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Accounting, Payroll & Pension Issues/Questions Answered by Expert Ed McFarland
| Subject | Date Asked |
| Changed jobs | 11/28/2007 |
| Q: I recently changed jobs. I was employed by the State of Wy and participated in their retirement ... A: Last one first, yes a rollover from a qualified plan to an IRA still protects the tax defferal. If ... | |
| What do I do with this money | 11/19/2007 |
| Q: I am 65, still working part time for a man who has passed on, and has left me with money. It has ... A: I'm assuming that this is a distribution from the estate. Given that you are still working, the ... | |
| Payroll | 11/15/2007 |
| Q: How much notice must an employer give when changing pay periods from weekly to bi-weekly? A: The basic rule of thumb is that it should be enough notice not cause hardship for employees. Many ... | |
| accounting software for small not-for-profit | 11/11/2007 |
| Q: I am planning to do accounting work for small not-for-profit as contractor. Could you recommend ... A: Start with Excel until you know what you are dealing with. For most small organizations Quickbooks ... | |
| Gross up check | 11/7/2007 |
| Q: We have an employee who is supposed to have his car allowance grossed up. The net amount per semi ... A: If you are doing it from total gross pay, it should be right. If you are only considering the ... | |
| Payroll Account | 11/6/2007 |
| Q: What is the advantage of having "Payroll Account" printed on the face of the Paycheck? I work for a ... A: Once upon a time, when everybody got a check and they were written out, it helped sort out things. ... | |
| contract vs. permanent employee question | 11/2/2007 |
| Q: My company is a 10 year old company of a couple hundred employees. They have grown quickly without ... A: It's a short term fix to respond to the pressure of being public. A contract or 1099 employee has ... | |
| payroll | 11/2/2007 |
| Q: I work for a small company. Just my boss and myself. This company is a C-Corp. I handle payroll. ... A: Sure he can be paid and should be. Many small business people confuse profits with their paycheck. ... | |
| LLC | 4/28/2007 |
| Q: My fiance just started a single member LLC as a side job only. Is he allowed to "pay" himself once a ... A: Sure he can pay himself. To keep life simple, upgrade from Quicken to Quickbooks, the small ... | |
| Stop pay on chks or ACH payments | 4/26/2007 |
| Q: I am hoping you can give me a little feedback....I work in billing and when customers want refunds ... A: In this day and age, the money moves too fast for that to work anymore. Once you have it, they can't ... | |
| Different pensions-different payrolls | 4/23/2007 |
| Q: To avoid discrimination is it necessary to set up separate payrolls for similarly situated employees ... A: Not necessarily, realize that the point of the testing is to insure equitability for all employees. ... | |
| Lucent Savings Plan and Retirement Income Plan difference | 4/22/2007 |
| Q: I worked at Lucent until 1999. I have a 401K with Lucent managed by Fidelity that is called the ... A: Probably not, the 401k plan is a defined contribution plan. The other one is for a defined benefit ... | |
| capital account adjustments | 3/24/2007 |
| Q: My question is about capital accounts... in our llc business 1 of 3 partners wants to retire.. he ... A: If I understand the situation, the capital account is the equal to shareholder equity. There is some ... | |
| capital account adjustments | 3/24/2007 |
| Q: My question is about capital accounts... in our llc business 1 of 3 partners wants to retire.. he ... A: Let me see if I got this, a partner wants out, you have a buy/sell agreement in place and execute it ... | |
| LLC Draw | 3/21/2007 |
| Q: My son has started a single entity LLC doing some architectural drawings. I am helping him set up ... A: The LLC will issue him a 1099 to account for the income. If the LLC uses his social security ... | |
| LLC Draw | 3/21/2007 |
| Q: My son has started a single entity LLC doing some architectural drawings. I am helping him set up ... A: The question that needs to be answered, is this to his job and career or is this a side line. If ... | |
| 'C' Corp profit distribution | 3/19/2007 |
| Q: I am 25% shareholder in a California C-Corp and I was wondering by law how much the corporation can ... A: There no law, that I'm aware of, that requires a company to distribute a dividend. The profits, ... | |
| pension salary cap | 3/15/2007 |
| Q: What is the salary cap for pension contributions for 2006? A: Here are the limits for 2006 for Qualified Plans: 401k: $15,000, deferred SIMPLE plans: 10,000, ... | |
| credit cards | 3/13/2007 |
| Q: Is it possible for someone to use a credit card to make a direct deposit payment into a bank ... A: Not that I'm aware of. Go down to the bank and ask about merchant services and get set up for ... | |
| early pension withdrawl for business purchase | 3/10/2007 |
| Q: A friend of mine recently told me that he plans on quitting his job, tapping into his pension and ... A: If he isn't 59 1/2, there will be a 10% penalty and the proceeds will be taxed as ordinary income. ... | |
| LLC | 3/8/2007 |
| Q: We're thinking of starting an LLC. My concern is the business flopping & not earning a dime so.... ... A: You only owe taxes on money you get, income. What might get is a tax loss from your efforts. While ... | |
| Pay Checks | 2/17/2007 |
