Posts by Jessica Gonzalez30

Peter Young5 said:Please do let me know.🙂

Why not just manually adjust the sales tax data in the ERP system so everything stays accurate without needing a written explanation? If someone asks about it down the road, it’s easy enough to explain—and honestly, they probably won't even ask... 🙂

But if you go ahead and manually adjust the P-PPI, it isn't going to align with your KPI 😉

Jose Myers said:Aren't those local government grants given to small business owners actually considered taxable income?

I was just handling a tax return for a freelancer who had all their bookkeeping done elsewhere and just handed me the paperwork, but I wasn't about to be lazy and just take their word for it. So, I dug through everything, only to find out that the grant isn't being treated as income. The guy who handled the books is telling me, "No, that doesn't count as revenue." Am I losing my mind here, or am I just exhausted? Hahaha.

Yeah, those municipal grants definitely count as receipts/income.

Richard Howard55 said:I've combined a few posts here to recap my week.

I did an e-change for my Social Security info. I called to ask if Medicare would automatically pick up the update. They seemed pretty horrified 🙂 by my question, since the whole point is that Medicare should be pulling those updates from them automatically.

After reading the debate about this on the forum, I decided to call Medicare just to be safe. They told me that while the automation between the SSA and Medicare *should* work, for some reason it doesn't, so I'd need to bring in the paper forms. So, off I went to the Medicare office. However, when I got there, the clerk looked baffled 🙂 by my arrival, because apparently, you aren't even supposed to hand in paper forms anymore since the changes are pulled directly from the SSA system.
I just submitted everything without making a scene, mostly because I had already "prepared" myself for any possible outcome. 🙂
Voila! 🤣

Around here, nothing is ever truly automated; you basically have to hand-carry every single update from one agency to the next.
It makes you wonder—do we really have two separate governments operating in parallel, or am I just dealing with someone at the service window who doesn't quite know their job and is giving me bad info? If I were in her shoes, I’d ask for something in writing to prove the change actually went through. It’s hard for me to wrap my head around why our agencies would go through the extra effort of doing work that shouldn't even be necessary. 🤔 Or maybe we really do have two different systems running separately within the same country. 🕺

Peter Young5 said:Ugh, and I went ahead and tucked everything under Section 22 just to make it all line up perfectly.

Honestly, this principle of providing a detailed justification seems like the fastest route to getting things done.
For instance, whenever I’m dealing with default interest, I always just bake it right into Section 22—it’s just more efficient that way...
Is that really such a massive blunder? As long as the math checks out, does it truly matter? 🙂

Well, personally, I don't think just having the math be correct is enough.
I could have dumped everything into Article 22 every single time too, but I just have this need to keep things as organized as possible.
And honestly, it might not even be the fastest way. By the time you finish typing out the whole explanation, you could have finished the DOH 🤣
I can let you know tomorrow how I handled my entries 😉

As for me, I tend to struggle a bit with those late interest charges.
Whenever I process the final payments, I always deduct the interest first and then list that portion as unrecognized.
I really like to keep everything strictly by the P. S. A.
But, oh well—sometimes when things get overwhelming, even I make an exception 🤣

ruggedlynx63 said:Whenever I run into a situation like that, I just leave the discrepancy as is and attach a detailed explanation regarding the difference as a supporting document to the PPI filing.

Honestly, those kinds of explanations are just way over my head.
I tried explaining everything first and then presenting the final solution—it was quite a juggling act trying to make sure the reported sales tax wouldn't mess with our expenses.
Last year, I actually missed it with one client... do you think anyone at the IRS would even notice? 🥱:klap:

Peter Young5 said:I’m running into a bit of a headache where my sales tax figures in the PPP don't align with the total sales tax reported on my annual tax return.
I think I finally pinpointed the culprit. It turns out that for things like leasing rates and long-term assets acquired this year, I categorized the payments outside of the KPI—which means the system isn't pulling the sales tax from those specific entries into the PPP form.

At this point, my only workaround seems to be recording them under Section 22 via the checking account, just so the sales tax actually shows up in the PPP, even if the expense itself remains non-deductible.
Is it actually acceptable to categorize those types of costs under Section 22?

Thanks for the help. 🙂

No, you shouldn't put those in Section 22.
I used to drive myself crazy trying to figure out how to record everything correctly, but there’s always some kind of mess when dealing with that KPI.
At first, I would record them as deductible expenses just so the sales tax would flow through the KPI properly, and then I'd try to reverse the entry somehow so everything would balance out. Honestly, I can't even remember the exact way I handled the reversals—I basically just tinkered with the entries until I finally got the result I wanted. 🤣

placidlynx92 said:Now, someone really ought to give the IRS a call and let them know about this blunder they've made—it's caused nothing but a massive headache. 🙂 😁

Personally, I don't mind if they make mistakes.
We all trip up sometimes—it's just part of being human.
What actually bothers me is having had to call them out multiple times because they misinterpreted the Internal Revenue Code, or worse, cited outdated laws in their recent publications. It honestly baffles me that they couldn't just post a clarification online explaining that those specific articles contained incorrect interpretations. Or, at the very least, they could have included a correction on the front page of the next issue—just a simple way to provide the right info.
The most important thing is that they track who is using their articles, especially when those articles end up causing legal disputes.
Ever since I stepped away from working with them, I feel like I can finally breathe again. 😁

placidlynx92 said:You might want to try adjusting the reporting period—if I recall correctly, there’s an option for that right on the first page.

It’s there, but it only gives me the year rather than a specific date range, 🤔
so I can really only type in 2016.

