Thursday, October 31, 2013
The Social Security Administration (SSA) has announced that Social Security and Supplemental Security Income (SSI) benefits will increase by 1.5 percent in 2014. The rates for Old-Age, Survivors and Disability Insurance (OASDI) and Medicare Hospital Insurance (HI) taxes will remain at a combined 7.65 percent in 2014. Based on the increase in SSI benefits, the maximum taxable earnings for OASDI purposes will increase from $113,700 to $117,000.
The SSA cost-of-living adjustments (COLAs) are based on the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of 2012 through the third quarter of 2013. For Social Security beneficiaries, the average monthly benefit amount for all retired workers will increase from $1,275 to $1,294. The monthly SSI federal payment standard for an individual will increase from $710 to $721; for a couple, the payment will increase from $1,066 to $1,082.
For the year in which an individual attains full retirement age, the retirement earnings test exempt amount will increase from $40,080 a year to $41,400 a year. The test applies to earnings for months prior to reaching full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit. No limit on earnings will be imposed beginning in the month in which the individual reaches full retirement age.
For retirees under full retirement age, the retirement savings test exempt amount will increase from $15,120 a year to $15,480 a year, with $1 withheld for every $2 in earnings above the limit.
Social Security Administration Press Release, Social Security Announces 1.5 Percent Benefit Increase for 2014, 2013FED ¶46,546
Social Security Administration Fact Sheet, 2014 Social Security Changes, 2013FED ¶46,547
Code Sec. 1401
CCH Reference – 2013FED ¶32,543.01
CCH Reference – 2013FED ¶32,543.07
CCH Reference – 2013FED ¶32,543.26
Code Sec. 1402
CCH Reference – 2013FED ¶32,580.01
Tax Research Consultant
CCH Reference – TRC INDIV: 63,050
CCH Reference – TRC INDIV: 63,052
CCH Reference – TRC INDIV: 63,054
CCH Reference – TRC INDIV: 63,060
CCH Reference – TRC INDIV: 63,100
CCH Reference – TRC INDIV: 63,108
CCH Reference – TRC INDIV: 63,500
Friday, October 25, 2013
The Nebraska Department of Revenue has explained that the state constitution does not recognize same-sex marriages, and, therefore, persons in same-sex marriages must file Nebraska individual income tax returns separately utilizing either the single or the head of household filing status. These individuals must file separately for returns filed for tax years 2013 and beyond. The department guidance also applies to 2012 returns filed on or after September 16, 2013, and to late returns from earlier years filed on or after September 16, 2013. Specific guidance on filing Nebraska individual income tax returns for those in same-sex marriages will be included in the instructions for Form 1040N.
Revenue Ruling 22-13-1, Nebraska Department of Revenue, October 24, 2013, ¶201-129
Thursday, October 24, 2013
Do you have tax clients who run small businesses or decided to sell their household items on eBay this past year? Or perhaps you are a CPA who accepts credit card payments from your clients? If so, you may have already received a notice from the IRS or should be aware of the latest updates on the IRS push for information matching with Form 1099-Ks (Payment Card and Third Party Network Transactions). Some AICPA members have received 1099-K mismatch notices assessing thousands of dollars in penalties. Less than a year ago, the AICPA raised the topic in a about a major that requires merchant card companies to report gross receipts on Form 1099-K. At the time, the IRS was carrying out a compliance program that sent notices to small business taxpayers in order to match their sales information with merchant provided Form 1099-K reports. The program was used to ensure business taxpayers were reporting adequate income from their credit card receipts. A driving force behind this decision was the growing US , as IRS data indicated that a major source for the gap was related to underreporting of business income on individual tax returns. (See )
As a result, many taxpayers, especially self-employed Schedule C filers, are beginning to receive notices related to Form 1099-Ks. In these notices, the IRS is providing such as "Read the notice thoroughly and complete any worksheets" and "gather tax records including the 1099-Ks that were received and determine accuracy of the notice about the underreporting of gross receipts."
According to the IRS, these notices are being sent to taxpayers who "may have underreported their gross receipts" or their Form 1099-Ks show an "unusually high portion of receipts from card payments" that do not match the receipts reported on their filed tax returns. However, back in October 2010, the IRS stated it would not require businesses to reconcile their gross income with third-party receipts. These notices seem to be a direct contradiction to that statement.