| Q: I work in Texas for a company that caters to the Petrochemical plants. We are currently in Beaumont ... A: None that I'm aware of. Now custom maybe another thing, the supervisor may be alluding to the fact ... | |
| Sub-contractor Question | 2/7/2007 |
| Q: I have a personal training business in New Jersey. I am at a point now where I need to hire a few ... A: Its possible to treat them as sub contractors and pay them on a 1099 basis. There are rules that you ... | |
| Payrool | 2/4/2007 |
| Q: I quit my job in October, but was still paid through direct deposit until the end of January. Do I ... A: You could be liable to pay back any unearned income. You don't have a legal obligation to tell them, ... | |
| CIMA | 1/30/2007 |
| Q: I have just received my results for the managerial level, and I passed them all. I am now a ... A: I'm not familiar with many of the UK firms, outside the global ones. But I would look at the web ... | |
| loss on my Lucent Savings Plan | 1/24/2007 |
| Q: I was employed by Lucent for approximately 10 years. My savings plan is currently worth $10K, with a ... A: You can use capital losses to offset a like amount of capital gains. You can only use the stock ... | |
| Recording a 401k profit sharing plan | 1/22/2007 |
| Q: I work for a contractor and this past December he started a profit sharing plan. I wanted to know ... A: A 401k plan is not a company asset, that is why creditors can't touch it. It belongs to the ... | |
| S Corporate or LLC | 1/11/2007 |
| Q: I am starting up a virtual assistant business with some office tasks for a couple of local churches. ... A: The reality that for start up businesses, it is tax question as to which structure you use. A bank ... | |
| When is it Sale - Special Order Sales Contracts | 1/8/2007 |
| Q: I would like to verify your answer provided to the AllExperts 6/21/2004 question regarding Accounts ... A: Follow the entries in the second line: The original entry would have created the sale and a ... | |
| When is it Sale - Special Order Sales Contracts | 1/8/2007 |
| Q: I would like to verify your answer provided to the AllExperts 6/21/2004 question regarding Accounts ... A: You would recognize the revenue when it was received. The original entry would have created the ... | |
| 401K Profit Sharing | 11/17/2006 |
| Q: I own a company where myself and my spouse are the 2 employees. For Tax year 2005, the company made ... A: If the plan is over 100k in assets, then it may get noticed from the form 5500. Otherwise, barring ... | |
| bank statements/ checks | 11/17/2006 |
| Q: I would like to know if the time period for holding on to bank statments and cancel checks/duplicate ... A: Depends, general rule is the IRS audits can go back 6 years, So anything related to taxes you should ... | |
| Excessive Salary/Bonuses | 11/16/2006 |
| Q: I have a client who - just before year end - pays excessive bonuses to their employees (mostly ... A: Advise him about what? If it is about unfairness, I don't think you have much to go on. Now one way ... | |
| 401K distribution/rollover | 11/14/2006 |
| Q: I left my last employer May of 2005. I have a 401K plan with them, with about 13,000.00 in it. I ... A: Instead of trying to get the paperwork from your former employer, go to the plan custodian instead. ... | |
| Are forgone deposits tax deductible? | 11/14/2006 |
| Q: We put down a deposit on two condos(pre-construction) two years ago and the condos are about to be ... A: You need to check with your tax man, but I would say that your intention was for investment this ... | |
| Deferred payroll | 11/8/2006 |
| Q: I am an officer (COO) in our C Corp. We ran short and reduced our payroll beginning in June from ... A: Yes the deferred payroll is a liability. Now is the company going into reorganization or ... | |
| Was cheated on payroll | 11/4/2006 |
| Q: My friend quit her job at Amazon.com and she they are refusing to pay her for the last week claiming ... A: Contact the local office of the US Department of labor and the state's wage protection office. ... | |
| I am leaving my company and have 401k | 11/3/2006 |
| Q: I have a 401k value 41,273.78 as of 12/31/05. I resigned as of November 1,2006. I am 100% vested, ... A: First realize that unless you are 55 or older you will give away over $12,000 in taxes and ... | |
| Salary/ Hourly Wages | 10/26/2006 |
| Q: I was wondering if you could give me the difination between salary wages and Hourly wages. For ... A: This is what is called exempt and non-exempt employees. Non-exempt are paid a hourly wage with ... | |
| SIMPLE IRA CONTRIBUTIONS | 10/25/2006 |
| Q: When they use the term, "tax-free" employee contribution, does that mean no deduction of taxes for ... A: The IRA contribution is federal income tax free, maybe state tax free and the rest get their share. ... | |
| 401K Journal Entry | 10/16/2006 |
| Q: Ed, My company has a 401K plan in place that only allows for employee 401K contributions. We are ... A: I would be treating it the same way you treat the employee's contribution to something like FICA or ... | |
| pension plan accounting | 10/15/2006 |
| Q: I am in Intermediate Accounting 2 and learning about Pension Plan accounting. I have reread the ... A: Check out a site like www.plansponsor.com and look for links, google defined benefit plans (pension ... | |
| Equity in a company | 10/5/2006 |
| Q: I started a new job as Media Director of a company in April. Recently the CEo told me that they ... A: You are being offered ownership in the company. What you want to find out what the vesting ... | |