I'm trying to file a tax return for a small business owner who just closed down their shop, but I've hit a snag.
The system keeps throwing this error at me:
•1.5000.2.0.2.25 - Only individual taxpayers are authorized to submit this specific IRS form.🤔

It’s a bit frustrating—everything else went through perfectly fine without any issues.

When I’m working through the CDC forms, I’m calculating contributions based on secondary employment.
The form does a pretty decent job of running the math for me.
The catch is, the system keeps calculating contributions for both Social Security and Medicare—basically treating everything as if it falls under both pillars—but my employer is actually only registered under the first one.
I’ve looked everywhere, and I just don't see an option to specify that the employer belongs to the second category.
Do you think the IRS will just automatically adjust it to only charge for the first pillar once they realize no contributions were ever due for the second? Or am I going to have to jump through hoops providing formal explanations and paperwork to clear this up?

placidlynx92 said:Yes—the moment you're hit with an obligation to file a return for that tax period, you're on the hook. Even if the business was active for just one single day during the entire year, that obligation remains...

Well, yeah, I figured as much.
I just know how things can get a little weird with specific edge cases here in the States, so I wondered if the rules might shift slightly when someone transitions from being an employee to running their own small business. 🤣
Up until now, every situation I've run into involved someone starting their own LLC right after leaving a regular W-2 job.

Thanks! 😉

If a small business gets shut down halfway through the year, but the owner actually started a regular W-2 job right after closing up shop—does that mean they still have to include those wages from non-self-employment when filing their tax forms 🤔
?

Brenda Chase3 said:I'll provide an answer here just in case anyone else runs into this situation. As a sole proprietor, you aren't required to report those profit distributions or dividends as separate income items. You are obligated to report your earnings from self-employment and any other professional activities, but these specific payouts don't fall into that mandatory category. You certainly *can* list them, but it isn't a requirement. To save everyone some time, there is a full breakdown explaining how this works in the link below.

http://www.accountingusa.com/tax-guides/sole-proprietor-distributions...6k/?section=34

It's been the standard rule for quite some time now: income from self-employment is the primary type of revenue that absolutely has to be listed on the tax forms. If you start including other types of income there, then suddenly you're obligated to report every single penny you receive.

I really think we should avoid any more confusion regarding what actually belongs on the forms and what doesn't 😉

Henry Edwards33 said:Ever since they patched that sales tax form, everyone seems to be hitting the exact same wall. 🤣

Here’s the error message popping up on my screen:

The total purchase value for this period shows an increase compared to last year, yet there are no recorded purchase invoices for the current filing year. This form is invalid.

My first attempt went through just fine.
But the second one keeps throwing this error at me.
The only real difference—aside from the headache—is that on this second one, all the assets have been sold and I've entered the sale dates.
I honestly thought it might not be related to that, especially since the first one sailed right through without any issues. 🤔

Has anyone here gone through the process of filing their residency fees using the KPI system before?🕺

Carol Price4 said:Yeah, just like compensation—in kind.

And you could even do it through a bank transfer.
For example, if I have an invoice from $333 that a client needs to pay, but they also have an approved credit from, say, $33.
When the payment comes in from $300, I’d record it as a $1,000 deposit minus a $100 adjustment. So, effectively, there's $900 hitting the books, which matches the actual cash flow moving through the bank account.

Peter Young5 said:Can an individual operating as a sole proprietorship actually sign a lease agreement, or is there a more effective way to structure that kind of deal? Also, if they decide to pour capital directly into that same property, would those investments be classified as long-term intangible assets or tangible ones—especially since they’re essentially investing in their own holdings?

Well, at the end of the day, an individual is still just an individual, regardless of whether they have a small business or a sole proprietorship. A sole proprietorship isn't its own separate legal entity—it's just you—and obviously, you can't really sign a contract with yourself. As for the assets, you’d typically record those via a formal entry into your business holdings, but the distinction between tangible and intangible assets doesn't actually change just because the owner is the one providing the capital. That classification depends entirely on the nature of the asset itself, not who's paying for it.

silvertrucker9 said:I appreciate the response, but my business isn't subject to corporate income tax, so the standard entry on these accounts doesn't quite work for me... the total amount on the invoice is $2500, which means I really need the expense to fall within the 2016 fiscal year. Plus, I'd have to figure out if an amended sales tax return is even possible in this situation...

Sorry about that! I totally lost my train of thought and forgot for a second that I'm filing under individual income tax. As soon as I see the word "post" in my head, I immediately start thinking about account ledgers 🕺
Ali Apis responded...😉

silvertrucker9 said:Good evening, everyone!
I’ve run into a bit of a situation. I realized I missed recording an invoice from December, which means the sales tax amount wasn't included in our VAT return for the last quarter. Now I'm feeling a little foolish, but I'm trying to figure out the best way to fix this. Can I simply record the invoice backdated to December and then file an amended return for the final quarter? I need to make sure both the tax credit and the actual expense are properly accounted for.
Thanks for any help.

Honestly, just book it in the new year and call it a day.
Unless we're talking about a massive expense, that is.
If it's a big one, I usually handle it through a journal entry like this:
/2200
1408/
4xxx/
And then, in January, I'll run it through the subledger and just record it as:
/1408
140/

Richard Howard55 said:Don't sweat it. Just send it over. 🙂
It says it's just an informational notice. They’re looking to see the relationship between the rate and the base over a 12-month period, which, I guess, isn't exactly what you have going on.

Wait, is this that same old headache where depreciation is calculated for less than a full year, so the actual amount doesn't line up with the annual rate? I haven't actually started working on tax forms yet, and honestly, I'm already dreading those notifications.