CPA and business owner Jonathan Horn (chair of AICPA's Individual and Self-Employed Tax Technical Resource Panel), explains: "The IRS is on record saying they are not going to ask people to reconcile, but now they ask taxpayers to prove why their numbers are right… these (underreporting) notices imply 'we think you're wrong, prove that you're innocent.'"
Horn points out there are many obstacles and issues the IRS would face if it attempted to match third-party receipts to 1099-K reports. For example, some businesses allow customers the option for cash back on credit cards, but the Form 1099-K does not account for cash back and gross sales amounts separately. This creates a situation where a credit card may show $200 in receipts, while only $100 resulted from the actual sale of merchandise and the other $100 was cash back to customers.
Many small business owners are self-employed Schedule C filers with very few accounting resources. It is clear that the matching of gross receipts on individual returns to information reported by merchant card companies is a growing issue for them. While the IRS continues to develop and in this area, the AICPA will monitor this issue and keep our members updated on new information and resources through our web page. We welcome comments from members that have clients who receive notices involving merchant card reporting and any further questions.
For more information:
Amy Wang, Technical Manager - Tax, American Institute of CPAs. Amy serves as the technical manager for the Individual & Self-Employed Tax Technical Resource Panel, as well as the Exempt Organizations Tax Technical Resource Panel and related task forces. She also sits on the planning committee for both the AICPA Not-for-Profit Industry Conference and the Conference on Tax Strategies for the High-Income Individual. Prior to the AICPA, Amy worked for Deloitte in Business Tax Services. She has public accounting experience in federal and state taxation and holds a BS in Accounting with a Minor in International Business from Penn State University.
image via Shutterstock
Wednesday, October 23, 2013
While most tax practitioners are aware of the many tax changes that are effective for the 2013 tax year, many taxpayers may not be. They may be surprised to learn that the tax landscape has shifted precipitously for those who find themselves on the wrong side of a new divide between "middle class" and "higher earners." These higher earners are now subject to an array of new taxes, higher rates, and stringent deduction limits.
Effective in 2013, new rules impose significantly higher taxes on higher earners, increasing the importance of tax awareness and tax planning. Under the Affordable Care Act (P.L. 111-148, 3/23/2010 and P.L.111-152, 3/30/2010, collectively) there is a higher payroll tax and a surtax on the unearned income of higher-income individuals. Under the American Taxpayer Relief Act of 2012 (P.L. 112-240, 1/2/2013), higher tax rates apply to ordinary income, capital gains and dividends, while at the same time limitations are imposed on the use of the personal exemption and itemized deductions. This article highlights these changes.
Brave new tax world. For tax years beginning after Dec. 31, 2012, the following rules apply:
- Increased payroll tax for high-earning workers and self-employed taxpayers. An additional 0.9% hospital insurance tax (i.e., a component of the Federal Insurance Contributions Act (FICA) payroll tax imposed on wages) applies to wages received with respect to employment in excess of: $250,000 for joint returns; $125,000 for married taxpayers filing a separate return; and $200,000 in all other cases. The additional 0.9% tax also applies to self-employment income for the tax year in excess of the above figures.
- Surtax on unearned income of higher-income individuals. An unearned income Medicare contribution tax is imposed on individuals, estates, and trusts. For an individual, the tax is 3.8% of the lesser of: (1) net investment income or (2) the excess of modified adjusted gross income over the threshold amount ($250,000 for a joint return or surviving spouse, $125,000 for a married individual filing a separate return, and $200,000 for all others). For surtax purposes, gross income doesn't include excluded items, such as interest on tax-exempt bonds, veterans' benefits, and excluded gain from the sale of a principal residence.
- Higher individual income tax rates apply to higher-income taxpayers.The income tax rates for most individuals stay at 10%, 15%, 25%, 28%, 33% and 35%, as in 2012. However, a new 39.6% rate applies for 2013 for income above $450,000 for joint filers and surviving spouses; $425,000 for heads of household; $400,000 for single filers; and $225,000 for married taxpayers filing separately. These dollar amounts are inflation-adjusted for tax years after 2013.
