Nine Tips on the 10 Percent Tax on Tanning Services

Starting July 1, 2010, many businesses offering tanning services must collect a 10 percent excise tax on the tanning services they provide. This excise tax requirement is part of the Affordable Care Act that was enacted in March 2010.

Here are nine tips on the tanning excise tax that providers must collect.

1. Businesses providing ultraviolet tanning services must collect the 10 percent excise tax at the time the customer pays for the tanning services.

2. If the customer fails to pay the excise tax, the tanning service provider is liable for the tax.

3. The tax does not apply to phototherapy services performed by a licensed medical professional on his or her premises.

4. The tax does not apply to spray-on tanning services.

5. If a payment covers charges for tanning services along with other goods and services, the other goods and services may be excluded from the tax if they are separately stated and the charges do not exceed the fair market value for those other goods and services.

6. If the customer purchases bundled services and the charges are not separately stated, the tax applies to the portion of the payment that can be reasonably attributed to the indoor tanning services.

7. The tax does not have to be paid on membership fees for certain qualified physical fitness facilities that offer indoor tanning services as an incidental service to members without a separately identifiable fee.

8. Tanning service providers must report and pay the excise tax on a quarterly basis.

9. To pay the tax, businesses must file IRS Form 720, Quarterly Federal Excise Tax Return using an Employer Identification Number assigned by the IRS. Businesses that don’t already have one can apply for an EIN online at IRS.gov.

Find more information about the excise tax on tanning services, IRS Form 720 and other tax provisions of the Affordable Care Act at IRS.gov.

Affordable Care Act Provides Expanded Benefits to Health Professionals in Underserved Areas

The Internal Revenue Service announced that health care professionals who received student loan relief under state programs that reward those who work in underserved communities may qualify for refunds on their 2009 federal income tax returns as well as an annual tax cut going forward under a new provision in the Affordable Care Act. Employers, including tax-exempt employers, in underserved areas can help eligible health professionals take advantage of this new benefit.

Employers of eligible medical professionals who withheld and paid taxes under the Federal Insurance Contributions Act (FICA) on payments covered under the new exclusion may seek a refund of withheld FICA on the employee’s behalf. Also, because employers also pay a portion of the FICA tax, the employer also may be entitled to a refund as well.

For more information on the Affordable Care Act provisions as well as news releases and other legal guidance, go to IRS.gov.

Applications for Therapeutic Discovery Project Tax Credit Now Being Accepted

The Internal Revenue Service recently announced that small firms, including qualifying tax-exempt entities, may now begin applying for certification for tax credits available under the Qualifying Therapeutic Discovery Project Program, created by the Affordable Care Act (ACA). Applications must be postmarked no later than July 21, 2010.

The Department of Health and Human Services (HHS) will evaluate each project for its potential to produce new therapies, reduce long-term health care costs or cure cancer within 30 years. Only projects that show a reasonable potential to meet these goals will be certified as eligible. While some applicants may elect to receive a grant in lieu of a credit, 501(c) organizations are not eligible for grants under the ACA provisions. For more information and guidance see IRS.gov.

FAQs on Excise Tax on Indoor Tanning Services

Beginning July 1, 2010 indoor tanning services will be subject to a new 10 percent excise tax. Exempt organizations that provide tanning services are encouraged to review the new FAQs on the administration of the new tax on IRS.gov.

StayExempt.irs.gov

Want to brush up on your knowledge of exempt organization compliance requirements and ensure that your organization maintains its tax-exempt status? The IRS provides on-line training for tax-exempt organizations at www.StayExempt.irs.gov. The site includes a virtual workshop - web-based version of the popular Exempt Organization workshops - and a number of mini-courses on topics of interest to tax-exempt organizations.

Affordable Care Act Provides Expanded Tax Benefit to Health Professionals Working in Underserved Areas

WASHINGTON — As part of a larger Administration announcement on efforts to strengthen the health care workforce, the Internal Revenue Service today announced that under the Affordable Care Act health care professionals who received student loan relief under state programs that reward those who work in underserved communities may qualify for refunds on their 2009 federal income tax returns as well as an annual tax cut going forward.

“Doctors and nurses who choose to practice in underserved areas make a great contribution to their local communities,” Commissioner Doug Shulman said. “By expanding the tax exclusion for student loan forgiveness, the Affordable Care Act provides an even greater incentive to practice medicine in areas that need it most.”

The Affordable Care Act included a change in the law, effective in 2009, that expands a tax exclusion for amounts received by health professionals under loan repayment and forgiveness programs. Prior to the new law, only amounts received under the National Health Service Corps Loan Repayment Program or certain state loan repayment programs eligible for funding under the Public Health Service Act qualified for a tax exclusion.