| Early Withdrawl | 9/17/2006 |
| Q: If I want to take the money out of my pension plan now in order to do construction on my home or ... A: If take money out it is immediately taxed as ordinary income plus a 10% penalty on the entire ... | |
| cashing out pension plan | 9/15/2006 |
| Q: I worked for UPS full time for 16 years, and am vested to receive retirement benefits through the ... A: You should be able to contact the local office and get the contact for the plan administrator. You ... | |
| pension plan cash out | 9/8/2006 |
| Q: I have a pension plan with a previous employer, a physician in private practice in California. I ... A: If it is a profit sharing plan, he doesn't have to make the 2005 contribution until he pays his 2005 ... | |
| partnership/disbursment of monies | 8/31/2006 |
| Q: and thank you for your help. I am a commercial advertising photographer, and I have been in ... A: First, determine why this is a good idea in the first place. You are not merging your businesses, ... | |
| SEP IRA employee particiaption | 8/28/2006 |
| Q: "Hello. I work for a company that has a SEP-IRA plan. Each employee must set up their SEP account ... A: Yes you will open an account on there behalf, given what you have set for requirments for the plan. ... | |
| Profit Sharing Plan & Trust (Defined Contribution Plan) | 8/10/2006 |
| Q: I'm a Professional Bookkeeper helping small businesses. One of my clients rolled over IRA's into a ... A: Your problem now, based on the details you gave me, is that the plan is out of compliance with the ... | |
| 401k 10% penalty | 8/10/2006 |
| Q: I know that we don't have to pay the 10% penalty if we take the 401K money to pay for the medical ... A: The most common is a 72t distribution. It allows a participant to get distributions before 59 1/2. ... | |
| Budget for sales | 7/25/2006 |
| Q: This is my first time in the compilation and preparation of annual budget, and I have difficulty of ... A: Revenue is the hardest number to get. Since one of the key elements is the forecast for the year ... | |
| Due to individual shareholder(s) (GIFI 3261) | 7/24/2006 |
| Q: I just started an incorporation here in Quebec. I'm using Simply Accounting for the first time and ... A: The specifics of Canadian accounting rules are not my long suit. However, what you are doing is ... | |
| Changes to pay date | 7/24/2006 |
| Q: My company wants to change the day we receive our pay (from the 20th of the month to the 26th). Can ... A: I can't think of any reasons they should change and problems that you end up facing. I'd ask why ... | |
| bonus or profit sharing | 7/21/2006 |
| Q: What about tax consequences? Bonuses are considered supplemental wages taxable @ 25%. Profit ... A: You are right about the taxes. The issue is whether for moral and incentive purposes, which one ... | |
| 401K | 7/14/2006 |
| Q: I have a client, 72 years old, that wants to use his 401k to participate in horse partnerships but ... A: This isn't ringing a bell. If this is his 401k and is no longer working, there is no real ... | |
| Overhead Variance | 7/11/2006 |
| Q: What is overhead Variance? A: Any variance is the difference between the budgeted aand actual amounts. Given the way you are ... | |
| c or s corporation payroll tax | 7/7/2006 |
| Q: I was wondering if I need to have a payroll account if I form a corporation when I am the only ... A: You don't need a payroll account for a single person operation. Good record keeping is critical. In ... | |
| 401k | 7/7/2006 |
| Q: My husband will like to transfert all his former 401k accountsinto an IRA but does not know how to ... A: It isn't a big problem. If you have the statements, there should be the name of the plan provider, ... | |
| regular payroll & bonus taxes | 6/15/2006 |
| Q: is it at the employers descretion to tax bonus pay at a higher tax rate than normal? if an ... A: Not the employer, but the tax charts. Taxes are graduated and paid on the last dollar earned. Your ... | |
| Empoyees that are in between addresses | 6/5/2006 |
| Q: How do you start an employee on payroll that is relocating from another state and has no address in ... A: You can use their old address while they are establishing themselves. Another choice is to use their ... | |
| End of year JE question | 5/30/2006 |
| Q: I have a complex error in 2005 that I am hoping you can help me with. In December 2005, there were ... A: First off I wouldn't treat this as a prepayment, rather it has more in common with a receivable. I'd ... | |
| tax | 5/12/2006 |
| Q: I use a subcontractor for some work that is out of my skill set. He does great work. Last year I ... A: Penalties for not reporting W9 information can be tremendous. By law, you have the right to garnish ... | |
| s corp online personal banking question | 5/11/2006 |
| Q: I have a small photography business which is an s-corp (4 people including myself) in California. We ... A: There's nothing illegal, unless they ask you if this for business and you lie about it. Then it is ... | |
| job cost overtime & taxes on bonuses | 4/26/2006 |
| Q: I have two questions, if that's OK. First, what is the GAAP for overtime when allocating labor ... A: 1. This is a question about actual versus budget expenses. My question is which job created the ... | |
| Cash from insurance company | 4/23/2006 |
| Q: I have rental property. Recently, I received cash from insurance company for fire damage of ... A: Realize that this is a special one time event, at least you hope so. You'll set up an insurance ... | |