- Capital gain and dividend rates rise for higher-income taxpayers.TThe top rate for capital gains and dividends rises to 20% for 2013 (up from 15% in 2012) for taxpayers with incomes exceeding $450,000 for joint filers and surviving spouses; $425,000 for heads of household; $400,000 for single filers; and $225,000 for married taxpayers filing separately. In comparison, for taxpayers whose ordinary income is generally taxed at a rate below 25%, capital gains and dividends are subject to a 0% rate, and taxpayers who are subject to a 25%-or-greater rate on ordinary income, but whose income levels fall below the above thresholds, are subject to a 15% rate on capital gains and dividends. Further, the rate under the alternative minimum tax—a tax system separate from the regular tax, designed to limit certain tax benefits—also rises from 15% in 2012 to 20% in 2013 for capital gains and qualified dividends otherwise subject to the 39.6% regular tax rate.
- Personal exemption is limited for high earners. There is a personal exemption phaseout (PEP) for 2013 with a starting threshold of $300,000 for joint filers and surviving spouses; $275,000 for heads of household; $250,000 for single filers; and $150,000 for married taxpayers filing separately. Under the phaseout, the total amount of exemptions that can be claimed by a taxpayer is reduced by 2% for each $2,500 (or portion thereof) by which the taxpayer's adjusted gross income exceeds the above threshold. These dollar amounts are inflation-adjusted for tax years after 2013.
- Itemized deductions are limited for high earners. There is a limit on itemized deductions for 2013 (i.e., the "Pease" limitation) with a starting threshold of $300,000 for joint filers and surviving spouses; $275,000 for heads of household; $250,000 for single filers; and $150,000 for married taxpayers filing separately. Thus, for taxpayers subject to the "Pease" limitation, their itemized deductions are reduced by 3% of the amount by which the taxpayer's adjusted gross income exceeds the threshold amount, with the reduction not to exceed 80% of the otherwise allowable itemized deductions. These dollar amounts are inflation-adjusted for tax years after 2013.
While there is a real prospect that high earners will pay more taxes this year, tax practitioners and taxpayers should both keep in mind that it's almost never too late to better a taxpayer's tax situation, minimizing taxes to the greatest extent possible. Year-end tax planning may be especially productive this year because timely action could nail down a host of "extender" tax breaks—individual and business tax provisions that are due to expire at year's end.
In addition, other tax move may be prove advantageous. Many taxpayers can still better their tax position by acting now to make the most of enhanced expensing and depreciation; keep adjusted gross income (AGI) down to avoid reduction (or elimination) of the many tax breaks that phase out over higher levels of AGI; make the best tax use of losses; and take full advantage of the available tax credits.
Monday, October 21, 2013
Tax preparer who bilked IRS out of $4M for poor clients: Fraud a 'spiritual calling' - seattlepi.com
When it comes to your position on Obamacare, financial guru Dave Ramsey says political parties don't matter—only math.
"Your health insurance premiums are going to go way up," Ramsey said on his Oct. 4 show. "They have to . . . it's not a political statement. It's that I know how to do math."
Starting January 1, every health insurance company in America is required to take anyone as a customer, regardless of their health, and cannot charge them more. Before Obamacare, insurance companies charged "sick" people higher prices because they were receiving medical care more often. But Obamacare forces healthier (often younger) people to pay for that care. While Ramsey understands the moral underpinnings, he said it doesn't change the math — you will be forced to pay more.
If your insurance has not gone up, your employer's has, and he will likely pay for this by cutting expenses that directly affect you—something Ramsey calls a "pass through."
"Employers aren't going to pay for this," Ramsey said. "They aren't going to accept less profit. They're going to cut expenses like not hire as many people or not give as many raises . . . you are going to pay for it."
For those Americans who don't have a job and rely on the government for help, you will not pay for it; the rest of America will, Ramsey said.
Make sure to watch the clip of Ramsey's show above. He goes into more detail and explains how Obamacare will affect every American—party politics aside. Don't have time to watch the whole video? He condenses his point about Obamacare's mandates and penalties into about 40 seconds around 8:10:
Anytime you force you force everyone to be on the same playing field, you force income reallocation . . . regardless how you feel about it or what your moral imperative is, you still have the same net result mathematically.