The Affordable Care Act expands this tax exclusion to include any state loan repayment or loan forgiveness programs intended to increase the availability of health care services in underserved areas or health professional shortage areas and makes this exclusion retroactive to the 2009 tax year.

Health care professionals participating in these programs who have reported income from repaid or forgiven loan amounts on their 2009 returns, possibly after receiving a Form W-2, Wage and Tax Statement, or Form 1099, may be due refunds. Those who believe they qualify for this relief may want to consult their state loan program offices to determine whether the program is covered by the new law.

Health care professionals who have not yet filed for 2009 need not report eligible loan repayment or forgiveness amounts when they file. Those who have already filed may exclude eligible amounts by filing Form 1040X, Amended U.S. Individual Income Tax Return. This form can be downloaded from this website or obtained by calling the IRS toll-free at 1-800-TAX-FORM (1-800-829-3676). Individuals filing Form 1040X to claim this exclusion should write “Excluded student loan amount under 2010 Health Care Act” in the Explanation of Changes box.

Health care professionals may request an employer or other issuer to provide a Form W-2c, Corrected Wage and Tax Statement, or 1099 and may attach the corrected form to the Form 1040X. However, the Form 1040X may also be filed without attaching a corrected form.

An individual whose employer withheld and paid taxes under the Federal Insurance Contributions Act (FICA) on payments covered under the new exclusion may request that the employer seek a refund of withheld FICA on the employee’s behalf. And because employers also pay a portion of the FICA tax, the employer also may also be entitled to a refund.

To obtain a refund, an employer should file a separate Form 941-X, Adjusted Employer's QUARTERLY Federal Tax Return or Claim for Refund, for each Form 941, Employer’s Quarterly Federal Tax Return, which needs to be corrected. An employer filing a Form 941-X is also required to file a Form W-2c for each employee who benefits from the exclusion.

What is Paperless Overnight and Why should I use it?

Paperless Overnight is the most efficient method available for gathering source documents in a virtual office. After many years of researching everything available and not finding what we needed, KC Truby finally designed his own system that would accomplish every goal we have for an efficient process. Paperless Overnight is not only a document management system; it is complete work flow software.

Bottom Up Delegation Concept

The Paperless Overnight System is designed around the "bottom up" work flow delegation concept. Work comes in at the lowest denominator, is named and assigned to a staff member, then works its way up the chain if the employee does not know how to complete the work. Once the task is elevated, the upper level staff member completes the task, BUT, as he/she is doing so, records everything taking place on the desktop, while talking through an explanation of how and why the task is completed in this manner. The recording is saved, attached to that type of task, and next time the question arises, the employee with the question will simply pull up the help file and get their questions answered.

Bottom up delegation will free up considerable time for every person in the firm and allow them to focus on higher value work. This will result in a more rewarding and profitable work experience for all, whether it is your outsourced bookkeeping staff, marketing department, sales, etc.

Why should I embrace this idea?

There is no software or hardware to buy, no servers to lease or maintain, no consultants to hire, no training to pay for and no more lost papers. Most systems of this type cost upwards of $10,000 dollars just to get started. You can now go completely paperless for only .15 per page, that’s it, and have a work flow system that is far more efficient and less costly than anything on the market. (For the average business client, the service costs around $20.00 to $30.00 per month, PERIOD.) Once you have seen a demo, you will undoubtedly be interested in embracing the concept of running a far more efficient business, with the flexibility of working from anywhere on the planet with an Internet connection.

How does it work?

As each document is faxed or emailed to the site, as we will detail for you, it is opened individually by an employee of Paperless Overnight, named, dated, and assigned to the staff member in your firm that handles that client, that type of task, etc. (YOU establish how work is delegated) The document is the task and all notes, who worked on it, any questions asked, etc. follow the document forever. A date stamp is recorded each time the document is opened and by which employee.

Communication is another key feature built into Paperless Overnight. For example, if we have a question for you about a document you have sent, we simply open the document, type the question in the comments box attached to it, and select your name from the drop down box. It is automatically assigned to you and you receive an email that we have a question for you. The email contains a link to the document, which is accompanied with a dialogue box containing the question. You handle questions to us in the same way, and we are not stuck playing phone tag. You can use this system for every department in your business, not just the bookkeeping department.

Whether your firm uses home/virtual workers or not, you can see exactly what is assigned to each staff member at all times, where they are in the process of completing that task, etc. Several of our clients have reported staff members walking out in the middle of tax season, before corporate deadlines, etc. and their fellow staff members did not miss a beat, trying to figure out what that person left "hanging".

