Are you a small businessperson? Do you run your business as a job, or are you planning on selling it, leaving it to an heir, or having it continue long after you’re gone? Then you’d better get planning.
It’s not just the big guys who have to plan for succession in their businesses. Many small businesspeople don’t think about who will take over until it’s too late to groom someone, or build a mechanism for paying off the heirs of the owner, and there are a myriad of other issues you need to think about.
We can help. Our succession planning expert is Sonia Stodden, CPA. Give her a call at 661-286-8860 and get started planning your “graceful exit” today!
DOCUMENT RETENTION GUIDELINES
Record retention is a must, whether for personal, business, or tax reasons. However, record retention is necessary only to the extent it serves a useful purpose or satisfies legal requirements. Here are some generally accepted guidelines for the retention of your personal records.
Keep permanently and update as needed:
Adoption records
Advance directive
Birth, marriage or death certificates
Correspondence relating to legal or other important matters
Debt repayment or bankruptcy documents
Diplomas, transcripts
Divorce decree and/or custody agreement
Employment records
Inventory of personal valuables and appraisals
Investment records (IRA, Keogh, pension papers, insurance policies, etc.)
Medical history
Military (discharge papers [DD-214] and any disability documentation)
Naturalization or citizenship papers
Personal financial statements
Social Security cards
Keep at least 3 months:
Utility bills – 1 year if using for tax deductions
Keep at least 1 year:
Bills & credit card statements
Payroll stubs
Keep at least 3 years:
Cancelled checks
Keep at least 5 years:
Bank statements
Home insurance
Medical insurance (premium statements, doctor bills, prescriptions, hospital bills, etc.) – from date of service
Keep at least 6-10 years:
Income tax returns & any tax related records including back-up documents
Keep until expired or for duration of item:
Auto insurance
Contracts - expiration date + 6 years
Home improvement and repair records - ownership + 7 years
Life insurance - life of policy + 3 years
Mortgage documents and statements - ownership + 7 years
Motor vehicle titles, purchase receipts, licenses
Powers of attorney – general or durable for health care
Real estate deeds, title papers, abstracts, lien documents
Warranty documents
Wills, trust agreements
Check this recent story out — it explains one of the most common tricks that buyers and sellers fall into when it comes to mortgage malfeasance.
Just an FYI for those who use ADP payroll services:
Beginning yesterday, certain ADP clients and other parties started receiving fraudulent e-mails that appear to be sent from ADP. They were not.
If you receive these e-mails DO NOT OPEN, FORWARD, LAUNCH OR RESPOND TO THEM. IMMEDIATELY DELETE THEM. The e-mails and their attachments are malicious and could harm your computer. We believe they are attempting to compromise your data.
WHAT YOU NEED TO KNOW:
Here is what you should be on the lookout for:
- The “from:” address in these e-mails may have been spoofed to look like it is coming from ADP such as “emplservices292823@adp.com ” or “adpcomplaintcenter@adp.com”.
- The subject line may read: “Agreement Update for [Your Company Name (Case id: ______)]” or “Complaint Update for [Company Name (Case id. #)]”.
- The e-mail may have an attachment named either Agreement.rtf or Agree.rtf or may instruct you to “download a copy of your complaint.”
- These attacks are sophisticated and you may receive other fraudulent e-mails. Please be careful not to open any suspicious attachments or to download any files.
ADP will continually update the information on its website to help you identify and avoid problems from these suspicious e-mails. You will be able to visit http://www.adp.com/about_fraudulentemail.asp for the latest information.
WHAT YOU NEED TO DO:
If you received one of these suspicious e-mails do not open the attachment and do not provide any information of any kind. Delete the e-mail and any attachment immediately.
WHAT IS ADP DOING ABOUT THIS:
ADP’s security team is working with law enforcement as well as outside experts to identify those responsible for this attack. If we identify any further steps needed to protect your computer, ADP will immediately post this information on our website.
We appreciate your understanding as we work with law enforcement and you to resolve this matter.
From WebCPA.com:
IRS Warns of E-mail Survey Scam
Washington, D.C. (Aug. 30, 2007) The Internal Revenue Service issued a warning about a new e-mail scam that has been hitting people’s inboxes, offering unwary recipients $80 to participate in an online customer satisfaction survey that falsely purports to come from the IRS.
The e-mail contains From and Subject lines that appear to originate from the IRS, as well as a copyright statement that also claims to be from the agency. The message includes a hyperlink that takes the unsuspecting recipient to an online survey that asks for the taxpayer’s name, phone number and credit card account.
The IRS warns that the scammers may try to use the information to run up charges on the victim’s credit card account. There is even the possibility that the scammers might call the victim and try to obtain further financial information so they can get access to a bank account.
The IRS said, however, that it never sends unsolicited e-mail messages, and it never requests taxpayers to divulge their PIN codes, credit card numbers or similar information.
Before you attend an expensive “real estate seminar”, you’d do well to read this article. I know it’s dated, but it still applies.
Especially now, with real estate appreciation waning, it’s really important that everyone understand that “get rich quick” schemes are usually just that — schemes.
After all, if you yourself knew how to “get rich quick”, why would you need to put on seminars to teach other people how to do it? You wouldn’t. You’d just do it, and retire.
- Jan. 15, 2007 - Payment of fourth installation of 2006 estimated tax by individuals.