The more we look into Obamacare, the more we realize that we're being forced to do this. You don't get the option of not participating. You are going to pay a fine. Your employer's going to pay a fine. Your employer's going to pay higher fees.
Saturday, October 19, 2013
National Organization for Marriage Sues IRS for Disclosure of Tax Returns | Daily News | NCRegister.com
Thursday, October 17, 2013
Though it sounds like the answer to an obscure trivia question, a significant event recently occurred in the United States that doesn't involve the government shutdown or the looming debt ceiling. On October 3rd, 1913; The United States Revenue Act of 1913, known for supplementing lower tariffs by implementing personal income taxes, was signed into law by President Woodrow Wilson. Over 100 years later, some Americans remain uncertain about the soundness and application of income taxes.
The income tax, as it exists today, has grown far beyond its original confines as a source of revenue for the federal government. The tax code has extended into industrial and social policy and, as a result, it has grown wildly complex.
Income tax reform is an undying topic of discussion. America's income tax code has been in a constant state of change; whether it is Occupy calling for fair wealth distribution, the Tea Party's call for a "fair tax" plan, FDR proposing 100 percent top marginal tax rates, Kennedy and Johnson lobbying for lower rates, or the Reagan/Clinton/Bush/Obama administrations' search for improved tax reformation. This incessant debate has resulted in an enormous 73,954 page, 25 volume, amorphous blob that started out as a seemingly minuscule 400 pages with a relatively simple and transparent 1 percent to 7 percent progressive rate structure.
There is nothing simple about a work that approaches 74,000 pages and currently requires 6 billion hours of work by professionals to prepare return forms and comply with tax laws. Clearly, America's attempts at egalitarianism have been a constructive process that never seems to satisfy the demands of citizens or their elected officials.
It is human nature that we will look to improve our living conditions through all means possible, so it is safe to assume that we will continue to seek tax code improvement and reform.
On one hand, we can continue to make progressive changes through sophistication that, extrapolated based on past growth data, will lead to a multi-million page skyscraper. On the other, it is possible to attain growth through subtraction by putting forth the effort towards improving tax policy through simplification. At the Tax Foundation, we promote any move towards simpler, more transparent, and more neutral tax policy. Those are the principles tax reformers should keep in mind.
Wednesday, October 16, 2013
How customers find you is important to know. If you pay for advertising, attend networking functions, belong to associations and have people refer to you, you want to know which marketing channels are best to use – and which you might want to drop. You may also want to reward those who refer to you, whether it is a simple thank you note or a gift of some kind.
Tracking the source of leads and referrals can be very useful!
Since you already track your sales in QuickBooks®, why not track your source for a lead? There are a few ways you can do this in QuickBooks:
- Enter the source of the lead in your notes. However, the problem with this method is that it's hard to get any reporting to help you see your top marketing channels and referral sources.
- Use a custom field. Once you create a custom field, you can use it in reports and templates so I love using them. To create a custom field for a customer, click on the Additional Info tab then click on the Define Fields (lower right-hand corner), then enter the name of the field and click on the Cust column.
If you use Enterprise, you can even have a drop-down list, so names are consistent.
To see sales dollars from your leads, BE SURE to have this custom field on your invoice (does not need to print) as shown below. FYI, while the Other field seems nice, you can't access that information from a report, but you can access your custom field.
To get a report is a few steps, but you can memorize the report so it's a one-time setup.
- Click on Reports>Sales>Sales by Customer Detail
- On the Display tab, scroll down and select Source of Lead and click on/off any other fields you want or don't want.
- You can export out to Excel to get totals, eliminate those where source of lead is blank, etc.
I found personally, that when tracking with Custom Fields, there was no easy way to filter for referrals, so I used R for referral (as opposed to some other lead source) and had a 2nd custom field where I could list the name. That way I could filter on R and sort by the name. Also, if the leads came from other sources (such as a conference or a networking function), all the "Rs" would still be together if you sorted on the Source of Lead column.
The problem with the Custom Field method is it is somewhat cumbersome (unless you use a third-party reporting tool) and QuickBooks won't total by a custom field, hence exporting to Excel.
