QUESTION: Is there a simple method of deducting expenses for a home office? ANSWER: There is a new simplified option for claiming the home office deduction. The IRS has provided the “safe-harbor” method that individuals can use to determine the amount of their deductible home office expenses, effective for tax … More
Accounting For Your Money
Protect Yourself Against Wage Complaints
QUESTION: Can a disgruntled employee challenge his or her wage compensation through legal channels? ANSWER: Yes! I recently completed a Wage and Hour Division (WHD) investigation through the U.S. Department of Labor. In this case, a restaurant employee challenged the overtime calculations of an employer after he was fired for … More
Accounting For Your Money
How to Prepare for a Sales Tax Audit
QUESTION: How can I know if my accountant has prepared me for a possible sales tax audit? ANSWER: In the case of an audit of one of my firm’s clients in California, covering the tax years 2010 to 2012, the following documents had to be submitted: • Sales and use … More
Accounting For Your Money
Setting Your Own Salary
Question: What’s the best way to set my salary from my S corporation restaurant entity? Answer: As the owner of an incorporated business, you’re probably aware that there’s a tax advantage to taking money out of the corporation as compensation (salary and bonus) rather than as dividends. The reason is … More
Accounting For Your Money
Reporting Cash and Credit Card Sales
Question: Does Form 1099-K for credit card payment reporting apply to restaurants? Answer: Yes, and this will be very important to restaurant operators. In legalese, a payment settlement entity (PSE) must file Form 1099-K for payments made in settlement of reportable payment transactions for each calendar year. A reportable payment … More
Accounting For Your Money
Previous Articles from Mike Rasmussen
Previous articles from Michael Rasmussen October 2012 September 2012 August 2012 June/July 2012 Page 22 March 2012 Page 20 Jan/Feb 2012 Page 24 November 2011 Page 24 October 2011 Page 22 September 2011 Page 22 August 2011 Page 22 May 2011 Page 22 April 2011 Page 20 March 2011 Page 22 … More
Accounting For Your Money
Double-check your numbers
Question: How do I ensure that my sales figures, according to my point of sale system, make it to the bank? Answer: You need to practice internal control. First, print a daily sales report from the point of sale and from your credit card machine if you have a standalone terminal. Next, create … More
Accounting For Your Money
Hiding from Uncle Sam
QUESTION: I’m a small independent operator with five employees, so why would the IRS seek me out? ANSWER: After attending a recent IRS Nationwide Tax Forum in Dallas last summer, I returned with plenty of reasons the IRS would seek you out. First, the government needs to balance its budget and has fully staffed … More
Accounting For Your Money
Defusing fees
Question: Can I mandate a fee that’s passed on to my customers to account for excessive credit card fees? Answer: In my research, merchants are restricted in charging any additional fees to customers specifically to recoup merchant processing fees charged by bank processors. Simply put, merchants have to bury the fees charged in the … More
Accounting For Your Money
Bank loan assistance and state payroll taxes
QUESTION: How can I obtain a loan to purchase equipment and for costs to be incurred for leasehold improvements at a new location for my restaurant? ANSWER: We have been flooded with these requests lately. First, understand that most lending institutions or bankers do not understand your operations to the degree that you do. … More
Accounting For Your Money
Second opinions and credit card fees
QUESTION: My current accountant doesn’t provide restaurant advice, and I feel like I’m missing out on something. Without hurting his feelings, how can I get a second opinion? ANSWER: If you are at this stage with your current accountant, who may even be a family member, you owe it to your employees, your staff, … More
Accounting For Your Money
Budget basics
You wouldn’t get on a plane if you weren’t comfortable that the pilot budgeted the correct amount of fuel needed for the trip. You wouldn’t enter into a long-term lease in a strip mall without budgeting your restaurant’s cash flow to ensure you pay the lease, since nonpayment may lead you to bankruptcy. You wouldn’t … More