Smart Money Choice$

If you are using any version of QuickBooks 2005, you need to pay attention to this.

Effective May 31, 2008, Intuit (the makers of QuickBooks financial software) will discontinue live telephone support and add-on services for QuickBooks 2005 (all versions).

This is not really surprising news, since Intuit generally supports the most current version of QuickBooks (right now, that’s 2008), plus the prior two versions (2006 and 2007). That’s why it’s a good idea to upgrade at least every three years. So if you’re still using QuickBooks 2005, now’s the time to upgrade to 2008.

If you’re the type who tends to follow the model, “If it ain’t broke, don’t fix it,” then you don’t NEED to upgrade, since the software will continue to work just fine after May 31. That is, unless you are using add-on services, such as Payroll, Merchant Services, Credit Card Download, Online Billing or QuickBooks Email. All of those services will no longer be supported from within QuickBooks 2005, even though the software will keep on working.

But what if you’re not sure which version of QuickBooks you’re currently using?

That’s easy. If you don’t see which version on the “splash” screen when you are opening the program, then from within QuickBooks simply press Ctrl+1 (from the keyboard, not the number pad) and you will get all the information about your current QuickBooks program, including which version you’re using.

An important reason to upgrade if you’re still using 2005 is because even though Intuit promises to help you out if you lose your keycodes or forget your administrator’s password for discontinued versions (it’s part of their terms and conditions), they will do so only “if that data is available.” In other words, there’s no guarantee they can help you if you are still using an old unsupported version.

This is significant, since if you are locked out of your data file because you can’t remember your administrator’s password, you’re dead. Not being able to access your financial records could literally cripple your business. Not good.

A more positive reason to upgrade from 2005, though, is because in 2006 QuickBooks underwent a major facelift and the user interface has been MUCH improved for following the proper workflow for recordkeeping ever since. That means the program is just plain easier to use. There are also quite a few enhancements and new features in the newer, supported versions, such as Time Tracking, Loan Manager and improvements in the help files.

The quickest and easiest way to upgrade is to download the new version directly from Intuit’s website; Just a few clicks and you’ll be all set.

If you want to upgrade to QuickBooks 2006 or 2007, you might be able to find them on eBay. But realize that you’ll be in the same pinch in another year or two. So my best suggestion is to just bite the bullet and upgrade to 2008 and be done with it (for three years anyway).

WANT TO USE THIS ARTICLE IN YOUR OWN BLOG OR E-ZINE? You have permission to re-publish it, as long as you include the following author’s bio and link:

Gabrielle Fontaine, PB is a freelance Professional Bookkeeper and Certified QuickBooks ProAdvisor. She specializes in assisting Internet-savvy entrepreneurs to get control of their books and maximize profits. Gabrielle also publishes the business-boosting online ezine, Smart Money Choices. Get more information at http://BookkeepingDirect.com

Here’s the latest news about how much you’ll get for the special tax rebate, and how soon you can expect to receive it.

The IRS has now published a rebate payment schedule that applies if you file your tax return by April 15. The Payment schedule is based on the last two digits of your social security number.

The IRS will begin sending rebate payments by May 2 and will continue throughout the summer. You can see when to expect your payment with this handy schedule, courtesy of the IRS.

Remember, you will get your rebate quicker if you specify direct deposit information on your 2007 tax return, since electronic rebates will be sent well before physical checks are mailed out.

The IRS has also posted a rebate calculator to help you know exactly how much your rebate will be. IRS Rebate Calculator

So file your return on time this year, and you’ll get your rebate quicker. But don’t fret if you do need to file an extension. You will still be eligible for the rebate (assuming you meet the other requirements), but the above payment schedule will not apply. Your rebate will be sent at a later date, based on when you actually file your 2007 tax return.

~Gabrielle 

As you might well imagine by now, tax season is off to a roaring start around here.  But there seems to be a positive spirit all around, for a change.

Could it be because of the “free money” the new Economic Stimulus Act that President Bush signed into law on February 13th will bring most taxpayers? If you haven’t heard the particulars yet, here’s a quick summary that will likely put a smile on your face too.

The new tax law is designed to put money into the pockets of American taxpayers to help stimulate the struggling economy. The IRS has promised to begin mailing the rebate checks by late spring and continue throughout the summertime.

The rebate amount is based on your 2007 tax return. So taxpayers who are not otherwise required to file a tax return may want to file a return this year. That’s because even if you are eligible to receive a rebate, if you don’t file a tax return for 2007, you won’t get a rebate check.

Who’s Eligible for the Rebate?