3. A simpler method I've started using, is the Sales Rep field. If you really have sales reps, this might not work, but if you don't have a sales team, you might like using this field instead. QuickBooks has a built in report that lets you track your sales by sales rep (summary or detail) – much faster than exporting to Excel and sorting. Again, be sure the Sales Rep shows on your invoice (does not need to print).
On October 17th, the government will reach the debt ceiling if Congress does not pass legislation to raise its borrowing limit. As opposed to the government shutdown, which has not had much impact on the economy outside of Washington D.C., breaching the debt ceiling could be a lot worse.
What is the Debt Ceiling?
The debt ceiling is a legally binding limit on the amount of national debt that can be issued by the treasury. Currently, the limit is set at $16.699 trillion. The debt ceiling was first created in 1917 as a part of the 2nd Liberty Bond Act.
Does the Debt Ceiling have Anything to Do with the Government Shutdown?
Although these two events are happening near one another, they are not related.
The government shutdown is a result of the fact that Congress was unable to pass a budget to fund the government. According to the Constitution, Congress must pass a budget. Otherwise, when the fiscal year ends, the government can no longer stay open. (Of course, most of the government still operates since its funding is independent from the budget process).
The debt ceiling is set independently in separate legislation and dictates not how much the government can spend, but how much it can borrow.
Interestingly they do slightly interact with one another. Since the government shutdown stops payment for certain activities in the government, it marginally lowers the amount the government needs to borrow. However, this really doesn't make much of a difference. According to the Washington Post, the government will still exhaust it cash balance by the end of October even with a shutdown due to the fact the government still needs to spend billions on mandatory benefit payments.
What Happens When We Reach the Ceiling?
Once the U.S. government reaches the debt limit, it can no longer take on any more debt. In other words, it will be left with the cash it has on hand.
According to analysis by the Bipartisan Policy Center, the month after the government breaches the debt ceiling treasury will collect $222 billion. However, it will owe $328 billion.
This means that the government will no longer be able to pay all of its bills and may not be able to pay the interest on its debt and could default.
What would a Default mean for the Economy?
As opposed to the government shutdown, which won't have much effect on the economy, a default on the debt would definitely affect the economy.
Currently, there are about $16.7 trillion of outstanding U.S. bonds. Those who hold the treasuries would risk not getting paid. This could drive up the cost of borrowing money, reduce the value of many investments, and greatly slow down the economy.
In addition, most of the bonds are owned by the Social Security Trust fund. If the government cannot pay interest on the debt it owes itself, Social Security may not be able to pay all of its benefits.
Can we Avoid Defaulting without Raising the Debt Ceiling?
This is what a lot of the current debate on the debt ceiling is over. While the Obama administration claims that reaching the debt limit will mean default, some Republicans are saying there are ways to prevent a default even if the government reaches the ceiling.
Specifically, politicians are arguing over whether the treasury can prioritize its payments. This means that the treasury can pick and choose which payments to make when the money comes in. For instance, of the $222 billion that the treasury receives in a month, it could choose to pay all of the interest payments that come due and ignore other payments. This would lessen the impact of breaching the debt ceiling.
However, some have pointed out that this may not even be legal or feasible. According to Treasury officials the U.S. government payment system is so complex it may not be possible to pick and choose which bills to pay in time to prevent a default. Even if it were possible, it may not be legal. According to a Bipartisan Policy Center Expert in the Washington Post, "Anyone who says they know whether this is legal is not telling the truth."
How about using "Extraordinary Measures?"
Currently Treasury has been employing what are called "extraordinary measures" since May of this year in order to pay the government's bills. Simply, these are ways the government can raise extra money if it can no longer borrow.
These measures include suspending investments of the "Thrift Savings Plan G Fund" and other funds, suspend issuances of new securities to the Civil Service Retirement and Disability Fund, and suspend the issuance of new State and Local Government securities.
The Treasury has actually been using these measures since May when we officially hit the debt ceiling. October 17th actually marks the day on which these measures are exhausted.
How many Times Has the Government Raised the Debt Ceiling?
This is not the first time the debt ceiling has been raised. In fact, the debt ceiling has been raised 74 times since March of 1962.
Chart from Cato
Has the Government Ever Defaulted on its Debt?
Although the talking point coming out of the Obama administration is that the government has always made its payments, the U.S. government has defaulted before.
