• Don’t ignore stock losses, since they can be used to offset stock gains. If you have unrealized losses for 2015, consider selling those positions to offset any gain transactions you might have made. You can also deduct up to $3,000 in net capital losses against other income. Net losses greater than $3,000 can be carried forward and used on your 2016 tax return.

• Consider making a deductible traditional IRA contribution. If you qualify, you can contribute up to $5,500 for 2015, plus an additional $1,000 “catch up” contribution if you are age 50 or older. You have until mid-April 2016 to make your contribution and still take a deduction for 2015.

• Maximize your employer tax-deferred retirement accounts, such as 401(k), 403(b), or 457 plans.

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• Donate appreciated stock or mutual funds to charity. You receive a deduction for the appreciated value, but you don’t have to report or pay taxes on any of the appreciation.

(This general information should not be acted upon without first determining its application to your specific situation. For further details on any article, please contact us.)

The balance sheet reveals bookkeeping mistakes. Among the potential errors are incorrect inventory, overstated customer invoices, and understated vendor bills.

Balance sheets are snapshots of account balances on given dates, such as month-end or year-end. The three sections are: (1) what you own (assets), (2) what you owe (liabilities), and (3) the difference between these two—which is your business net worth (equity). Let’s have a quick review:

• Assets
  • Current Assets—cash or assets easily converted to cash, such as accounts receivable and inventory. These also include employee advances and similar short-term amounts. Each current asset account should reconcile to a financial institution statement or other corroborating record.
  • Fixed Assets—equipment, furniture, computers, leasehold improvements, etc., that have a useful life beyond one year and more than nominal cost.

The balance in each fixed asset account is your original cost for acquiring the assets in that category. Accumulated depreciation is a negative fixed asset account in which your original cost eventually ends up as it’s expensed over time.

• Liabilities
  • Current Liabilities—accounts payable, payroll taxes accrued but not yet remitted, credit card balances, and sales tax collected but not yet paid are examples of current liabilities. Usually such accounts are payable in less than a year.
  • Long-term liabilities—loans payable in more than a year. Each account balance should match other records—payroll reports, credit card statements, or lender summaries.
• Equity
  • ​Types of equity accounts depend on whether the business is a corporation, partnership, or proprietorship.
  • The most common reason for unequal asset and liability balances is the accumulation of business profits, which appear in the retained earnings equity account. Current year profit is separately indicated, and matches the bottom line of the P&L.
  • Other equity sources are capital from shareholders, partners, or an owner.

If you do not already take time each month to review your company’s balance sheet, I encourage you to schedule such a review each month. A great idea is to incorporate cash forecasting into this review. Not only will you see where you are at, but you will get a clearer picture of where you are headed.

What you learn could make all the difference in the success of your company!

Created by Palo Alto Software, LivePlan helps small business owners easily develop budgets and forecasts, create goals for their business, and then track their progress on a dynamic dashboard that syncs with popular accounting systems. LivePlan imports accounting data from QuickBooks and presents the information in a dashboard view that shows business owners where their financials stand compared to their original plan and previously set goals.
 
“Accounting data alone is not sufficient enough to run a business,” said Sabrina Parsons, CEO of Palo Alto Software. “Business owners must also track how those actual numbers compare to their budget and forecast and their historical performance. LivePlan gives small business owners access to this information - in an easy to view format - without having to ask their bookkeeper or accountant to run multiple reports. With this, accountants are becoming strategic advisors, and helping small businesses in areas beyond taxes, bookkeeping, and audits.”
 
About Hart & Associates
At Hart & Associates, we are committed to providing the highest level of service to our clients. In support of this focus, continuing education is part of our company culture. Our goal is to meet or exceed the current continuing education requirements for CPAs in the State of California, as well as to keep up with new offerings that support the growth and success of our clients.
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About Palo Alto Software, Inc.
​Palo Alto Software, Inc., makers of the #1 selling business planning software in the world, develops and publishes tools, products, and content to help small and midsized businesses pitch, plan, manage, and grow their ventures. LivePlan, the company’s flagship product, is a SaaS (software as a service) solution for business planning and financial management. Palo Alto Software has been the market leader in its category for over 15 years, has served well over 2 million entrepreneurs, and has customers in 180 countries. It was founded in 1988 by business planning expert Tim Berry. Sabrina Parsons has been the company’s CEO since 2007. Parsons successfully expanded its service offering into the cloud with LivePlan. Palo Alto Software is a privately-owned corporation based in Eugene, Oregon.

• The evasive fundraiser. A legitimate caller should be upfront about the charity, the percentage of funds allocated to administration and marketing, and what target groups will be aided by your donation. Don’t be afraid to ask direct questions and expect direct answers. If the fundraiser hedges responses or knows little about the supposed cause to which you’re contributing, consider sending your dollars elsewhere. Beware of vague claims like “educating the public” or “promoting awareness.”

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• The urgent on-line request. Widespread use of social media has provided fraudsters a golden opportunity to take the money and run. Websites made to mimic legitimate charities have conned many otherwise prudent contributors. Emails brimming with desperate pleas for money may originate from the backroom computer of some scam artist. Never divulge your financial information via email and don’t assume that social media messages about a particular charity are legitimate. Call the charity directly and find out if it’s registered in your state (if required). Ask for written information. When in doubt, check it out.

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Many charitable organizations are seeking your aid to address genuine hardships. Avoid the schemes of unethical hucksters and your donations will provide help where it’s needed most.

It's that time of the year again! Beginning this month, you can sign up for a new 2016 health insurance policy on the health insurance Marketplace. You can also change or renew the policy you purchased during the last enrollment period. Even if your current policy has an automatic renewal feature, you’ll want to verify that you are still eligible for the federal premium tax credit.

What if you didn’t sign up last winter and didn’t have health insurance coverage in 2015? You may owe a penalty on your 2015 federal income tax return. The penalty for 2015 is the greater of $325 per adult and $162.50 per child under 18 (up to a maximum per-family penalty of $975) or 2% of your modified adjusted gross income (with a maximum of the national average premium for a Bronze plan).

For additional information from www.Healthcare.gov, check out this article:  5 Tips About the Health Insurance Marketplace.

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