Nesteggg Accounting

Archives for August 2018

Six things for extension filers to remember

Six things for extension filers to remember

Oct. 15 is almost here, and it’s the last day to file for most people who requested an automatic six-month extension for their 2017 tax returns. These taxpayers should remember that they can file any time before Oct. 15 if they have all their required tax documents. They can also pay their tax bill in full, or make a partial payment, anytime, by visiting IRS.gov/payments.

As extension filers prepare to file, here are some things they should know:

  • They can still use IRS Free File.  Nearly everyone can e-file their tax return for free through IRS Free File. The program is available on IRS.gov now through Oct. 15. IRS e-file is easy, safe and the most accurate way for people to file their taxes. E-file also helps people get all the tax benefits they’re entitled to claim.
  • A refund may be waiting.  Anyone due a refund should file as soon as possible to get their money. The sooner someone files, the sooner they’ll get it. Don’t forget to use Direct Deposit. It is the best and fastest way for taxpayers to get their tax refund electronically deposited for free into their financial account.
  • They should consider IRS Direct Pay.  Taxpayers who owe taxes can pay them with IRS Direct Pay. It’s the simple, quick and free way to pay from a checking or savings account. Taxpayers can just click on the ‘Pay’ at IRS.gov.
  • Here’s what taxpayers should do about a missed deadline. Anyone who did not request an extension by this year’s April 17 deadline should file and pay as soon as possible. This will stop additional interest and penalties from adding up. IRS Direct Pay offers a free, secure and easy way to pay taxes directly from a checking or savings account. There is no penalty for filing a late return for people who are due a refund.
  • Taxpayers should remember the Oct. 15 Deadline.  Taxpayers who aren’t ready to file yet should remember to file by Oct. 15 to avoid a failure-to-file penalty. Taxpayers who owe and can’t pay their balance in full should pay as much as they can to reduce interest and penalties for late payment. They can use the Online Payment Agreement tool to apply for more time to pay or set up an installment agreement. In most cases, the failure-to-file penalty is 10 times more than the failure-to-pay penalty.
  • More Time for the Military. Members of the military and others serving in a combat zone get more time to file. These taxpayers typically have until at least 180 days after they leave the combat zone to both file returns and pay any taxes due.

PROMOTE YOUR BUSINESS WITH A FICTITIOUS NAME OR DBA

PROMOTE YOUR BUSINESS WITH A FICTITIOUS BUSINESS NAME OR DBA

An FICTITIOUS BUSINESS NAME aka DBA  (accepted name, substitute name, exchange name or DBA name) is a business name that is not quite the same as your own name. It is likewise not quite the same as the names of your accomplices or enlisted name of your LLC or company. Any exchange name that doesn’t coordinate your business name must be enlisted!

The name of your business ought to pass on the item or the administration you are giving. The business name may likewise incorporate a business area depiction. For instance, contrast the accompanying two organizations and the imaginary names: “John Chaisson’s Services” and “Atomic Car Repair Service”. Customers living in Miami that need their Audi auto repaired will no doubt call Pete’s place of business.

On the off chance that an entrepreneur has a few territories of activity, the entrepreneur may consider enrolling a few Fictitious Name or DBA with the area incorporated into every one of the FICTITIOUS NAME.

In what capacity can a Fictitious Name Help Market Your Business?

When you have your FICTITIOUS BUSINESS NAME aka DBA  enrolled, you can utilize your area particular imaginary name in your promotion duplicate. Utilize your FICTITIOUS BUSINESS NAME aka DBA  on print promotions, announcements, transport stop seats, and so on. What’s more, you will have the capacity to utilize your imaginary name in your SEO promoting procedure. Fabricate a custom site or pages for every one of your FICTITIOUS NAME. Drive FREE web crawler movement to your webpage with the utilization of your FICTITIOUS NAME!

 

Sole proprietorships, organizations, partnerships, and constrained risk organizations can enlist imaginary names. Sole proprietors and organizations that incorporate the proprietor’s name in the business name don’t have to enlist an FICTITIOUS BUSINESS NAME aka DBA . Else they should enroll, regardless of whether they haven’t petitioned for legitimate acknowledgment in some other way. Companies, LLCs, enrolled organizations, and restricted associations don’t have to enlist except if the business works under a name unique in relation to its official name. For instance, if “Inc.” is incorporated into the enterprise’s name on the articles of association yet not in the organization’s name then an imaginary name must be recorded.

