Tom Briscoe with a reminder why most people don’t have a clue how large their tax burden is.

Q-1:

Subject: Quicken question

 

Dear Mr. Kerstetter,

 

My husband and I really appreciate your website and the wealth of information you provide.  We are trying to settle into a more organized way of handling our rental properties, personal expenses, and misc assets/liabilities and are wondering if we could pick your brain on the following issue.

 

We are trying to figure out if we can use Quicken in conjunction with another software package called Neat Receipts.

 

We’d like to export data (payee, category, charge/payment) from Neat Receipts in a QIF format and import that data into Quicken.  Specifically, we’d like to import that data into the “Register” area of our Credit Card Account, then, have Quicken download transactions directly from the credit card institution and perform “matching” in order to rid the account of any duplicates.

 

We’ve figured out that we cannot import the QIF directly into the credit card account in Quicken.  We created a regular cash flow account as a “placeholder”  where we can import the QIF and cut/paste the data into the credit card account.  What we’re not sure how to do is “ask” Quicken to perform the matching.

 

Do you have any suggestions on how (or if) this can be done???

 

We would be happy to pay you for your time if that is appropriate.

 

Thank you,

A-1:

As I’ve mentioned a number of times recently, I am no longer using Quicken and have focused all of our clients on QuickBooks; so I can’t help you with your Quicken specific issue.

I checked out the website for that product and saw that the company claims to be able to export scanned data to QuickBooks, as well as Quicken.

I have always been a gadget nut and was intrigued by that product; so I read a lot of the info on the website and even watched the Martha Stewart demo video.  Unfortunately, I’m not seeing how using it will save any data entry time in either QB or Quicken.  Entering checks and credit card charges directly into either program would take much less time to do than the scanning in and/or downloading scenario, especially under your cut & paste strategy.  Both programs are very smart in terms of recalling previous transactions and prompting the correct entries after just typing in a few letters in the payee’s name; so data entry isn’t as time consuming as many people believe.

Good luck.  I’m sorry I couldn’t be more help.

Kerry Kerstetter

Q-2:

I would not be opposed to using Quickbooks, if it will do the task I’m trying to accomplish. 

 

The main reason we would like to use Neat Receipts in combination with Quickbooks/Quicken/Micro Money, is for the receipt image “storage.”  The key receipts we deal with for rental properties, home construction/improvements, and big ticket items (for warranty issues) can be easily searched/found without having to riffle through shoe boxes of paper. 

 

Would Quickbooks have the capability to import data from Neat Receipts into the credit card account register and look for duplicates or “match” what is downloaded from the credit card company? 

 

Thank you for you’re time.

A-2:

I don’t know if QuickBooks can import that data efficiently or not.   You may want to post that question on one of the QB discussion boards to see if anyone will share their real-life experiences with you.

I have links to some good discussion groups on my website.
 
Good luck.

Kerry Kerstetter

 

Q:

My Mother is wondering if she buys things for our farm or pays bills for our farm are there ways she can get tax breaks.  The money that she has from when my grandmother passed away…I don’t know alot about it.  I just know Momma said the only reason she didn’t have to pay taxes this year was because my grandmother had paid ahead.  She is wanting to help us some but she needs the breaks.

 

Also, when we incorporate is there a way she can benefit from that?

A:

These are the kinds of things she really needs to be discussing with her own personal professional tax advisor.

Most kinds of inheritances are tax free for the heirs.  Investment income earned on those assets after she owns them are taxable.

Basically, tax deductions are only allowed if there is a profit motive behind them.  She can’t just pay for your expenses and deduct them unless there is some expectation of income from that operation.  One possible scenario that could allow deductions would be if she were to buy some pieces of farm equipment and lease them to you.  She could potentially deduct up to $108,000 of the cost in the first year; but there would have to be some lease income showing on her 1040 to justify it.  Her tax advisor can give her more specifics.

In regard to working with your corporation, there aren’t as many tax savings for a non-owner as for the owners.  However, if you were to set her up as an employee of your corp, and have a corp medical reimbursement  plan available for all employees, the corp could pay for all of her medical costs and she wouldn’t have to report any of that as income.  Again, her personal tax advisor can give her more specific advice, including whether it would be even better for her to set up her own corporation.

Good luck.  I hope this helps.

Kerry

Follow-Up:

Thanks and I am sorry to keep bugging you with questions.  She doesn’t have a tax advisor and that is the problem!!!  I am encouraging her to do something.

 

Health Insurance Covering S Corporation Shareholders – Interesting clarification from IRS.