| 401k rollover to IRA at 55 | 3/16/2006 |
| Q: I have 2 401k plans with previous employers, and a nominal IRA account at my credit union, but no ... A: Look into a 72a or a 72t distribution. They are a away to get the money out penalty free before you ... | |
| 401 k | 3/12/2006 |
| Q: I have three 401k accounts, one from a former employer approx $55,000, one from my current employer ... A: It is easy, if the 2 old 401ks are yours you can roll them into your current employer's 401k. Ask ... | |
| accounting question | 3/8/2006 |
| Q: The rights for each book are listed on our balance sheet at the estimated market value. I'm trying ... A: The asset is the book's value and over time it depreciates. I'm assuming that the book's value is ... | |
| accounting for mechanic's lien | 2/27/2006 |
| Q: Yes, I searched FASB too. My controller wanted something in writing that referenced items on A/R ... A: OK, I looked in a couple of other places as well. I can't figure what the problem would be if you ... | |
| accounting for mechanic's lien | 2/27/2006 |
| Q: ------------------------- Could you point me in the direction of a site or FASB pronouncement? ... A: It would be done through an adjustment of a/r reserves. The only thing special about this is the ... | |
| small business accounting | 2/25/2006 |
| Q: My small landscape business is taking off. We increased our gross from 200k to 375k in one year. ... A: I would be curious by what you mean. If the accountant is experienced working with small businesses, ... | |
| small business accounting | 2/24/2006 |
| Q: My small landscape business is taking off. We increased our gross from 200k to 375k in one year. ... A: A bookkeeper would probably do you fine. The next question is what else would that person do? There ... | |
| FOLLOW UP | 2/24/2006 |
| Q: Ed McFarland Hello Ed, Follow up question, and hopefully last. Thanks for the immediate ... A: That probably rules out my first guess. Then follow on with my suggestion and get the basic ... | |
| Cash basis and Checking | 2/23/2006 |
| Q: Ed McFarland Hello Ed, My brother and I have a small business. Our accounting method is cash ... A: You are confusing cash in the bank with profit. With the tax forms there should be 3 basic ... | |
| accounting for mechanic's lien | 2/23/2006 |
| Q: Can a customer accounts receivable that is past due and has a mechanics lien, be written off? I ... A: I take it that this has been on the books for a long time. You can write it off and if ever comes in ... | |
| Preparing a T-account for retained earnings | 2/18/2006 |
| Q: I have a homework problem which I am having troubling working out. Prepare the closing entries from ... A: Since you didn't tell me what you got for an answer or what the prior year numbers are, it is hard ... | |
| Accounting for IRA | 2/9/2006 |
| Q: I have an employee that has elected to contribute to an IRA rather than participate in the company ... A: Yes, check with your payrol provider and do the wage reduction and your contribution. Your payroll ... | |
| acccounting | 2/9/2006 |
| Q: Here's the brief story: After receiving an estimate on damage to my car, my $500 deductible was ... A: no, that's why they are called estimates. Happens all the time, usually it is that the way around, ... | |
| "T" accounts, debits and credits. | 1/24/2006 |
| Q: Am retired, not working, but may get into business a little. Have no business experience, so I'm ... A: Charles, Take it out of the abstract and apply to your daily living. You go to work and get paid ... | |
| PAYROLL | 1/19/2006 |
| Q: SIR I NEED TO KNOW HOW I CAN OBTAIN A W-2 FROM GOODWILL INDUSTRIES AS SOON AS POSIBLE. ... A: By law they have to give it to you by January 31. If you need it sooner, you have to ask the payroll ... | |
| Accounting Dept - Do they have access to everybody's salary | 1/9/2006 |
| Q: I am aware that HR and my boss knows how much I make. Do the people in accounting have access to ... A: Somebody does there. However, it is very sensitive and if somebody from accounting or HR were ... | |
| Accounting basics as they relate to layoffs | 1/8/2006 |
| Q: Help! I think that I'm going through some weird irrational guilty phase here. I make about $45,000 ... A: No, labor doesn't work that way. Other factors such as education and experience and productivity ... | |
| payroll | 12/30/2005 |
| Q: How can I determine what my gross weekly, monthly or yearly salary should be in order to net $1,100 ... A: Without knowing some your unique deductions, the rule of thumb for figuring out what your gross ... | |
| 401k | 12/24/2005 |
| Q: I am trying to figure out how much money I should have in my personal 401k. I have had commission ... A: Here's an easier way, figure out what you need in retirement, when you plan to retire and how much ... | |
| How to Classify Corporate Unearned Income | 12/19/2005 |
| Q: I know that when a customer pre-pays for services, a corporation books it as unearned income, and if ... A: Prepaid items that a company owes is kept on the balance sheet as a liability. It should be its own ... | |
| Owners equity | 12/18/2005 |
| Q: I know my question is going to seem very trivial, but I am really looking for some guidance here. ... A: The owners and investors are synonyms. They receive their return only after all other stakeholders ... | |
| accounting | 12/8/2005 |