Keep up Your Fictitious Name or DBA!!

An FICTITIOUS NAME will lapse following a specific number of years. In a few expresses, this can be like clockwork. A restoration of an FICTITIOUS NAME must be documented before the date of termination in the event that you mean to keep working together under that name and if there are no progressions from the first.

New cannabis regulations task force takes aim at unregulated pot shops

New cannabis regulations task force takes aim at unregulated pot shops

The task force served their first search warrant

See Video

Cannabis Regulations Task Force

RIVERSIDE, Calif.- – Riverside County’s new cannabis regulations task force is now in action, shutting down unlicensed marijuana shops and grow operations, and enforcing industry regulations throughout the county.

The task force served a search warrant Thursday at an unregulated dispensary in the City of Jurupa Valley, filing into a trailer and seizing several pounds of pot products and hundreds of dollars in cash.

District Attorney Mike Hestrin said it’s the first of several operations throughout the county.

“Someone’s got to enforce those laws otherwise we’re not going to have a legal cannabis industry,” Hestrin said. “We’re just going to continue to have different levels of illegality.”

Here in the valley, there are shops that don’t have their city or state license, an employee of a legal pot shop said. Employees at compliant cannabis businesses said they’re excited to see these unregulated shops weeded out.

“When you’re dealing with an illegal or not licensed dispensary, they’re not paying sales tax, they’re not paying a city tax, they’re certainly not paying a state tax,” said Josh Starer at Atomic Budz in Cathedral City. “When we have to mark our prices accordingly, they’re free to charge whatever they want.”

He said it “absolutely” hurts not only his business, but every licensed and legal dispensary in the Coachella Valley.

“So if they go into an unlicensed, unregulated dispensary and buy something, how do they know what they’re getting? What recourse do they have?” Starer said.

The task force is aimed at ensuring fair business and protecting cannabis consumers.

“What I would say to the unregulated businesses is … you should be getting legal in a very short period of time,” Hestrin said. “Comply with the law, get licensed, do all the things that you’re required to do and you won’t have a problem with the DA’s office.”

SAFE versus KISS, the development of the convertible note, as asked by a new client

SAFE versus KISS, the development of the convertible note

SAFE (Simple Agreement for Future Equity) and KISS (Keep It Simple Securities) are the two vehicles for beginning period and new businesses to get starting financing — avoiding long and far reaching negotiation — with Investors.

These Companies, in reality, don’t have a simple access to customary funding, holy messenger, or bank financing and Y Combinator (a Silicon Valley tech quickening agent) and 500Startups, a comparative association enlisted in California, built up the two conceivable and elective arrangements thereof for this circumstance.

It is a standard short archive (as a rule a five-page record), which contains the essential terms of an interest in beginning time organization or start-up.

The financial specialist and the organization can concur upon the standard arrangement of terms and conditions without extended transactions, so the organization can get its underlying subsidizing rapidly and economically.

1. Fundamental Concept

The financial specialist gives subsidizing to the organization in return for the privilege to change over its venture to value upon some future occasion, when a value round is raised and favored offers are issued: the speculator will get shares in the ensuing offering, frequently at a markdown to the value that different speculators pay in that advertising.

SAFE proselytes at any future value financing: SAFE concedes the real terms of the speculation to a future exchange (the future value financing) and this enables the underlying financing exchange to continue all the more rapidly and inexpensively.

SAFE contains arrangements for early exit (e.g. change of control) or disintegration of the organization and the gatherings can likewise arrange a CAP on the valuation utilized regarding the SAFE, and this may give extra security to the financial specialist: if an offer of the organization happens before the transformation to value, speculator can select to get 1x its venture or change over at the valuation top.

SAFE doesn’t have a lapse or development date, so there is a plausibility that it never changes over to value and there is nothing in the terms that require the venture to be reimbursed to the financial specialist. This implies the SAFE isn’t really a convertible note, as it doesn’t contain any obligation instrument dialect, for example, intrigue (no intrigue accumulates) or development date.

