Tuesday, August 23, 2016

Genius Internal Control Procedure for Any Small Businesses

I have worked with many small businesses, such as restaurants, ice cream shops, hardware stores, - you know - the little guys.  You walk in, find what your looking to buy, go to the counter and pay for it.  If its not the owner of the business, it is someone that he or she has hired.  Someone that they have placed confidence in.  Unfortunately, It is the small businesses that simply do not have the resources to fight theft and fraud until it is too late, after the damage has been done. 

Recently, I was at a beach bar in south Florida that had an interesting sign, which I thought was pure genius, if you do not receive a receipt for your purchase, or if it does not match what you ordered, call this number and receive a 25.00 gift card.  

I have not seen something like this before.  In fact I go to this place every year, and the sign is new.  

In terms of internal controls and fraud prevention, this is absolutely genius.  It is extremely simple, no security cameras, no fancy oversight, and it continuously monitors itself.  

1. Employees are aware of the program, there is no need for an elaborate screening process.

2. Monitoring is automatic, all done by customers

3  No experts are needed

4.  Cost effective, just a phone number is needed.

Sometimes the best internal controls are the simplest.








Doug Zandstra CPA CFE EA
Certified Public Accountant
Certified Fraud Examiner
Enrolled Agent
29 Pearl St NW, Ste 225
Grand Rapids, MI  49503616 970 3000
dougzandstra.com
email doug@dougzandstra.com

Wednesday, August 3, 2016

Tax Implications of Selling Your Rental Property - SImplified

With the cost of college going up, renting a house is becoming more and more popular.  The result is that there are a lot more rental properties out there.  When you go to sell your rental property, there are tax implications.  Don't be caught off guard.

Selling your rental property triggers a couple of different types of taxes - depreciation recapture and capital gains tax.

Capital gains taxes are lower than ordinary taxes, and there generally 15% or 20% depending on your ordinary income tax bracket.  More information click here <<CAP GAINS RATES>>

First step is to calculate your basis in your property.  For example if you bought your property for $100,000 and have depreciated $25,000, your basis would be $75,000, then for example you sell the property for $150,000

In this simple example, here are the tax components

$75,000      Cost
($25,000)    Depreciation
------------
$50,000      Basis

$150,000    Sales Price
------------
$100,000    Gross Profit


The tax implications are that of the $100,000 in profit.

The profit is then broken into components.

$25,000 has been written off through depreciation, this is 1250 gains and are taxed at 25%, ($6,250)

The remaining profit of $75,000 is treated as long term capital gains.  And depending on your situation, that could be taxed at 15%  ($11,250)

Thus your total tax on this transaction would be 11,250 + 6,250 = $17,500




 






Doug Zandstra CPA CFE EA
Certified Public Accountant
Certified Fraud Examiner
Enrolled Agent
29 Pearl St NW, Ste 225
Grand Rapids, MI  49503616 970 3000
dougzandstra.com
email doug@dougzandstra.com

Wednesday, July 27, 2016

The State of Michigan will be looking over your shoulder when you sell that used car

When you buy a used car in the state of Michigan, and transfer the title, the Sate collects sales tax based on what the buyer writes down.  Until now, Michigan has never really challenged what the car buyer writes down.

This appears to be coming to an end.

 The forms that I have attached below show that Michigan is going to be using a database that will compare the value of your car too the amount that you report in the title transfer.

As you can see, there doesn't appear to be a lot of wiggle room if you purchase a car for less than market value.

You will need to be prepared to explain your bargain purchase.

The State is moving more and more to the guilty until proven innocent policy when it comes to collecting taxes.  This appears to be another simple revenue generater that is mechanical and requires little human intervention.