| Q: I'm taking a class right now and I have a question about where to journalize a transaction. It says: ... A: If you bought the parts then you do as you have. If there is an inventory of spare parts, which ... | |
| hsa | 11/25/2005 |
| Q: I was shopping for insurance and a health savings accounnt (hsa) was brought up. I was told that the ... A: The HSA lets you set aside pretax dollars to pay for medical expenses. The deduction for bills you ... | |
| 401k | 11/24/2005 |
| Q: I am currently living in Australia with my new husband and have done for the last 5 years. I intend ... A: Amy, Contact the companies that you worked for. They probably have an old address for your 401k ... | |
| Profit | 11/14/2005 |
| Q: Is It wise for a decision maker to take into account more than profit when making decisions that ... A: A company needs to consider all stakeholders when making a decision. Profit is first and foremost. ... | |
| 401K | 11/7/2005 |
| Q: Recently my company offered me the opportunity to participate in their 401K. My question is ... A: To answer your questions, 1. you can contribute 18,000 for 2005 at age 53. 2. Probably not, check ... | |
| small business expenses | 11/4/2005 |
| Q: You may not be able to help as I assume you are U.S based. I run a small gardening business, a sole ... A: Being US based, I'm not exactly sure how Revenue Canada would look at it, but the return of capital ... | |
| transfer funds to next year | 11/3/2005 |
| Q: Sub S company. Next fiscal year will be very low on income. In fact, may not be any after 15 ... A: I don't understand your problem. The company is failing to show a profit due to low sales, ... | |
| Accounting / Advice | 10/16/2005 |
| Q: I work for a corporation and my boss told me to do the following in order to bring the profit ... A: This is the type of thing that sent the guys from Worldcom to jail. If you have a plan for ... | |
| Fiscal Years | 10/14/2005 |
| Q: Why does a Fiscal Year exist? (ie, how does a company benefit from not operating on a calendar ... A: A fiscal year exists for the convience of recordkeeping. Often it matches when the company started. ... | |
| accounting | 10/9/2005 |
| Q: i need you opinion regarding the following If some one has the access to the company's income ... A: If somebody is being very clever, then finding fraud through the basic financial statements would be ... | |
| Payroll for deceased employee | 10/6/2005 |
| Q: Do the payroll checks following the death of an employee (vacation, sick, last hours worked) need to ... A: This comes under the heading of Income in Respect of the Decedent. (IRD) The payroll should be made ... | |
| Payroll Record Keeping | 10/4/2005 |
| Q: I am currently in a legal battle with a former employer over wages. I have supeoned the payroll ... A: For all mattters regarding taxes, the records should be kept for 5 years. Personnel records are ... | |
| Independent contractors | 9/23/2005 |
| Q: I have 2 salespeople working for me (they are not employees of my company). To ensure the IRS knows ... A: If they are contractors then at the end of the year you'll provide them with a 1099 form. If you use ... | |
| Arthur Anderson | 9/9/2005 |
| Q: I'm doing research on Arthur Anderson, and i need your opinion in regards to what do you think were ... A: They were greedy. They allowed the auditing business to be corrupted by the highly profitable ... | |
| Can do some accounting job by telecommuting | 9/4/2005 |
| Q: I would like to know whether it is impossible to outsouring some kind of accounting job by ... A: It is possible, but you need to tighten up your English so that it feels like you are local. The ... | |
| Taxability of Income | 8/12/2005 |
| Q: We are setting up an LLC. The primary financier will be the largest percentage owner of the co. If ... A: There is nothing wrong for him to get a salary, just that being a salaried employee is one thing and ... | |
| Taxability of Income | 8/11/2005 |
| Q: We are setting up an LLC. The primary financier will be the largest percentage owner of the co. If ... A: A salary is for an employee and money invested comes from an investor and he gets paid back with a ... | |
| Balance Sheet entry | 8/4/2005 |
| Q: What balance sheet account is used for both credit card accounts and a bank line of credit? Also, ... A: Both are current liablities, if the credit line is significant it should have its own line on the ... | |
| Specialized accounting needs | 8/3/2005 |
| Q: -For years we have struggled with an inappropriate accounting package for our business, so we are ... A: If you have a trade association, ask them. If you attend a meeting ask your peers. I am assuming ... | |
| New Personal Business | 7/19/2005 |
| Q: My husband and I will be registering our cabinet making business shortly. He is currently the bread ... A: Their maybe an advantage to having it in your name for being classified as a women owned business. ... | |
| 401K | 7/14/2005 |
| Q: I have a 401K plan at work for the last 4 years. I am putting 325 per week as my contribution. The ... A: Ask from your benefit people for a participant summary. If they have changed from a defined ... | |
| Accounting | 7/13/2005 |
| Q: Why would a company want a separate bank account for payroll? A: It is a good idea to separate your payroll liabilites from the rest of the company business. For ... | |
| Payroll accounts | 7/13/2005 |
| Q: Why do some companies have a sperate bank account for payroll checks ? What are the pros and cons of ... A: It is a good idea to separate your payroll liabilites from the rest of the company business. For ... | |
