Posts by Richard Howard55

Synesis support suggested using the "miscellaneous" category for fiscalization, which seems fine since that’s how you handle mixed payment types. As far as the fiscal side goes, everything looks solid.

The remaining issues are sales tax (since you mentioned it) and the KPI.
In the IRS system, the entire receipt and the settlement of payments need to match exactly what was actually paid—the cash portion hits the sales tax return immediately, while the bank transfer portion gets recorded once the funds actually clear.
And based on the payment dates, it'll be reported in the KPI too: the cash part shows up on the day the cash is received, and the bank transfer part shows up on the day it hits the account.

Mark Torres45 said:I had to go back and fix my accounts payable and switch everything over to cash basis, plus handle the sales tax adjustments. See, I hadn't included the stuff from December that hadn't actually been collected yet—that didn't hit the bank until January 2016. Because of that, there was this tiny discrepancy in my income, so naturally, I had to go in and amend my tax return too. Yay me! But hey, you live and learn, right? Now I’m just recording everything on a cash basis, calculating the sales tax, and everyone is happy and satisfied.

And this shouldn't have been done at all.
You can't use tax compliance law to verify receipts. That's apples and oranges.
Under tax compliance law, transaction accounts can be logged, but we have our own hurdles. Plus, the "miscellaneous" category is just a black hole for tracking.

This wasn't really a "learn from your mistakes" lesson in terms of gaining new knowledge. It's more of a lesson—maybe think twice about that "everyone's happy and satisfied" part—to ensure that next time, nobody can pressure you into doing what you just did just to keep the peace because you doubted your own expertise.

Mark Torres45 said:I really need some help here! I’ve been recording all our credit card sales as direct deposits into our business checking account since that's where the cash actually lands. But when it came time for our tax filings, the IRS agents called me out. They're insisting that every single cent we ring up through the POS system needs to be booked as cash receipts. Honestly, it makes zero sense to me—why would I call it cash when the money hits our bank account directly? Who's actually in the right here, the tax authorities or me?

It doesn't make sense. The IRS agents were wrong. Card payments are treated as cash under the tax compliance law, but they aren't under the income tax law.
Since KPIs are managed according to income tax regulations rather than tax compliance law, they messed up—you shouldn't have even bothered amending the tax return.
With credit cards, you're supposed to record them as receipts on the day the processor clears the funds into the account.
Check out the income tax regulations; here is the relevant part:

Article 8, Paragraph 9 of the income tax regulations:

(9) Sold goods or services are considered paid when a check is received. If payment is via promissory note, the receipt occurs upon the collection or transfer of said note. If payment is made via credit card, the receipt occurs when the funds are deposited into the checking account. If payment is handled through offsetting, assignment, or cession, the moment of payment is when the required conditions are met (i.e., signed contracts or other documentation).

wiredmarlin41 said:Go into your Internet options
Then hit Programs
Under Internet programs, click "Set programs..." and you should see Internet Explorer listed there.
When you go to choose defaults for these programs, make sure you check all the boxes.
Once that's done... select "Set this program as default."
👍

@Richard Howard55 🙂

Thanks! 👍

Thank God Chrome saved the day.
I tried to get Explorer working too, but I can't even make a shortcut from the IRS site without it immediately jumping straight to Microsoft Edge.
I’m no expert, and honestly, it’s Friday! 😁
Hang in there! 🙂

A lot of us rushed into installing Windows 10 today because we didn't get enough warning.
Now I can't even access the IRS website, and frankly, I don't even want to look at 🙂
to see what else might be broken.
Did anyone else here run into this mess today?

Olivia Cruz86 said:Hey everyone, I need some quick help regarding fixed asset accounting.
How do I log this in Silicon Valley so it actually pulls through to the sales tax return under Long-term Asset Purchases?

Thanks a million!

If you're talking about the data under Section VIII—Other Data—you just have to enter that manually.

Henry Edwards33 said:Just those ones. $1.00 Just set your payment date to May 1st, even if you already settled up sometime in April. That way, your credit carries over perfectly and your balance hits zero. It’s basically like applying a store credit to clear out your tab entirely.

If there’s an overpayment on an invoice, I’d just close the Accounts Payable entry for the full amount, then run the difference through $1.00 as an expense. I'd label the expense specifically for these types of adjustments—mostly just to keep my bank statements clean and easy to audit.

When the next payment gets reduced by that credit, I handle it in two lines: the adjusted invoice amount and what was actually paid (first line), plus $1.00 (second line), while simultaneously running a reversal through expenses.

The result? No messy leftover balances sitting around, the cash flow stays accurate, and by using that specific expense category, I can see the "paper trail." It lets me track what’s still pending and keep tabs on similar credits from other vendors.

Steven Anderson14 said:They’re hitting me with interest charges dating all the way back to January 2016 for the tourism tax. I submitted my paperwork to City Hall and paid off the difference on April 30th without any issues. So why on earth am I being charged interest starting from January
when we didn't even know what the new monthly rate was going to be back then? Is this just some massive clerical error on their end, or is everyone else dealing with this too?