Doug Zandstra CPA CFE EA
Certified Public Accountant
Certified Fraud Examiner
Enrolled Agent
29 Pearl St NW, Ste 225
Grand Rapids, MI  49503616 970 3000
dougzandstra.com
email doug@dougzandstra.com


Thursday, July 21, 2016

Forms for Setting up your Business in Michigan

Here are some helpful links to the forms that are needed to set up  your Michigan L.L.C. or your Michigan Corporation.  This is not intended to replace the advice of an attorney.

Michigan has 2 basic for-profit, business structures.  L.A.R.A. has some information about them.

1.  L.L.C. 

Michigan LLC Act

  • Michigan LLC registration forms are located <HERE>

2.  Corporation - 

Michigan Corporation Act

  • Michigan Corporation registration forms are <HERE>

3.  Michigan Sales Use and Withholdings Tax

Forms used to registering for Michigan Sales, Use and Withholding Taxes are <HERE>  

4.  Federal Registration 

Forms used to register for your Federal Identification Number are online  <HERE>

5.  S Corporation Elections

Forms that you use to make your S-Corporation Election are online <HERE>

I recommend consulting with an attorney for these matters.


Doug Zandstra CPA CFE EA
Certified Public Accountant
Certified Fraud Examiner
Enrolled Agent
29 Pearl St NW, Ste 225
Grand Rapids, MI  49503616 970 3000
dougzandstra.com
email doug@dougzandstra.com

Friday, February 26, 2016

Attn Michigan Real Estate Professionals HB 4173

HB 4173 - PA 217 Signed into law 12/15/15

Real Estate Transfer Tax Exemption

If you sold a principal residence after June 24, 2011 and the tax assessed value at the time of sale was less than the year you bought the house you may be eligible for a refund of some of your transfer taxes

Michigan homeowners can claim an exemption from the State Real Estate Transfer Tax Act assessment of $7.50 for every $1,000 in value that was sold. In order to claim the exemption, 3 conditions must be met at the time of sale:
  1. The property must be claimed as the seller’s principal residence.
  2. The tax assessed value of the property (or, state equalized value “SEV”) must be lower in the year of the sale than the year in which the property was purchased.
  3. The property was sold for a price in which a willing buyer and a willing seller would arrive through arm’s length transactions.
Use form MI 2796

Doug Zandstra CPA CFE EA
Certified Public Accountant
Certified Fraud Examiner
Enrolled Agent
29 Pearl St NW, Ste 225
Grand Rapids, MI  49503616 970 3000
dougzandstra.com
email doug@dougzandstra.com

Tuesday, January 5, 2016

About filing 1099-Misc

1099-Misc Basics

If you are a business owner and hired independent contractors during the year, you may have to issue them form 1099 Misc.

This is a method that the IRS uses to make sure that the income is then reported by the contractor.

You also need to send a copy to the IRS.

The rules boil down to this:

If you own a business and you paid a contractor of $600 or more, you are required to file a 1099 Misc

There is an exception, and that is if the contractor is a Corporation, then you do not need to prepare the form

Also, any payments to an attorney - this would suggest that the IRS officially does not trust attorney's must be reported

Do not include payments for materials, 1099's should be for services provided only.

Filing these forms has become easier over the years.  You can find a firm that prepares these forms for you at:

http://www.efilingplus.com/


By Doug Zandstra CPA EA
Certified Public Accountant
Enrolled Agent
29 Pearl St NW, Ste 225
Grand Rapids, MI  49503616 970 3000
email doug@dougzandstra.com

Affordable Care Compliant Health, Dental, Vision Short-Term Disability and Life Insurance Quotes


The Affordable Care Act is now in full effect.  It is complicated.  Now everyone is required to have a minimum amount of health insurance, you need options.

We have a viable option for you to meet the standards and avoid the penalties for not having health care.

Get a quote online by using the ling below

http://drakehealth.com/site/svc/egateway?sid=90224

By Doug Zandstra CPA EA
Certified Public Accountant
Enrolled Agent
29 Pearl St NW, Ste 225
Grand Rapids, MI  49503
616 970 3000
email doug@dougzandstra.com