The system is based on the same type of search engine as Google, so any document can be retrieved in seconds, much faster than walking to a file cabinet. Also, it is a simple and inexpensive way to GO GREEN!

What kind of learning curve will I have?

The best part of what KC has designed is the training on how to use the system. We have posted short video clips on each aspect of using Paperless Overnight, so you do not have to spend time training new fellow employees or clients on how to use it. KC verbally explains the “how to and why’s” of the process, as you are watching the video of how to complete each task. SO, no matter what your learning style, all the bases are covered.

2 easy ways to learn more about how you can stop bookkeeping

1. Call our office (773-792-1910) and ask for the FREE VIDEO on CD titled ‘How Outsourcing Works’
2. Call our office (at 773-792-1910) and we’ll be happy to show you how it works.

How does outsourced bookkeeping work?

Simply throw your daily invoices, deposit slips and bills on the fax machine,(or scan to email if you prefer). Once or twice a day hit the speed dial and your source documents are sent secure servers, far more secure than any set up you could have in your own office. We then link to your files on the secure server and enter your transactions, reconcile your accounts and set your bills up for payment, etc. You can watch the progress of your bookkeeping right from your computer in real time. It takes us about 3 to 5 days to get a handle on your business, but the entire process ramps up very quickly. You can actually be out of handling your own bookkeeping by this time tomorrow.

Our affiliate accountants, who have been extensively trained in our processes, take responsibility for getting your bookkeeping done faster, better and cheaper than you have ever experienced. They will help you build a great business by delivering on two promises:

* The promise to take away your bookkeeping headaches forever
* The promise to provide complete and up to date books each morning when you come into work, with a ‘score card’ report of sales, profits and cash on hand

Best of all, this can be done for about half of what a bookkeeper costs as an employee.

By providing accurate ‘real time’ and ‘on line’ bookkeeping, we will help you focus on what works in your company. In every small business 20% of what you do generates 80% of the net profit. We all know the 80/20 Pareto principle – but almost none of us have actually implemented it in our business. We will help you get it done as part of our outsourced bookkeeping service.

The 5 reasons you should stop doing bookkeeping in house:

* Cut cost in half compared to doing it in house
* Eliminate employee drama or management work
* Obtain quality numbers in real time on which to base decisions
* Benefit from an objective "guardian angel" watching over your business
* Spend your time and money on sales – not details

True Cost of an Employee

Are your employees costing you more than you think?

Do you ever feel like you are working for your employees, instead of them working for you?

That’s because in most small businesses, the owner has no idea of the true cost of employees and it is one of the biggest reasons we suffer poor cash flow.

For example...

If you pay your bookkeeper $15 an hour, he/she can be costing your company $75,000 a year. When I bring this up I get a shocked response from business owners, they say “NO WAY, I only pay her 15.00 an hour plus 7% in employee taxes - no way bookkeeping costs me $75,000 a year."

We underestimate our true cost or burden rate and the locked in expense kills our cash flow if our business ever takes a down turn. Costs like medical insurance, phones, rent, computers, software, training, hiring, sick days and the 100 other little costs that add up. But those costs are chump change for a small business compared to the real expense.

The big cost is the owners’ time. Your time MUST be spent looking for new and better customers. Any time you are dealing with a bookkeeper, you are losing sales to your competitor. The cost of finding a new employee and getting them trained on how you want things done can take up $5,000 to $15,000 of your time. That number never shows up on your Profit and Loss, it’s hidden. But that is lost time - losing customers that won't buy today, and they won't be buying from you in a year. You have lost opportunities forever when you’re dealing with back office tasks that don't need to be done.

Or what about the time you have to spend every day managing or 'interacting', as they say now a day at MBA school? How much does that wasted time cost?

Here is how to determine the 'burden rate' of an employee. Go to your Profit and Loss statement and look under payroll. Move the owner’s payroll to overhead, because you are management, and that is where it belongs (in overhead). Now divide the total gross payroll into your total overhead and here is what you are going to find. That for every 1.00 you pay your employees, your cost is actually $2.40 to $2.60.

So that $15.00 an hour bookkeeper is actually costing you 36.00 an hour at the low end and and up to 39.00 if your office is a little nicer or your benefits are above average. That’s 39.00 an hour if you have work to do or not. That is $39.00 you are paying out every day and that is plum nuts for a small business owner.

If you want to improve your cash flow, look for jobs that do not affect the customer experience. Bookkeeping is one of the first to go. MasterType Accounting & Business Services, P.C. can take that $75,000 burden rate, and cut it down to $15,000 to $25,000 a year. Plus - give you better numbers every morning and advice on how to run a better business.

Outsource your bookkeeping today, and start rounding up more cash cows.

