You might be surprised how often people get hung up in legal or financial red tape or run afoul of the IRS after acting on a professional’s bad advice. Sapurstein & Associates is asked to undo damage brought on by such scenarios. IRS penalties and re-filing taxes is expensive and no fun. Don’t let poor financial or accounting advice get you on the wrong side of the IRS.

Case in point:

A professional’s bad advice got a couple in trouble recently. At retirement, a couple transferred their 401(k) balances into IRAs. Their financial adviser said they should take the amounts in their IRAs and roll them back into their former employer’s plan because IRAs are not exempt from bankruptcy creditors. That advice was just plain wrong. After tapping their IRAs, they learned they were ineligible to make rollovers because they no longer were plan participants. By the time they tried to return the money to their IRAs, the 60-day rollover period had lapsed. The IRS, however, when provided proof of this advice, allowed the couple additional rollover period time, since their failure was due to bad advice.

When you get professional legal or financial counsel, it’s always a good idea to check out the credentials of the professional in question. Go to the US Security and Exchange Commission to vet your investment advisor or broker. You can also Google the advice you get and check it against other on line sources or go to the AARP site, and do a search.

The authorized tax practitioners at Sapurstein & Associates are ready to help you with any problems you encounter with the IRS – even through no fault of your own. Got a question about taxes? Ask us.

Sapurstein & Associates on Benefit Plans Good news! The CPAs at Sapurstein & Associates are pleased to report a break for small firms on reporting the value of health coverage on their W-2s. The IRS has already suspended the reporting rule for 2011 W-2s that will be filed in early 2012. That relief applies to all employers. The IRS now says firms filing fewer than 250 W-2s needn’t report the value on W-2s for 2012. Larger employers will not be exempted from the 2012 requirement to report health coverage on the 2012 W-2’s. You should know that even when the value of the coverage is shown on the W-2, it won’t be included in employees’ incomes. Congress added the reporting rule so employees will have a better appreciation of the amount that their employers spend on their health insurance coverage. IRS Notice 2011-28 has the complete details on how business firms should comply, including precise information on how to compute the value of benefits. If your firm needs more information to help evaluate these regulations, give Sapurstein & Associates a call (317) 706-0958. We can help you understand how to apply W-2 form values and reporting regulations to your business, and answer any questions you may have.

August 2010 Newsletter

It’s really surprising how much we hear this frustrating lament at Sapurstein & Associates.

Many small businesses buy an “out of the box” software program geared for the “typical business” – (whatever that is!) — but don’t know how to set up the program to work for the highly individual needs of their business. So they call us, frustrated with their purchase because the program just doesn’t suit the workings of their business.

Have you noticed why this is? First of all, the chart of accounts in most financial planning software programs is listed alphabetically. Seems fair enough until you try to implement it. Does you business run in alphabetical order? Of course not! You want like-minded expenses grouped together so you can see what you are spending for, say, business travel and entertainment – side by side – instead of having to search for Entertainment Expenses on line 10 and Travel Expenses way down on line 45.

That’s where our small business set up expertise comes into play. Our experience with many types of businesses helps us set up your books in intuitive ways that help your bookkeeping efficiency. We know QuickBooks™, PeachTree Accounting Software™, and many other bookkeeping software programs, inside and out. We know what questions to ask to get to the heart of what your books need to be able to relay back to you, without a lot of searching and head-scratching.

So next time you need help, give us a call for answers that make sense for your business.

-Lew of the Sapurstein blog team