| finance | 7/6/2005 |
| Q: are my other answers correct? the third rate in part b is an average? so i should have taken ... A: I usually don't do homework problems, but I'll try and help you see the light here. The third part ... | |
| finance | 7/6/2005 |
| Q: I have a question to ask you and I want to show you what i have done so I am on the right track. Can ... A: Here are the clues to finishing the work: the third rate in part b is an average. Part c: She can ... | |
| Accounts Receivable analysis | 6/15/2005 |
| Q: My boss says I am wrong to use 360 days when calculating the Accounts Receivable TurnDays. He ... A: Look in text book and you'll see 360 being used. It's easier to compute. The difference is about ... | |
| severence pay and 401k | 6/8/2005 |
| Q: my employer is laying off many of our employees and is giving a lump severence payout. we are being ... A: David, Severance is different. For one thing in most states it is not a right unless you have union ... | |
| charges | 6/1/2005 |
| Q: I am doing payroll for a contractor and hope to soon get more clients out of my home. Currently the ... A: What type of time is involved? Most payroll services charge a set up fee, then it is a function of ... | |
| Accounting Basics | 5/26/2005 |
| Q: This may seem like a stupid question - but I can't figure out where my money is! I own a small ... A: I doubt it. It is more likely the way you are accounting for things and putting them into your ... | |
| Accounting Basics | 5/26/2005 |
| Q: This may seem like a stupid question - but I can't figure out where my money is! I own a small ... A: You are confusing profit for money in the bank. They are not the same thing. Keeping it simple,you ... | |
| Single-member LLC - GAAP accounting for salary | 5/9/2005 |
| Q: I am trying to create financial statements for a single-member LLC. The LLC still exists. I need ... A: The llc is the same as the corporation as far as reporting. I have a hard time justifying the ... | |
| Single-member LLC - GAAP accounting for salary | 5/9/2005 |
| Q: How do I appropriately account for the salary and/or draws of the only member of a single-member LLC ... A: What are you trying to do? Does the LLC still exist or not? You do the income statement and ... | |
| Dental Plan | 3/28/2005 |
| Q: If a company offers medical plan which does not include dental and offers an internal dental plan, ... A: The key test for an employee benefit is if it is offered to all employees. The standard ... | |
| Payroll Deductions | 3/15/2005 |
| Q: I am an owner of a small business in New Jersey. I am at the point of hiring my first employee. I ... A: You may have to get Workers comp insurance. Contact the tax department for the state of New ... | |
| taxes / record keeping | 3/9/2005 |
| Q: Good day! I have a short question on taxes. Recently started a small business a few months ago. ... A: Use either an excel spreadsheet or paper and create the accounts. If you have the receipts for the ... | |
| Equity line used to pay salary | 3/6/2005 |
| Q: -Ed - Based on your response, if he gives me a 1099 as a contract employee or we treat it as a loan ... A: By the way you explain things, it should work out that way. As a future reminder, you should put ... | |
| Equity line used to pay salary | 3/5/2005 |
| Q: Ed - I have an unsual situation as follows. I am semi-retired and about a year ago a friend was ... A: David, Have him pay you with a 1099 (contract employee), not as a W-2 employee. That way he reports ... | |
| 401K | 3/1/2005 |
| Q: Our company changed ownership. We were told we cant touch the money in the old companies 401K even ... A: First call the human resources department and get in writing why. They should provide you with the ... | |
| payroll for sole proprietorship | 2/21/2005 |
| Q: my husband has a sole proprietory business he is the only person & i do the office work. we do not ... A: Call the insurance carrier and tell them same thing. Ask what will pass as a substitute for a W2. ... | |
| being a salary employee | 2/16/2005 |
| Q: i was a salary employee before the new law went into affect in 2004, then they wanted me to go back ... A: You are either non-exempt or salaried (exempt) there is no such thing as non-exempt salaried ... | |
| fixed assets | 2/8/2005 |
| Q: i bought a business and entered the assets at the purcahse price (I got a very good deal). Now I am ... A: The technical accounting answer is that fixed assets, except for land, depreciate and ending being ... | |
| Inventory | 2/1/2005 |
| Q: We are a very small company (6) in truck controls. My question is how do we substitute parts? We use ... A: I'm not familar with that software. Is there a space in the BOM that allows to identify for ... | |
| Record Keeping | 1/30/2005 |
| Q: I am a licensed acupuncturist and plan on giving the "paid online surveys" thing a whirl. If the ... A: I have never know those things to be that busy or pay that much to merit a lot of tracking. But ... | |
| Setting up IP asset on the books of early stage company | 1/28/2005 |
| Q: I am working with an entrepreneur who has developed a software program over several years within a ... A: The real value of the software will be in the revenue that it will generate. You can value it at ... | |
| Setting up IP asset on the books of early stage company | 1/28/2005 |