SAFE can be exchanged to the members of the financial specialist as it were.

2. Kind of SAFE

There are really four diverse kind of SAFE:

top, no rebate

rebate, no top

top and rebate

MFN (most supported country), no top, no rebate

The main arranging focuses are the consideration and measure of a valuation top and a marked down cost on transformation: this speaks to an absence of financial specialist insurances, especially in the occasion the organization does not raise future rounds of value capital.

SAFE is known as being sheltered in light of the fact that there are no detonating provisos that can wipe out the organization. The terms are narrow to the point that Y Combinator really needed to make four separate contracts to abstain from presenting many-sided quality: these four sorts of SAFE are greatly shortsighted understandings and they support the organization to the disadvantage of the financial specialist.

3. Conditions

– buy of value

– no development/termination date, no due date (except if arranged)

– no loan fee

– no base financing round

– top/rebate

– exchange rights: to subsidiaries of the speculator as it were

– leave premium – > change over in 1x

– transformation into any next value round

– now and then MFN

KISS

In July 2014 500Startups reports the introduction of the KISS archives, a comparable elective speculation vehicle to the SAFE instrument.

It contains similitudes with SAFE instrument, whose reason continues as before: to enable infant organizations to get financing in a brief span and requiring little to no effort, staying away from the long and sweeping period of arrangements which for the most part goes before the concede understanding by a speculator.

1. Essential Concept

There are two sorts of KISS:

obligation rendition: with financing cost and a development date

value rendition: without intrigue or development date

While the SAFE isn’t really a convertible note (as beforehand watched), Kiss comes near the traditional model of convertible note: it gathers enthusiasm at an expressed rate (5%) and builds up a development date (year and a half) after which the speculator may change over the hidden venture sum, in addition to collected enthusiasm, in a recently made arrangement of favored supply of the organization. Not at all like SAFE, KISS contains MFN statement, which enables the financial specialist to show signs of improvement securities later on if issued by the organization. KISS financial specialists are for the most part putting resources into the organization at a beginning period, when there is as yet a colossal measure of hazard. A MFN expression gives drawback assurance in the occasion the organization completes a “down round” (or generally allows more great terms to different financial specialists) later on.

Kiss changes over when the organization raises in any event $1 million in value financing: programmed transformation to favored stock happens when the organization raises a qualifying evaluated round; top/markdown should be consulted on an arrangement by-bargain premise.

KISS has a 18-month development date: if a no less than one million value financing does not happen by the development date, the KISS holder can choose to change over at the valuation top by lion’s share vote.

On the off chance that there is an offer of the organization before the transformation to value, the speculator can pick to get 2x its venture or change over at the valuation top.

KISS gives extra rights to the Major Investors (speculators who contribute at any rate $50K): most ordinarily KISS furnishes speculators with data rights (financials), 1x interest right later on rounds and a “Noteworthy Investor” rights as characterized in the following value financing.

The financial specialist can exchange its KISS to anybody at whenever.

2. Kind of KISS

As beforehand saw, there are two kinds of KISS: the obligation variant KISS all the more nearly tracks a convertible obligation structure (it contains the financing cost and the development date condition); the value rendition KISS is a center path between convertible obligation KISS and SAFE: this value KISS instrument does not collect intrigue and does not contain a reimbursement statement at a development date.

3. Provisos

– development/lapse date (year and a half)

– loan cost (5%)

– least financing round: >$1 million

– top/rebate to be consulted on an arrangement by bargain premise

– exchange rights: to anybody, at whenever

– leave premium – > change over in 2x

– transformation at, at any rate, $1million ascend in a value financing

– MFN

The KISS instrument does not as effectively take into account high goals financing. All KISSes in a given arrangement must have indistinguishable terms.

KISS is loaded with convertible notes: it has more many-sided quality however is significantly more adjusted than SAFE. Nonetheless, it is significantly more risky to originators, who regularly don’t see every one of the terms they might sign and it contains extra focuses for arrangement in this manner expanding exchange cost and diminishing straightforwardness. That is the reason the KISS instrument is most supported by financial specialists as opposed to by the organizations.