I noticed the same thing happening, though I haven't gone down the rabbit hole to figure out why. I guess I'm wondering if there was an actual change in the regulations or if the IRS just lost their minds.🙂

gentlepuma02 said:Does anyone actually understand the specific purpose behind this? We hire seasonal staff every single year, and I have always registered them under fixed-term contracts. If this change offers actual benefits, I would naturally prefer to transition them to seasonal status, but I need to know if that specific designation must be explicitly stated within the employment contract itself.

Full-time seasonal workers under standard regulations are enrolled in extended Social Security. That's the benefit. I don't know the specifics, though. You'll have to figure that out yourself.

I’ve been trying to sign my GFI-POD on the IRS website, but I keep hitting a wall after it accepts the document (it lets me view it, at least).
It just keeps telling me I need to refresh the page... over and over again. An endless loop.
Any ideas on how to fix this?

Edit:
If only I’d actually bothered to read the previous page (shoutout to the team!).
Turns out, I uninstalled the new Java version, rolled back to the old one, and... boom. Everything works perfectly.
I wasted so much time... just a complete waste.😢

blueskipper132 said:IRS Form 1040 instructions, page 3, section 4.2.4 regarding income tax prepayments for the next period—what actually goes in that box? And how does it even relate to the prepayment section on page 9, point 9.7.2?

They’re essentially the same numbers. Or rather, it's just the same amount being entered into two different fields.
It’s probably clearest if you look at field 9.7.1., since that shows the weight (how much 4.2.1. contributes to the total income across all sources). So, I guess if you take 9.6.10.—the annual tax and surcharge obligation—multiply it by that percentage, and then divide by the number of months the business was active, you get the exact amount you're looking for.

Richard Howard55 said:A reliable source is irrelevant if you already know contributions are only calculated once a year on your tax return.
The IRS will just "study" everything later and leave you indebted.

I was thinking about that non-profit organization form while typing this. It doesn't even have the right fields for receipts. I guess it just wasn't designed for that.
They could probably just "fudge" the beneficiary tag—maybe something like 0046—but there’s a catch. The receipt code (5801-5807) has to actually line up with those base coefficients from 1 to 6. It's a bit of a headache, I guess.
That annual base used for calculating contributions? It just doesn't cut it. I guess it's insufficient. Maybe.

Jessica Gonzalez30 said:A Colleague mentioned they actually called the Federal Reserve, and honestly, the folks on the other end were acting totally baffled, asking where they'd even gotten the idea to send funds to a non-profit organization.

To be honest, I'm really not sure what else to tell you. 👎

They should have just explained the reasoning instead of acting all shocked and confused. I guess. 😢

placidlynx92 said:Does anyone know if the Pension Fund applies to sole proprietors who are also currently employed?
My tax consultant is still drawing a blank, so I'm looking for some clarity. On some online forums, people are claiming it isn't necessary—but then I turn to page 44 of the Social Security Administration brochure, and it says it absolutely is required. It’s one of those classic "expert" contradictions that leaves you stuck in limbo.
Can anyone point me toward a reliable, actual source here? 🕺

A reliable source is irrelevant if you already know contributions are only calculated once a year on your tax return.
The IRS will just "study" everything later and leave you indebted.

Timothy Morgan38 said:person, that "informative message" being sent out was actually my doing... because before I stepped in, the system was throwing a restrictive error for these cases and wouldn't let anyone submit the form at all... so I wrote a formal letter to the folks over at the IRS, explained the whole mess, and they finally switched it from a hard block to an informative notice so we could actually file it... so yeah, I'm basically a hero... 😵

Basically, when an asset is fully depreciated, you can successfully submit the form even if it just throws that informative warning...

But if the asset was stolen during the year, you just enter "0" for the remaining life. In that case, it won't trigger any error message at all—it'll just accept whatever you type in... tried and tested!

I don't really follow the part about the disposed asset.
Are you saying we enter the depreciation calculated up to the point of disposal plus the remaining book value in column 8, while setting the book value to zero? And then, presumably, zero for useful life equals a valid form? 🤔

Charles Turner13 said:I record the full card transaction amount directly to the checking account upon payment, rather than splitting it between cash and bank deposits. At the same time, I book the merchant processing fee—the difference between the gross sale and the actual settlement—to the checking account as an expense.
We receive our merchant statements right on schedule, alongside our regular bank statements.

That’s how I used to handle it. But back then, if I were filing with the IRS, I’d probably include some kind of bank reconciliation to prove everything was above board, since I’d be listing the processor's commission as a negative line item in my explanation.
However, now that the PPI is the "official" standard designed to match up against the annual revenue flows the Police Department will pull from bank records, you'll likely need to reverse the entire processor fee against your bank receipts at year-end and move it over to your non-cash income.

shadowdrifter99 said:The point being made there is about the timing of the payment, not whether it's treated as cash or a bank deposit. It makes zero sense to claim a check counts as cash when the bank doesn't even drop the money into your account until the check actually clears.