- Jan. 31, 2007 - IRS deadline for mailing 1099 and W2 forms. If you didn’t pay your final estimated installment by January 16th, file your return by this date to avoid penalties for late payment of your final installment. 4th quarter and annual payroll tax returns
- February 15, 2007 - File a new Form W-4 if you can claim exemption from withholding.
- February 29, 2007 - Government filing copies of 1096/1099s and W3/W2s due ($50 penalty per person if not filed timely)
- March 1, 2007 - Farmers and fishermen need to file their 2006 income tax return (Form 1040) to avoid an underpayment penalty for the last quarter of 2006 if they were supposed to make an estimated payment by January 16th but didn’t.
- March 2, 2007 - FAFSA filed in CA in order to be considered for initial awards
- March 15, 2007 - IRS deadline for CMO and REMIC issuers to report to holders. IRS tax filing deadline for corporations filing on a calendar year basis — or apply for 6 month extension
- April 1, 2007 - California Business Property Tax 571-L due. 10% penalty assessed if received after May 7
- April 10, 2007 - CA property owners; second installment of secured property taxes become delinquent after 4/10, 5:00 p.m.
- April 15, 2007 - $800 minimum tax payment due for California corps and LLCs.
- April 16, 2007 - IRS tax filing deadline for individuals, partnerships, LLCs and estates filing on a calendar year basis. Last date to contribute to a traditional IRA or Roth IRA. Payment of first installment of 2007 estimated tax by individuals. Deadline for automatic six month extensions (file Form 4868, pay tax you think will be due). If you made taxable gifts, file gift tax return (Form 709 or 709-A) and pay taxes due.
- April 17, 2007 - IRS tax filing deadline for individuals residing in Maine, Maryland, Massachusetts, New Hampshire, New York, Vermont and the District of Columbia.
- May 15, 2007 - Exempt organisations due (or extend 3 months)
- May 31, 2007 - IRS deadline for mailing 5498 forms.
- June 15, 2007 - Payment of second installment of 2007 estimated tax by individuals.
- June 30, 2007 - 2007-2008 FAFSA (initial or renewal due)
- July 2, 2007 - File Form TD F 90-22.1 for financial accounts in a foreigh country (if applicable). 2006-2007 FAFSA (initial or renewal due)
- August 2, 2007 - Pension & profit sharing plan returns due
- August 15, 2007 - Exempt orgs apply for additional three month extension
- September 2, 2007 - FAFSA filed in CA in order to be considered for community college awards
- Sept. 17, 2007 - Payment of third installment of 2007 estimated tax by individuals. Final due date for extended corporate returns
- Oct. 15, 2007 - Final deadline for individuals who obtained an automatic six-month filing extension for 2006. SEP/Keogh contributions due if you filed an extension for 2006.
- November 15, 2007 - Final deadline for extended exempt organisations
- December 31, 2007 - Last day to establish a Keogh plan for 2007.
The IRS recently began a program of assigning tax debts to collection agencies for collection — but this also has opened up the opportunity for scam artists to “collect” from taxpayers as well — don’t be fooled.
According to IRS:
WASHINGTON — As the Internal Revenue Service begins its private debt collection initiative, the tax agency reminds taxpayers there are several simple steps that can provide protection against scam artists.
Scamsters try a variety of tricks to impersonate the IRS in hopes of tricking taxpayers into divulging personal or financial information or even conning people out of cash. Scam artists try to impersonate the IRS in person, by phone, by e-mail and over the Internet.
Currently, the IRS is beginning its private debt collection effort, where a small segment of taxpayers who owe back taxes will be contacted by private sector debt collectors. There are several key elements of this program that will alert taxpayers they are part of this program and help other taxpayers from being scammed by impersonators:
- Taxpayer notification. All taxpayers who will be part of the private debt collection effort will know they are in the program before they are contacted by a private collection agency. If you haven’t previously heard that you’re in the program, be wary of any bill collectors saying they are working on behalf of the IRS.
- IRS letter. All participants selected for the program will get a letter from the IRS, telling them they’ve been selected for the private debt collection program. The name of the company will be included in the letter.
- Collection agency letter. All participants will subsequently receive a second letter, this one from the collection agency, informing the taxpayer they will be contacted soon regarding back taxes.
- Money collected. All checks will still be made payable to the U.S. Treasury — not to an individual or firm. The collection agency will provide the appropriate IRS mailing address for payments. The collection agencies will never ask for cash or checks written to individuals.
- Contact the IRS. If in doubt, check IRS.gov or call the IRS at 800-829-1040 for more information.
“Don’t be fooled by scam artists claiming to be from the IRS,” said Kevin M. Brown, IRS Commissioner of the Small Business / Self-Employed Division. “People selected for the private collection program will be notified in advance from the IRS. There are clear processes in place for this program, so don’t fall victim to fraudsters who are constantly looking for new ways to trick people.”
The IRS sees a variety of different scams on different issues. One recent example involves a bogus e-mail claiming to be from the IRS. In this “phishing” scheme, the scam artist’s e-mail claims to be from the IRS, tells recipients that they are due a federal tax refund, and directs them to a Web site that appears to be a genuine IRS site. The bogus sites contain forms or interactive Web pages similar to IRS forms or Web pages but which have been modified to request detailed personal and financial information from the e-mail recipients.
In general, all taxpayers should keep in mind the IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts. If in doubt about someone claiming to be from the IRS or working on behalf of the IRS, call the agency’s toll-free help line at 800-829-1040.