How to determine Partner Percentages

How to determine Partner Percentages

Here’s a useful/ more down to earth approach…

1. Tally all the money commitments to the business – since money is lord for most new businesses, you might need to give it a multiplier at your tact.

2. What is the present market estimation of your work and how long would you say you will add to the organization without pay?

3. Different assets, such plant and gear, and so on – what’s the estimation of that?

4. The intangibles may be harder to gauge, for example, organize, particular skill, IP, and so on.

You can make this a quiet vote. Everybody records what they believe it’s worth and afterward take the normal. Include that all up and compute the rate – this should give you a decent reference point to begin. …what’s more, bear in mind to incorporate a “save” possession for financial specialists or potentially future donors. While I would not make this the last and restricting method for deciding the proprietorship shares, this is a decent exercise to experience. It will give your gathering a more prominent “purchase in” accordingly amicability with regards to possession – contrasted with managing the proprietorship

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IRS to introduce new tax transcript to better protect taxpayer data

IRS to introduce new tax transcript to better protect taxpayer data

WASHINGTON – Moving to better protect taxpayer data, the Internal Revenue Service today announced a new format for individual tax transcripts that will redact personally identifiable information from the Form 1040 series.

This new transcript replaces the previous format and will be the default format available via Get Transcript Online, Get Transcript by Mail or the Transcript Delivery System for tax professionals as of September 23. Financial entries will remain visible, which will give taxpayers and third-parties the data they need for tax preparation or income verification.

Additionally, based on stakeholder feedback, the IRS also has created a new Customer File Number that lenders, colleges and other third parties that order transcripts for non-tax purposes can use as an identifying number instead of the taxpayer’s SSN.

“Since the IRS joined in partnership with the states and tax industry in 2015, we’ve made great progress in our effort to combat stolen identity refund fraud. Our numbers are going in the right direction,” said Acting IRS Commissioner David Kautter. “To maintain our progress, we continue to evaluate our policies and procedures on an ongoing basis. One area that we identified as in need of change was the individual tax transcript area. We believe the change we are announcing today will better protect taxpayer data from unauthorized disclosure and theft.”

As the IRS has made inroads, criminals need more taxpayer details to better impersonate their victims, making the tax transcript a sought-after document. Criminals attempt to pose as taxpayers accessing their own account or as tax preparers or third parties requesting client information.

The following information will be provided on the new transcript:

  • Last 4 digits of any SSN listed on the transcript: XXX-XX-1234
  • Last 4 digits of any EIN listed on the transcript:  XX-XXX-1234
  • Last 4 digits of any account or telephone number
  • First 4 characters of the last name for any individual
  • First 4 characters of a business name
  • First 6 characters of the street address, including spaces
  • All money amounts, including balance due, interest and penalties

On September 23, the IRS also will post an updated Form 4506-T and Form 4506T-EZ, Request for Transcript of Tax Return, that will have a new Line 5b for a 10-digit Customer File Number. Legitimate third parties with a need for income verification or tax data often request taxpayers complete a Form 4506-T.

As of September 23, third parties or taxpayers can create any 10-digit number, except for the taxpayer’s SSN, for use as an identifier. The Customer File Number listed on the 4506-T automatically will be posted and visible on the requested tax transcript, allowing the third party to match the document to the taxpayer. A Customer File Number can be, for example, a loan account number

Line 5b is an optional line, intended for those third parties that request high volumes of transcripts.

There is no change in the process for students seeking income verification through Free Application for Federal Student Aid (FAFSA) or disaster victims seeking FEMA assistance. Nor will business tax transcripts change.

Cannabis Tax Revenue Increases In 2nd Quarter of 2018

Cannabis Tax Revenue Increases In 2nd Quarter of 2018

 

The California Department of Tax and Fee Administration (CDTFA) today released revenue numbers for cannabis sales for the 2nd quarter of 2018. Tax revenue from the cannabis industry totaled $74,240,257.00 million from April 1, 2018, through June 30, 2018, which includes state cultivation, excise and sales taxes. It does not include tax revenue collected by each jurisdiction.

