner tells an employee to do something, they will typically do it. This is why the scam is so successful. If you have talked about the situation ahead of time, employees may be more apt to make that phone call to verify it is not fraudulent versus going ahead and doing what they are told to do without asking questions.

Remember: Your company’s security is only as good as your weakest link.

Contact: Monica Hauser, CPA, Partner
Direct: 608.793.3142
Email: mhauser@hawkinsashcpas.com
6 Year-End Must Do’s
Keeping your financial records in order is very important to the success of your business and ensures that your financial statements are accurate. Follow these steps to make the close of your fiscal year easy to execute.

1.) Review your profit and loss statements in mid-December.
What does your revenue look like now that the year is almost over? Do you anticipate future invoices or expenses to greatly affect your profit? If your profit is large, talk to your tax advisor to see if there are ways to lessen your tax burden.

2.) Verify your vendor and lender files.
Review information relating to any current outstanding loans. Verify vendor 1099 information is up-to-date and that you have accurate W-9 Forms. Forms 1099 and 1096 are due to the IRS by 1/31/2020. These forms are due to Minnesota and Wisconsin by 1/31/2020 – if you file 10 or more 1099 forms, you must file electronically for both states.

3.) Take inventory.
If you sell products, take a physical inventory and compare the results to the QuickBooks Inventory Valuation Report. Make any necessary adjustments in QuickBooks. Also, be sure to review your sales and use tax records so you are prepared to complete your annual/quarterly sales tax filings.

4.) Reconcile all of your accounts and review A/P, A/R & Fixed Assets.
  • Reconcile your credit card and bank accounts. Verify the statements match your records and investigate any unexplained discrepancies.
  • Uncleared transactions older than six months should be reviewed. Verify these are actual transactions and not duplicates. If you have uncashed checks, review the Unclaimed Property rules for your state.
  • Review A/P for unapplied credits.
  • Review A/R for unapplied credits. Write-off outstanding receivables that are considered to be uncollectible.
  • Prepare a list of equipment, vehicles and/or fixtures that were acquired or disposed of during the year for your accountant. If a single item was valued at $2,500 or more, the item should be entered as a fixed asset and not expensed.

5.) Review and update employee info.
  • Run reports for year-end (Employee Details, Payroll Details, Wage and Tax Summary).
  • Confirm your employees’ social security numbers, legal names, and current addresses.
  • Make sure all employee paychecks have been recorded (handwritten, termination, commission, and bonus checks). Verify employees’ wages and benefits are correct.
  • Review sick and vacation policy settings, confirm sick and vacation hours used.
  • Review tax rates and settings.
  • Update state unemployment insurance (SUI) rates effective 1/1/2020.
  • Review and update any federal or state deposit schedules.
  • Prepare and file payroll tax forms (940, 941, W-2’s and W-3) by 1/31/2020.
  • Distribute employee W-2s by 1/31/2020 for Wisconsin and Minnesota.

6.) Create a budget for the next year.
Review your financial statements from the current year and create a budget to plan for the next year. By taking stock of your expenditures from the current year, you’ll have a better understanding of where to focus your efforts moving forward.

Contact: Debbie Denny , Advanced Certified QuickBooks ProAdvisor
Direct: 920.337.4558
Email: ddenny@hawkinsashcpas.com
More Resources from CPA-HQ
Podcast: Work Opportunity Tax Credit
Hiring individuals from these targeted groups can fill a need and save some taxes for your business. Listen in and learn more!

Employee Benefit Plan and IRA Quick Reference Table
Communications that specify benefit plan limits should be reviewed for accuracy before materials are given to participants.

New Overtime Rules Effective January 1, 2020
The DOL has released new overtime regulations detailed in the Fair Labor Standards Act (FLSA). These new regulations may affect you and your business.
Hawkins Ash CPAs
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