| Q: I am working with an entrepreneur who has developed a software program over several years within a ... A: First off, how did you get 600k? Are there other potential shareholders today? As you incorporate ... | |
| Deferred payroll and Subchapter S. accounting | 1/22/2005 |
| Q: Can you please brief me on the details of accounting for deferred wage/pension payments. If too ... A: You can get detailed instructions if you go to http://www.irs.gov/instructions/i1120s/index.html ... | |
| Moving and compensation | 1/20/2005 |
| Q: When moving a company and all employees, about 20 people, what expenses typically should a company ... A: That is the very tip of the iceberg. Get a relocation expert, usually within real estate companies. ... | |
| payout | 1/4/2005 |
| Q: I will be 70 1/2 shortly & need to know how much must I take out a yr so I do not get any penalty. I ... A: IF you are retired, I would suggest rolling the 401k into an IRA. There are estate and other ... | |
| Payroll Deduction | 12/20/2004 |
| Q: I need to become informed on what payroll deductions should be taken from employees wages. Do you ... A: To find what to has to be taken out, go to www.irs.gov and your local tax department for city and ... | |
| Treatment of estimated income tax in books of acount | 12/16/2004 |
| Q: Is the final tax payment an expense item in P&L or do I show it in the balance sheet? I guess I am ... A: The tax comes off as an expense, through the Income Statement after gross margin it is in the next ... | |
| Treatment of estimated income tax in books of acount | 12/16/2004 |
| Q: I am employed but also have some additional income from some consultancy work I do in private. I do ... A: I would expect you are taking the tax expense and showing pre paid taxes as an asset. At the year ... | |
| career planning | 12/14/2004 |
| Q: WHAT SCOPE IS THERE FOR A STUDENT WHO IS DOING ALEVEL IN ALL BUSINESS SUBJECTS THE SUBJECTS ARE ... A: First, don't use all capital letters, it implies you are yelling. What do you like best? Where is ... | |
| How to calculate recoup of investment | 11/17/2004 |
| Q: -Thanks for your answer. I understand your inability to address regional issues with vending ... A: Okay, with recovering the sunk cost of the 17k, treat it as overhead, 36 month depreciation schedule ... | |
| self employment taxes | 11/5/2004 |
| Q: We have a S-coorporation..Three partners.We pay 1/2dividends and he other half officers salary(our ... A: No, the IRS will expect a reasonable salary number. Auditors tell me it is the one of the surest ... | |
| Depreciation Expense vs Accumulated Depreciation | 10/30/2004 |
| Q: I am taking accounting 1 on line. I need some help understanding depreciation expense vs. ... A: I usually don't do homework questions, because somebody is trying to get me to do their homework for ... | |
| 2nd Mortgage for Business Purchase | 10/7/2004 |
| Q: The purchase was of a sole proprietership and my client is a sole proprieter. I showed the money in ... A: To separate the business from the personal, I would say the loan belongs to the owner and money is ... | |
| Cash-out Option | 10/7/2004 |
| Q: I am a former employee of a company which I was fully vested within the time frame I was there. once ... A: Go and read the plan document. The information is there and what the rep told you accurate. This is ... | |
| 2nd Mortgage for Business Purchase | 10/6/2004 |
| Q: I have a client who took a 2nd in order to buy a chiropractic practice form someone with whom he had ... A: I'm assuming that this isn't a C or S Corp. The loan is an obligation of the business. Is the 100k ... | |
| Accounting | 9/21/2004 |
| Q: I'm trying to get accounting info from kraft foods inc. I went to there web page and found the ... A: I usually don't do homework questions, but this is straight forward. Call Kraft Foods, the investor ... | |
| General Journal Question | 9/15/2004 |
| Q: The amount of expenses is material therefore the A/R is set up. What should be the offset be to the ... A: If your clients are picking up all the consultants travel, lodging, per diem, et al, and for the ... | |
| General Journal Question | 9/14/2004 |
| Q: This question pertains the general journal accounting practice associated with an corporate employee ... A: How material is the amount? If it is relevant, I would create the a/r account for the expenses due. ... | |
| accounting for deferred comp plans | 9/9/2004 |
| Q: Let's say you have a deferred comp plan that has $100,000 in it invested in a mutual fund. At the ... A: Brad, When you asked the CPA what the other side of the entry was, what did he say? He's got to ... | |
| accounting for deferred comp plans | 9/9/2004 |
| Q: Let's say you have a deferred comp plan that has $100,000 in it invested in a mutual fund. At the ... A: Brad, Why the need for comp expense entry? I see the balance sheet entry because as of the end of ... | |
| Foreign Exchange Accounts | 9/8/2004 |
| Q: I've searched the net but can't find what I need. :-( I'm trying to find a simple guide to how to ... A: Try this link: http://www.financialmanagementdevelopment.com/slides/DAP142.htm Its been a while ... | |
| Extra income on payroll | 9/4/2004 |
| Q: The taxes aren't really the problem, but how do we document it, ex. mileage, daycare ... A: glenda, How are you doing your benefits now? Think of it as self-insured, they are their own ... | |
| Extra income on payroll | 9/3/2004 |