California’s excise tax on cannabis generated $43,490,668.00 million in revenue during the second quarter of calendar year 2018. The cultivation tax generated $4,482,119.00 million, and the sales tax generated $26,267,470.00 million in revenue. Medicinal cannabis is exempt from sales tax if the purchaser holds a valid Medical Marijuana Identification card.

The revenue from 1st quarter 2018 was $60.9 million, which included $32 million in excise tax, $1.6 million cultivation tax, and $27.3 million in sales tax.

To better serve our taxpayers, CDTFA has opened a new satellite location to accommodate tax and fee payers in and around Humboldt County, created a cannabis external tax advisory group, introduced a new pilot project in which the Statewide Compliance and Outreach Program (SCOP) teams visit known cannabis retailers to educate and assist them in complying with their tax obligations, and implemented improved procedures and security measures for financial transactions.

In November 2016, California voters approved Proposition 64, the Control, Regulate and Tax Adult Use of Marijuana Act. Beginning on January 1, 2018, two new cannabis taxes went into effect: a cultivation tax on all harvested cannabis that enters the commercial market and a 15 percent excise tax on the purchase of cannabis and cannabis products. In addition, cannabis and cannabis products are subject to state and local sales tax at the time of retail sale.

To learn more, visit the Tax Guide for Cannabis Businesses on the CDTFA website.

Note: This news release may discuss complex tax laws and concepts. It may not address every situation, and is not considered written advice under the relevant Revenue and Taxation Code section for the tax or fee program listed above. Changes in law or regulations may have occurred since the time this news release was written. If there is a conflict between the text of this news release and the law, decisions will be based upon the law and not this news release. For specific help, please contact the CDTFA at 1-800-400-7115.

Taxpayers with children, other dependents should check withholding ASAP

Taxpayers with children, other dependents should check withholding ASAP

Taxpayers who have children and other dependents should use the Withholding Calculator on IRS.gov to perform a “paycheck checkup.” The Tax Cuts and Jobs Act, which was passed late last year, includes changes that will affect 2018 tax returns that people will file in 2019.

Doing a checkup ASAP will help taxpayers determine if they need to adjust their withholding on their paychecks. The earlier they do this, the better. The sooner someone checks it, the more time there is for withholding to take place evenly during the rest of the year. Waiting until later in the year means there are fewer pay periods to make the tax changes.

The new law made changes to the child tax credit and personal exemptions. Taxpayers should do a “paycheck checkup” to determine if the tax law changes could affect their tax situation this year. Here is an overview of the changes to the law that could affect the withholding of parents and caretakers:

Child tax credit

  • The maximum child tax credit increased from $1,000 to $2,000 per qualifying child.
  • Taxpayers whose income was too high to benefit from the Child Tax Credit in prior years may now find they qualify.
  • The credit now phases out at $400,000 for couples and $200,000 for singles, compared with 2017 amounts of $110,000 for couples and $75,000 for singles.

Additional child tax credit

  • The maximum additional child tax credit increased from $1,000 to $1,400.
  • The ACTC is a refundable credit for taxpayers who owe little or no federal income tax.

Credit for other dependents

  • There’s a new $500 credit that can benefit taxpayers who support other dependents.
  • The taxpayer will claim the credit when filing a tax return.
  • For purposes of this new credit, other dependents include qualifying children or qualifying relatives, such as a college student or an elderly parent.

Personal exemption

  • The new law removes the personal exemption that taxpayers formerly claimed for themself, their spouse and dependents.

The Withholding Calculator allows taxpayers to enter their expected 2018 income, deductions, adjustments and credits – including the child tax credit. Users can click on definitions in the calculator for help in figuring out who qualifies for these expanded credits.

For information about how to use the calculator and how to change withholding, taxpayers can check out the IRS Tax Reform Tax Tips on IRS.gov.

Taxpayers may also need to determine if they should make adjustments to their state or local withholding. They can contact their state’s department of revenue to learn more.

Got a big tax refund? Use IRS Withholding Calculator to boost take-home pay in 2018

Got a big tax refund? Use IRS Withholding Calculator to boost take-home pay in 2018

WASHINGTON – Taxpayers who received large refunds earlier this year may be able to get more of their money included in their paychecks during the rest of 2018 by using the Withholding Calculator on IRS.gov.

