Archives for June 2013

How to Prepare for an Audit

This is the time of year that the IRS conducts tax audits. While it can be scary, there are ways to prepare before the audit. If you are meeting the auditor in person there are a few things you should prepare ahead of time.

Before the Audit

Whether you are meeting an auditor by yourself or with a professional, it is important to be prepared. Find all records that relate to and back up your tax return. The IRS has the right to look any records used to prepare your tax return, so to make it easy. Organize the records use to prepare your tax return. This will also help refresh your memory before the audit meeting.

Remember that neatness counts. The more receipts the auditor goes through, the more chances they will find something else. Auditors tend to reward good recordkeeping and give the benefit of doubt if any problem arises. Pinpoint potential problems and be able to show why your right to take a deduction. Do some research, if necessary.

What to Bring to the Audit

A successful audit is backing up your tax return with documentation. Proof should be in writing, even though auditors are allowed to accept oral explanations. You should bring bank statements, canceled checks, and receipts. Also electronic records, ledgers, journals, and printout of any computer data will also make it easier to show proof. Do not make the IRS guess because they will assume guilt. Anything that will help give proof should be available for the auditor to review.

It is important to stay calm and be prepared to answer any questions the auditor would ask. The success of the audit depends on proving the return is correct.

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How to Select an Auditor for Your Employee Benefits Plan

Businesses with over 100 participants in an employee benefits plan must have an audit on an annual basis. This audit must be filed, in fact, with the annual return. Many companies turn to simple services that provide nothing more than a basic look over the plan and provide the necessary files. Yet, before you choose anyone for the job, and potentially miss costly mistakes being made, it is critically important to focus on hiring a third party professional specializing in this type of audit.

Why Does It Matter?

Sometimes, it may seem that the least expensive option is the best option, but your business is likely suffering because of what you do not know. It is critical to have a professional with ample experience step in and to ensure that the necessary funds will be available to pay for all promised benefits to employees, including retirement and health needs. This is a legal responsibility, but it is also more than that.

An accurate plan is one that helps you to achieve your goals. Your employees are happy and that leads to good productivity. It also means you spend less money paying fines or trying to fund programs you cannot.

Who Should You Choose?

When selecting an auditor for your employee benefits plan, there are several key things to look for in these professionals. First, the auditor you use must be a licensed or certified public accountant. Aside from this, there are other things you will want to look for including:

  • The overall experience level of the auditor
  • The amount of time he or she has to dedicate to the job
  • The types of services offered specifically, you may wish to continue with the auditor for other needs as well
  • The cost of the service and how it is determined
  • The organization and timeliness of the individual

Take the time to get to know the auditor you select carefully. Not just anyone will meet the stringent requirements of the government and also ensure that you have an accurate, unbiased representation of what is happening with your employee benefits plan. The right professionals, like those at Crowley & Halloran, can help you to get this legal matter taken care of and ensure that your benefits plan is working in the best possible way it can for the benefit of both you and your employees.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.

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Whistle Blowing Done Right: How to Really Approach a Problem

You know a company or organization is doing something wrong. You may have just a few details, but you know the implications are incredible. What you may not know, though, is how to communicate this to the higher ups, whether that be someone in upper management or a government official. That’s why hiring a whistle blowing service is so important. With expert help, you can learn the depth of the problem and help to make significant changes. You do not want to be the type of person that sits on the sidelines and wonders if anything can be done.

Why a Third Party Provider?

Instead of trying to do the work yourself, hiring a third-party to handle the whistle blowing research is often best. It will ensure that you have the very best outcome. Consider the following.

You can remain anonymous. This means you can be assured that no one has to know what role you played in the process.

You have no need to move forward if there is no evidence of a problem after working with the third party provider. In other words, if there really is nothing wrong, you are not the one held responsible for the investigation.

A third party expert, like those available through our company, have the means and the know-how to uncover information people do not want to be seen. This is something you simply may not be able to do on your own.

Perhaps the most powerful reason to hire someone else to do this for you is the simplest of all. You want results and you want unbiased information. You do not want to hear that everything is fine unless you know that is the case from the evidence found. A common problem is that in-house staff often are not willing to provide information and you may run into more roadblocks than you thought. Even worse, people may lie to you.

Look at the evidence you have. Determine what this information means to other people, including those who may be suffering as the victims. You may not have the ability, time, or methods to fully investigate the problem, but you can hire a whistle blowing service to do the work for you. That means that you can find out if there is a problem and help to put a stop to it if it really is there. You can make the difference without any implications on yourself.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.

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End of Tax Season, Start Planning for Next Year!

Now that the tax season has ended, most people think “Yeah! I am done until next year.” The reality is that now is the time to start on next year’s taxes. There are a few things that can be done to help plan and prepare for next year’s taxes before January 1 starts knocking at the door.

Organize Now

You want to make tax time next year as stress-free as possible. The best way to accomplish this is to stay organized. It is extremely annoying to hunt for all the documents and receipts when it is time to start filing taxes. Start now. Have a specific location where all tax documents and receipts are kept for the year. This is where only successful if documents and receipts are filed on a regular basis. Take time to make sure that everything is in the file immediately in a file labeled for this year’s taxes.

Adjust Withholdings

Monitor payment withholding from paychecks. The goal is to withhold just enough to cover what is owed to the government. If you received a large refund, consider reducing withholdings to reduce the amount of your refund. This will cause an immediate increase in gross pay, but you can take that “extra” money and increase your IRA or 401(k) savings. This will help you prepare for your future retirement and lowers you taxes at the same time.

If you are the opposite and had to pay in a large sum to the government, consider increasing the amount deducted from your paycheck. You can do this by resubmitting the W4 form to your employer. You can choose to take out at a higher single rate or designate a specific amount to withhold from your paycheck for taxes each paycheck. If you need help figuring this amount out there are several places that offer ways of calculating anticipated taxes based on the last tax return filed.

Anyway, it is important to be thinking about what to prepare for next tax season. Stop the annual tax prep hunt and stay organized. Do not procrastinate, start now!

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.

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