Knowledge Centered Selling... What It Is and Why It's Important

In this rapidly changing economy, you need the right tools to maintain a competitive edge and dominate your competition. As a long time salesman in one of the toughest industries to crack, (Accounting/outsource bookkeeping) I’ve found “Knowledge Centered Selling” to be a very valuable concept. It applies to all industries and is the process of teaching your customers how and when to buy from you.

Too often we believe that customers are strictly price driven, but have we considered that they may not know what other factors to consider when making buying decisions on the products and services you sell? Do you strictly talk about your physical product/service, or do you create a visual of the IMPACT your product or service will have on their business today, 3 months from today and a year down the road? The truth is if you create an ongoing stream of business productivity knowledge for your customers and prospects, you will significantly increase sales, differentiate yourself from the competition, and create long-term loyal customers.

I have been hired to conduct sales training for a variety of industries, and here I’d like to share an example of what I’m talking about in regards to “Knowledge Centered Selling”. I had been asked to hold sales training sessions for a group of “copier” salesmen. We first tackled the best way to pick up more business from current clients, so I asked the question, “What are you really selling?” “The answer is NOT copies.”

What they are selling is increased productivity gains, leading to a more efficient and profitable business. Our goal was to make sure the client understood this. After a new copier was placed, the dealer sent a follow up letter explaining the finer tips of maintenance. A few weeks later a fax was sent with details on efficient methods of keeping files organized. A month later a CD was mailed on how to run an office by check list, with templates included. We sent information on how to go paperless overnight. Every 20 days some form of Knowledge Centered Selling on running a better business was sent to the customer. Most of the knowledge had very little to do with the copier, BUT, the company increased sales to existing customers by 56% over the next 12 months.

The salesmen realized that if their customers believe they are buying a “box”, they are going to try to buy that “box” as cheap as possible. On the other hand, if their customers perceive they are buying huge productivity gains, while gaining a valued business advisor, the next sale is a slam dunk and the relationship cemented.

Having completed our current client campaign, we moved on to the Knowledge Centered Selling concept for prospective customers. I explained that when a competitor is entrenched in a good account, there are two options available for getting the account to come your way. The most common is to cut prices to a point where profit margins are very slim. This is pretty short sighted for long term business health. Instead, I recommended the second method. Develop a series of informative letters similar to the ones going out to current buyers. I told them to limit the sales points about their equipment to one out of every three or four contacts. By teaching the prospect how to solve the office productivity problems in their company, the copier salesmen set themselves up as the “go to people” to solve office problems. They soon learned that even when a prospect did not buy, they received a much warmer reception and the prospect was a lot more forthcoming during the sales process. At the end of 12 months, the company experienced an increase in client base of 34%, not to mention the increased commissions paid out to the salesmen.

You may be asking, “But KC how can I create a pertinent information flow, when this is not my thing?” Creating the ongoing information flow can be accomplished two ways. First you can start clipping magazine articles, internet postings and excerpts from books that you personally found valuable. Have a staff member use these as guidelines for putting together helpful hints and tips. The second method is to call upon someone who has developed a complete Knowledge Centered Selling program in your industry and license the use of their program in your market. If you wish to create audio CDs (one of my favorite methods for touching customers) you can simply record productive ideas onto CD. Be sure to use a professional recording studio and put the knowledge in story format.

In summary, the more informed my customers are about my products and the impact they can produce in productivity gains, lifestyle, etc., the more likely they are to buy the real features they want and need. The more knowledgeable your prospect or client, the more they will buy from you.

If you’d like to share ideas or send me a question, I’d love to hear from you.

mastertype@mabspc.com

IRS Issues Regulations on 10-Percent Tax on Tanning Services Effective July 1

WASHINGTON — The Internal Revenue Service today issued regulations outlining the administration of a 10-percent excise tax on indoor tanning services that goes into effect on July 1.

The regulations were published today in the Federal Register.

In general, providers of indoor tanning services will collect the tax at the time the purchaser pays for the tanning services. The provider then pays over these amounts to the government, quarterly, along with IRS Form 720, Quarterly Federal Excise Tax Return.

The tax does not apply to phototherapy services performed by a licensed medical professional on his or her premises. The regulations also provide an exception for certain physical fitness facilities that offer tanning as an incidental service to members without a separately identifiable fee.

The IRS and Treasury Department invite comments.

Send submissions to: CC:PA:LPD:PR (REG-112841-10), Room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044.

Submissions may be hand-delivered to: CC:PA:LPD:PR Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-112841-10), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW; Washington, DC,
Submissions may be sent electronically via the Federal eRulemaking Portal at http://www.regulations.gov (REG-112841-10).