According to the Internal Revenue Service, most taxpayers – more than seven out of 10 –  receive refunds averaging around $2,800. Typically, taxpayers who receive large refunds could receive more of their money throughout the year, rather than waiting until they file their tax return after the end of the year.

Tax reform has big impact

The Tax Cuts and Jobs Act, enacted in December, made major changes to the tax law. Any of these far-reaching changes could have an impact on the refund many taxpayers will receive when they file their 2018 tax return. The IRS encourages every employee, including those who typically receive big tax refunds, to do a “paycheck checkup” soon to ensure they have the appropriate amount of tax taken out of their pay.

TCJA changes that could have a big impact on tax refunds this year include:

  • Reduced tax rates and changed tax brackets.
  • Eliminated personal exemptions.
  • Increased standard deduction.
  • Expanded and increased Child Tax Credit.
  • A new credit for other dependents.
  • Some limited or discontinued deductions.

Do a ‘paycheck checkup’ soon

The IRS urges taxpayers to complete their “paycheck checkup” now so that if a withholding amount adjustment is necessary, there’s more time for withholding to take place evenly throughout the year. Waiting means there are fewer pay periods to withhold the necessary federal tax – so more tax will have to be withheld from each remaining paycheck.

Adjusting withholding can prevent taxpayers from having too little tax or too much withheld. Too little withheld could result in an unexpected tax bill or penalty at tax time in 2019.

Using the Withholding Calculator

It’s helpful if taxpayers have their completed 2017 tax return available when using the Withholding Calculator to estimate the amount of income, deductions, adjustments and credits to enter. Filers also need their most recent pay stubs to compute the employee’s withholding so far this year.

Calculator results depend on the accuracy of information entered. If a taxpayer’s personal circumstances change during the year, they should return to the calculator to check whether their withholding should be changed.

Employees can use the results from the Withholding Calculator to help determine if they should complete a new Form W-4 and, if so, what information to enter on a new Form W-4.

Taxpayers who change their withholding for 2018 should recheck their withholding at the start of 2019, especially those who reduced their withholding sometime in 2018. A mid-year withholding change in 2018 may have a different full-year impact in 2019. Taxpayers who do not file a new Form W-4 for 2019, may have a higher or lower withholding than intend. To help protect against having too little withheld in 2019, IRS encourages all filers to check their withholding again early in 2019.

The Withholding Calculator does not request personally-identifiable information, such as name, Social Security number, address or bank account number. The IRS does not save or record the information entered on the calculator. As always, taxpayers should watch out for tax scams, especially via email or phone and be alert to cybercriminals impersonating the IRS. The IRS does not send emails related to the Withholding Calculator or the information entered in it.

Adjusting withholding

Employees who need to complete a new Form W-4 should submit it to their employers as soon as possible. Employees with a change in personal circumstances that reduce the number of withholding allowances must submit a new Form W-4 with corrected withholding allowances to their employer within 10 days of the change.

Taxpayers may also need to determine if they should make adjustments to their state or local withholding. They can contact their state’s department of revenue to learn more.

Making a Sales and Use Tax Prepayment

Making a Sales and Use Tax Prepayment

The California Department of Tax and Fee Administration (CDTFA) implemented a new online services system on May 7, 2018. As a result, some of our processes have changed, including the way prepayments are made.

Below are some important details about making a sales and use tax prepayment in the new online system:

  • You are no longer required to report the sales associated with your prepayment.
  • The system will only require that a payment be made.
  • If you did not make any sales during the prepayment period, you do not need to make that prepayment. You will simply indicate, on your quarterly return, that you did not have sales to report for the prepayment period.
  • When making your prepayment online, you must indicate the Payment Type by selecting Prepayment 1 or Prepayment 2 for the quarter.
  • Your prepayments will automatically populate on your quarterly return.
  • For prepayment instructions and due dates, please click here.
  • For step-by-step resources and video tutorials on how to make a prepayment and other online services topics, please see our Resources and Tutorials pages on our website.

For more information on making a prepayment, please contact our Customer Service Center at 1‑800‑400‑7115 (TTY:711) Monday through Friday, 8:00 a.m. to 5:00 p.m. (Pacific time), except state holidays.

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