IntraScope Accounting Solutions, LLC

 

 

February 2002 Edition

_______________________________________________________

The new tax law created a special capital gains rate of 18% (20% is the current rate) for assets held longer than 5 years that are acquired after 12/31/00.  Individuals are allowed to make a special election to treat assets acquired before 12/31/00 as a “deemed sale”.   Recognizing the gain on the appreciation would make these assets eligible for the 18% rate assuming the asset is held five years.  If you have unused capital losses, this election may make sense.  Please call me if think this may apply to your tax situation.

 

You are required to report new hires to the State of Colorado within 20 days of hire?  The easiest way to comply with the law is to fax a copy of their W-4 to 303-29-2595.  This is an effort by the state to collect family support from parents who are not meeting their obligations.

 

Once a year or so, it is a good idea to condense your QuickBooks file.  Condensing makes sense if your company data file is becoming too large and slowing down your system or there are many unused items.  One critical item to remember: keep a permanent, working back-up of the file because condensing summarized your data deletes the detail.  To condense a company date file, select window from the menu bar and close all.  Then click File: Utilities: Condense Data.  QuickBooks will ask for a date for which all previous transactions will be summarized.  I like to keep at least the current year and the prior year open.  It is a good idea to remove unused accounts, customers, etc.

 

With the start of a new year comes my annual New Year’s resolution to keep my personal and business finances separated.  It takes a little extra effort but it keeps my records cleaner and the IRS looks at commingling with suspicion.  Here are the top three must do’s:  1.   Designate one credit card as business and use it only for business expenses.   2.   Transfer money from your business account to your personal account so that only business expenses are paid from your business account.   3.   Pay for all business expenses with a check or credit card – avoid cash.  This will ensure all business expenses are properly recorded and deducted.