According to a Politico article, there were two defaults in American history. One following the War of 1812 when the government could not pay its bill on account of the fact that D.C. was burned to the ground. The second time in 1979 when there was a "glitch" at Treasury that delayed payment to bond holders.
As a result of the most recent default, interest rates on treasury bills spiked 0.6 percent, leading to an increased borrowing cost for the U.S. government of about $12 billion.
Americans are currently healthier than at any time in history, live in cleaner environments than most of the world, and have access to more of the best educational institutions. Economic freedom and the free market encourage a competitive environment that helps to produce the best social outcomes for citizens.
According to research by The Heritage Foundation, students from countries with higher levels of economic freedom stay in school longer and have higher test scores.
For decades, the U.S. was a leader in economic freedom and a model of the free market. Thanks to the prosperity that this freedom has brought, we have been able to solve complex social issues such as illiteracy, disease, and environmental degradation. But our freedom is slipping. Since 2007, economic freedom in the U.S. has been declining.
If we want to maintain the wonderful quality of life we enjoy now—with good education, good health care, and clean environments—we must get back to the basics of economic freedom: respect for the rule of law, limited government, efficient regulations, and open markets.
Tuesday, October 15, 2013
Ohio ~ Personal Income Tax: Guidance Issued for Same-Gender Taxpayers Filing a Joint Federal Return #DOMA
The Ohio Department of Taxation has issued a personal income tax information release offering guidance for taxpayers who are filing a joint federal income tax return with someone of the same gender and who are filing an Ohio income tax return. The release states that Ohio does not recognize marriage between persons of the same gender. Individuals who entered into such a marriage in another jurisdiction may not use the filing status of "married filing jointly" or "married filing separately" when filing Form IT 1040. Each individual must instead file an Ohio return in accordance with the following guidelines:
— File a separate Ohio income tax return using Form IT 1040 and check the box on the first page indicating that Schedule IT S will be filed.
— Use the filing status of "single" or, if qualified, "head of household."
— Complete Ohio Schedule IT S, Federal AGI to be Reported by Same-Gender Taxpayers Filing a Joint Federal Return, which is a supplement to Form IT 1040. This is a schedule on which individuals must allocate the federal adjusted gross income ("federal AGI") reported on their joint federal income tax return. The schedule enables each individual to determine federal AGI using the filing status of "single" or "head of household." These amounts must be reported as the individuals' federal AGI for Ohio purposes including, but not limited to, on line 1 of the IT 1040. One Schedule IT S must be completed and a copy submitted with each individual's IT 1040 return.
— Taxable year 2013 returns may be filed electronically using Ohio electronic filing services or by paper. Original returns for taxable years 2012 and prior must be filed via paper. Taxpayers may not file any of these returns using Form IT 1040EZ or TeleFile.
Although the IRS Revenue Ruling permits same-gender couples to file amended federal returns to change filing status to "married filing jointly" or "married filing separately", no corresponding Ohio amended returns may be filed to change filing status for prior years.
Individual Income Tax – Information Release IT 2013-01, Ohio Department of Taxation, October 11, 2013, ¶404-148
Monday, October 14, 2013
Doctor choice in Obamacare? Not so much
Claim that US Treasury has never defaulted on a debt goes too far, historians say - The Washington Post
Sunday, October 13, 2013
Friday, October 11, 2013
Year-End Tax Planning Ideas for U.S. Individual Taxpayers, Tax Planners, and Tax Preparers - MarketWatch
Yesterday, we poked fun with a parody video. Today, Twitter erupted with it's own mocking of the President's health-care law. The hashtag #MoreSuccessfulThanObamacare began trending this afternoon with people explaining what they thought was more successful than Obamacare.
Here are a few of the highlights:
— GenOpportunity (@GenOpportunity) October 10, 2013
#MoreSuccessfulThanObamacare Shaq at the freethrow line
— Josh Behm (@JoshBehm) October 10, 2013
#MoreSuccessfulThanObamacare Taylor Swift's relationships
— DirectionerForever:) (@_Directioner74_) October 10, 2013
#MoreSuccessfulThanObamacare The Delorean
— KBB (@keil_) October 10, 2013
— Juan Ramirez (@qb_ramirez) October 10, 2013
These are obviously in good fun, but the fact remains that Obamacare is unfair, unaffordable, and unworkable. It needs to be defunded.