Generally, taxpayers who meet the following requirements will qualify for the rebate:

• A valid Social Security number
• Not claimed as a dependent on someone else’s tax return
• Have at least $3,000 in “qualifying” income (that includes income from wages, self-employment, Veteran’s disability and/or Social Security payments)

How Much Is The Rebate?

• The minimum rebate amount is $300 ($600 for couples filing joint returns)
• The maximum rebate amount is $600 ($1,200 for couples filing joint returns)

How Much Will You Get?

Most taxpayers will receive two notices in the mail from the IRS. The first will explain the payment program. The second will confirm your eligibility, your payment amount, and when you can expect to receive the payment. Save this notice because you will need it for the preparation of your 2008 tax return!

If you are receiving a refund on your 2007 tax return and elected to get your refund via direct deposit, your rebate will also be directly deposited into the same bank account. Otherwise, you will get a check in the mail.

Parents Get an Additional Child Credit

If you receive at least $1 of the rebate, you will also receive an additional $300 for each qualifying child. To qualify, a child must be eligible under the Child Tax Credit and have a valid Social Security number.

Businesses Get A Break In 2008

For 2008, this same tax law will give the following reductions to your business tax burden:

• Section 179 expensing limit increases to $250,000
• Special bonus depreciation of 50% will be available on certain property, including software and leasehold improvements.
• Bonus depreciation will be allowed under the alternative minimum tax (AMT) as well.

As is always the case, there are a lot of little details in this new tax law, so if you want to get into more of the nitty gritty, here’s where you can get it:

• Fact Sheet – Sample Scenarios of How The Rebate Will Work (PDF document)
• IRS Rebate Info Center – All the up-to-date details from Uncle Sam himself
• News Briefling Audio – Save time and listen to the February 22nd news briefing right from your computer (MP3 file)

So be sure to file your 2007 tax return on time this year, and get your rebate money as soon as May!

That’s a question we all get asked at least occassionally.  But how you choose to answer it can have a significant effect on your bottom line.

I’m very pleased to announce that that’s why I’ll be hosting a brand new teleseminar, “Effective Networking Made Easy” next week on January 8th with my special guest, Networking Expert Karen Frank.

I’m making this live training class available to you at no charge because I know that having a simple yet effective way to introduce yourself and master the art of networking will help you jump into 2008 with one of the most powerful marketing tools known to man – word of mouth.

To register for this special event, or to learn more about the class, go to: www.bookkeepingdirect.com/networking/

We’re now in the last week of the year, and as we get ready to bid 2007 good-bye, there are a few smart choices that might be right for you when it comes to saving taxes. Here are four quick tips you can use this week (before December 31st) that may help lower your tax bill come April 2008:

1. Clean up your portfolio – We all should keep an eye on how our investments are doing throughout the year, but getting rid of the deadweight in your portfolio now can at least provide some tax benefits to ease the disappointment.
           
   Sell off your mutual funds and stocks that are not performing well to reduce your taxable income. Capital losses are first applied against capital gains, and then up to $3,000 in lossees can be applied to ordinary income. If you have more than $3,000 in capital losses, it will be carried forward to future years until it has been used up.
           
   Hold off until at least January, though, before selling any stocks on which you might realize a gain if you expect to be in one of the two lowest tax brackets (10% and 15%) in 2008. Next year taxpayers will pay no taxes (0%) on profits from the sale of assets they have owned for more than a year.
           
2. Buy what your business needs now – If there is any software or equipment you know your business will be needing soon, buy it before New Years hits, even if you have to put it on a credit card. Also, if you have any unpaid business bills, pay them off before December 31st. You can claim the expense on your 2007 tax return to help reduce your income tax bill. If you are a sole proprietor (filing a Schedule C), this strategy does double duty because it will help to reduce the big bite self-employment taxes takes out of your bank account too.
        
3. Pay State and Local Estimated Taxes – If you’ve been paying quarterly estimated taxes to your state and/or local taxing authorities, and you itemize on your individual tax return (file a Schedule A), then you should consider paying the 4th quarter payment before the end of the year, instead of waiting for the January 15th due date. State and local income taxes are deductible in the year they are actually paid. By making your last payment by the end of this year, you will get that much more to deduct for 2007.
         
4. Remember To Take Your Required Minimum Distribution (RMD) – If you are over 70 1/2 years old and have an IRA account (including SEP IRAs), be sure to take your RMD by December 31st or you may be subject to a nasty penalty.

As always, be sure to consult your tax professional before doing anything you are not absolutely sure will bring you maximum tax benefit. Everyone’s tax situation is different. In fact, contacting your tax person before year end is itself a smart choice, since s/he may be able to suggest other tax-savings strategies that are perfect for your situation.