Right, we are discussing the timing of payment.
But look, the point is you aren't actually chasing down the customer who swiped their card; you're dealing with the processor. In other words, a receivable is created that eventually gets settled via bank transfer upon maturity.
Don't let checks throw you off (even if you technically collect them from the buyer). It doesn't matter what our personal opinions are regarding cash versus non-cash; what matters is what the official regulations dictate counts as cash.
Once you factor in what needs to be recorded in the sales ledger, you end up right back at the definition of cash and what specifically needs to be logged under cash receipts in the KPI.

We’re discussing accounting for sole proprietorships here. To be clear, the most critical rules are found in the income tax regulation, not the tax compliance law. You keep citing articles from the tax compliance law, but those handle cash differently than the actual income tax regulations do—it's irrelevant since we're looking at how items are reported in the accounts receivable ledger and on Form P-PPI.

Here is a snippet from Article 8 of the income tax regulation regarding when revenue is actually recognized:

(9) The sale of goods or services is considered paid once a check is received. If payment is made via promissory note, the receipt occurs upon the collection or transfer of said note. If a credit card is used, the receipt is recognized when the funds hit the business checking account. In cases involving set-offs, assignments, or cesions, the moment of payment is defined by the fulfillment of specific conditions (such as the signing of the necessary contracts or legal documents).

Charles Turner13 said:I don't think it's quite that straightforward.
What’s the deal with credit cards? Everything gets logged through the POS system, yet the funds aren't even being collected in cash—they're hitting a bank account via wire transfer, often after being shaved down by processing fees.
In my case, I receive a significant amount of foreign currency payments, which then requires me to convert them back to USD once the customer pays. For all of that, I still find myself having to submit formal written explanations regardless of this "famous" P-PPI system.

Yeah, they completely ignored foreign exchange transactions. You'll probably have to explain them separately if the IRS starts asking questions.
I guess you already have a "system" for tracking those foreign deposits and exchange rate fluctuations, so you'll likely need to attach that entire paper trail to your filing anyway... unless you want them calling you immediately.

shadowdrifter99 said:This might clear things up for you:
Under Section 2, Subsection 5 of the tax reform law, "cash transactions" are defined as payments for goods or services made via banknotes, coins, cards, checks, or any similar method, unless the law specifically dictates otherwise regarding direct bank transfers.

Because of that, using a Visa, Mastercard, or American Express card—or any other credit or debit card—counts as a cash transaction, which means you still have to go through the whole receipt logging process. Basically, paying via a direct wire transfer from one bank account to another or using a standard check doesn't count as "cash" under this rule, so those types of payments don't require the same fiscal reporting.

Ryan Rogers4 said:Well, my take on things is a bit different 🐔

Charles Turner13 said:I completely agree.
Back when I was still in college, they taught us that cash meant nothing but physical bills and checks—that was the only thing that truly counted toward revenue.
Sure, card transactions go through the tax reporting system, but they aren't technically cash payments, so for the last 15 years, I've been recording them as bank transfers in my KPI.
The tax reform law shouldn't be able to override the existing payment services law.

Keith Martinez5 said:Honestly, if this weren't such a headache, it would almost be funny... I spent all of yesterday fixing my entire 2015 ledger because I had been closing out every single card transaction as a bank deposit—which, to me, is the most logical way to do it since that's where the money actually lands, rather than being physically in my Hand (which is the only true "cash" in my book). But apparently, under current tax rules, anything that isn't a wire transfer is treated as cash. I suspect that back when you were sitting in those lecture halls, this specific type of digital fiscalization didn't even exist yet... so they probably just didn't mention it! :P
Now I’m sitting here scrolling through all these threads, holding this frustrating little handheld terminal, trying to make sense of how everyone else is coding their entries... and I'm still lost. I work over at Silicon Valley, and some of these entries are automated by the software itself, so I can't even go in and manually tweak them... I'm still stuck looking like this🐔

Folks, you're getting your wires crossed here. We aren't looking at the fiscalization law—that covers what needs to go to the IRS and what doesn't. No, we're talking about the federal tax law and its specific regulations. It defines cash in a very specific way, just like @ajnat mentioned: strictly cash and checks.
Card payments hitting a business bank account are simply bank deposits. As for the merchant fees being "shaved off," those are considered in-kind receipts (to close out the receivable at 100%), and the fee itself is an in-kind expense.
Whether you book that in-kind transaction for every single card swipe or just once during a set period is entirely up to the accountant's discretion.
Back when I handled them, I used to book them after every single payment. But if I were doing it today... I guess I might not be quite so "aggressive" about it. I'd probably have to weigh my options... then decide.🤔