*We apologize for any fans of sports teams mentioned that we may have offended.
You stay in control by accepting or ignoring the transactions before adding them to QuickBooks.
Downloading transactions is accomplished with one of the following methods:
- Direct Connect – Users will login seamlessly to the financial institution within QuickBooks. This is the method discussed in this article.
- Web Connect – Users will download a file from the financial institutions website and then import this file into QuickBooks also from the Banking, Bank Feeds menu.
Whether you are up-to-date with your transaction data entry or behind, Bank Feeds will help confirm, reconcile and add missing transactions. The result will be more accurate and timely reporting of your business expenses and account balances.
Set Up Bank FeedsIn just a few steps, you will be ready to download bank or credit card transactions into your QuickBooks file:
1. Verify your financial institution participates. From the menu bar, select Banking, Bank Feeds, Participating Financial Institutions. For participating banks or credit card providers, you must first establish online account access directly with the financial institution. You will need to enter the User ID and password when completing the remaining setup steps in QuickBooks.
2. From the menu bar, select Banking, Set Up Bank Feed for an Account. You can also access the setup from the New or Edit Account window, by selecting the Set Up Bank Feeds button at the bottom of the window. The Find Your Bank window displays.
4. If the bank or credit card participates, Step 2 in the Bank Feed Setup automatically displays. Type your User ID and Password. If you are having any troubles with the setup, contact information for your bank or credit card provider is listed on each of the setup windows.
Manage Bank FeedsHaving setup your bank or credit card accounts to accept Bank Feeds, you are ready to save time and improve data entry accuracy!
If this is your first time downloading data into QuickBooks, no worries; the Bank Feeds will do a great job of matching transactions avoiding any duplication. Or, perhaps you are behind on your data entry and will use the download to automatically create those missing transactions. Both needs are met very well with Bank Feeds. However, the period of time that is downloadable the first time with Direct Connect is controlled by the financial institution.
With each successive download, Bank Feeds will know what has already been downloaded and will add any new transactions. Let's get started with these simple steps:
1. To launch Bank Feeds, from the menu bar, select Banking, Bank Feeds, Bank Feeds Center.
2. The Bank Feeds Account Information displays. In the top right, with your cursor click the refresh icon or from the drop-down choose to Sync All For This Bank or Sync This Account. You are in control, choosing when to synchronize your file with the financial institutions online data.
4. The Bank Feeds Account Information window now displays details about the selected account. The at-a-glance summary of the balances per your bank/credit card as compared to the balances in QuickBooks is one of the many improvements made to QuickBooks online banking functionality. From this window you can:
- View the Transaction List of newly downloaded transactions
- Create new online checks, pay bills, transfer funds, send your bank/credit a message and other actions. (Your bank may charge a fee for these added online services)
- Create a credit card payment
- Contact your bank
- Disable bank feeds
- New to QuickBooks – transactions that have not yet been added to your QuickBooks file.
- Chg – transactions that have been changed due to a renaming rule.
- Auto – transactions that were automatically entered from following a specific renaming rule.
- Add/Approved – transactions that you have approved while viewing the Transaction List.
- Quick Add – transaction will be added to QuickBooks.
- Ignore – transaction will not be added to QuickBooks and will be removed from future download details.
- Choose from other specific actions depending on the type of transaction selected.
Renaming RulesRenaming rules help Bank Feeds predict what payee name and account you want assigned to each transaction. Managing your renaming rules is easy with these steps, and as you continue to use Bank Feeds, less and less effort will be required on your part:
1. After selecting Add/Approve the Rule Creation window displays. From this window you can choose to change the conditions Bank Feeds set automatically. Click OK when completed.
Other Connected Financial ServicesSome financial institutions do not offer online vendor bill payment from within QuickBooks. If this is a feature that would save you time, then you might be interested in the Intuit QuickBooks Bill Pay service.
With Intuit QuickBooks Bill Pay Service you can:
- Make payments to any company or individual (in the United States only)
- Pay multiple bills with a single payment
- Enter once in QuickBooks and then send to your online banking institution to complete
- Schedule payments in advance