| Q: If an employee doesn't want our insurance, how can we pay them for not taking it? How can we put ... A: I assume the issue is you don't want to have it go through regular payroll for the taxes? Go to ... | |
| 401K to a pension fund | 9/1/2004 |
| Q: I have what is most likely a simple question. My husbands company was bought out last year and they ... A: You should get a package from the benefits area of the human resources department explaining ho the ... | |
| Internships | 8/26/2004 |
| Q: I realize that this question may not be totally relevant to your area of expertise but any other ... A: Now is the time to start looking for next summer. Go to the firms you are interested in and look at ... | |
| Small bisiness | 8/21/2004 |
| Q: We have a small s-corporation, Three partners, and contractors(self employees working for us).We ... A: If the subcontractors are self employed , you shuld be paying them as 1099 employees. Which would ... | |
| Monthly Car Allowance | 8/16/2004 |
| Q: I want to add a vehicle allowance benefit for my traveling employees. I know that ....The 2004 ... A: You have a choice, the standard mileage or actual expenses but not both. Most people opt for the ... | |
| Starting an internet business | 8/13/2004 |
| Q: I have an idea for an Internet business, and was wondering when I should begin seeking the advice of ... A: First get as much free advice as you can. Check out the resources from the SBA, SCORE, your chamber ... | |
| Payroll question | 8/8/2004 |
| Q: I have got an opportunity where I can bill a company $72 per hour and then pay the contractor ... A: The rule of thumb is to add about a third of the hourly rate to get the employer's share of FICA and ... | |
| contractors vs employees | 8/7/2004 |
| Q: I'm starting a small business in NJ. Can you tell me what federal and state obligations I will have ... A: If you hire an employee, that would be a W-2 employee, you would have to pay the employer's share of ... | |
| Finance Charges for late payments | 7/31/2004 |
| Q: Believe it or not, the person who sent this note is the same person I've been dealing with for 1-1/2 ... A: It sounds like the boss doesn't want to deal with the problem. The money just doesn't add up for the ... | |
| Finance Charges for late payments | 7/30/2004 |
| Q: I'm hoping maybe you can answer and or clarify something for me. I've been working in a small ... A: My bet there is somebody new in charge and they want to change the rules. They are wrong, but have ... | |
| Accounting - refunded deposit and shipping | 7/28/2004 |
| Q: First of all, I'd like to ask if you have any recommendations of a good accounting/bookkeeping book ... A: For a book, The Dummies series are usually helpful. Also check local groups such as SCORE, the Small ... | |
| Pension Distribution | 7/22/2004 |
| Q: I have received an estimate of $3,080.80 per month in a straight life annuity, payments for my ... A: When you received your estimate of pension benefits, you should have gotten a couple of choices for ... | |
| Proper Accountants Procedure | 7/12/2004 |
| Q: Our arrangment was that he would take over for our former accountant on a monthly basis to do the ... A: If this created a big problem, then you may be well advised to seek another accountant. If ... | |
| Certifications | 7/1/2004 |
| Q: I wont take a lot of your valuable time. I graduated with degree in accounting and finance in May ... A: The hard question, what do you want to be? Both lead to fine careers, you need to focus on the ... | |
| Is it Accounts Receivables?? | 6/21/2004 |
| Q: it is very much appreciated! My family owns a bridal boutique in the San Francisco Bay Area and I ... A: First the order for a dress comes in, $1,000. The customer has signed a sales contract for the ... | |
| Closing Stock | 6/8/2004 |
| Q: Followup To Question - Hi, 1. Actually Im working in production department,and I do not understand ... A: This is a classic problem of inventory control and the reason for regular inventories and random ... | |
| Closing Stock | 6/7/2004 |
| Q: 1. Actually Im working in production department,and I do not understand why in every year, the ... A: Given what you told me, the accountants are using the more conservative number. They are acting ... | |
| tax exemption for certain business purchases | 6/1/2004 |
| Q: I am starting a beverage manufacturing business, and I wanted to know if the raw materials that I ... A: Check with your tax juristriction about exemptions for resale. You may need to get a registration ... | |
| payroll advise | 5/25/2004 |
| Q: The state of Fla. requires contractors to either obtain workmans comp or become a corp to be ... A: If the reason you changed is to avoid the cost of worker's comp, I would go to either a CPA or ... | |
| Starting an investment company... | 4/22/2004 |
| Q: I have had great success with stocks for the past ten years almost regardless of whether the market ... A: For the basic rules go to: www.nasd.com National Association of Securities Dealers, www.sec.gov The ... | |
Accounting, Payroll & Pension Issues
Answers by Expert:
Ed McFarland
Top Expert on this page
Expertise
Over 20 years of experience as a CFO, Controller and now Consultant to small businesses. Dealt with 401k, 403b, deferred comp plans, key man issues, disablity, business continuation plans, HSA plans and other benefit issues.
Experience
Management experience in Financial Services, Manufacturing, Media, Logistics. Taught graduate and undergraduate business courses.
Education/Credentials
MBA
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