Centinel Pacific Accounting, LLC

01/21/2023

We have found that posting here is time consuming and difficult to keep up with. The actual work of caring for our clients is more important to us, so we have decided to discontinue support of this page. We will be removing it shortly. There are only so many hours in a day and we need to prioritize where we apply our efforts.
Thank you for your continued support.

11/23/2022

Your information is safe with us.

As reported yesterday, some of those venues that allow you to prepare and file your tax returns for free or for a minimal cost have been selling your information to Meta/Facebook. https://www.theverge.com/2022/11/22/23471842/facebook-hr-block-taxact-taxslayer-info-sharing
That’s right. Even though expressly prohibited by IRS regulation, these companies (H&R Block, Tax Slayer, Tax Act, Turbo Tax to name a few from the article) have been sharing various types of information about you and your families to include tax information in some cases. It will be interesting to see how this plays out, but the back peddling has already begun.

We at Centinel Pacific have never, and will never, betray our clients trust by disclosing any information to other businesses or individuals about you or your business without your express written consent. Never. Choose the companies you do business with carefully.

The Markup found that tax preparation services including TaxAct, TaxSlayer, and H&R Block have sent users’ personal financial information to Facebook through the Meta Pixel.

09/12/2022

The AK Governor announced the PFD amount. It will start being distributed before the end of the month. The amount is rather large and people should consider the tax implications now. We recommend setting aside $600 per PFD check to pay the taxes owed. It is a good idea to pay this amount in as an estimated payment once you receive the funds to avoid issues later.

As a note, it is important to know that because of the size of the PFD, children's PFDs will be subject to the Kiddie Tax. This essentially means that a portion of their PFD will be taxed at the parent's tax rate. Following our guidance on amounts to set aside above will head off the tax issues associated with the PFD.

03/14/2022

A talk about extensions. An extension is simply an administrative action to push the due date of your return out 6 months. This does NOT change the due date of any taxes that are due. That’s why when we extend a return, we prepare an estimate of any taxes owed and let the client know that they should make a payment to minimize or eliminate penalties and interest. It does NOT mark your return for extra scrutiny from the IRS. It isn’t a failure on anyone’s part. It only eliminates the initial due date.

Trust me, we want to get your return out as quickly as possible. We are not dragging our feet. You know what else we aren’t doing? We aren’t working weekends. We aren’t putting in 10 to 12 hour days. We are busy and we are working hard, but we are doing it within a normal business day. When you work people with continuous long shifts your opportunity for errors increases dramatically… especially when dealing with thousands of numbers. The quality of the return is more important to our firm than completing them all by an arbitrary date.

02/21/2022

Position Title: Bookkeeper I Department: Accounting Services

Reports To: Director of Finance FLSA Designation: Non-Exempt

Date Written/Revised: February 26, 2021

________________________________________________________________________

POSITION PURPOSE:

Assists in coordinating the efforts of the Accounting Services Department to ensure timely and accurate reporting of financial data for various clients. Assists in developing and implementing procedures and policies to safeguard the assets of our clients. Takes ownership in performing responsibilities, in an effective and efficient manner.

PRIMARY JOB DUTIES AND RESPONSIBILITIES:

• Assist in managing and maintaining QuickBooks accounts for various clients.
• Reviews daily QuickBooks bank feeds for completeness.
• Ensures accuracy of data entered into QuickBooks daily.
• Assist in processing/reviewing of weekly and bi-weekly payrolls and works closely with managers regarding accuracy of payroll and final checks.
• Verifies and reconciles general ledger accounts, bank and credit card statements on a monthly basis.
• Review P&L for reasonableness and proper use of accounts on a monthly basis.
• Ensure client questions are answered timely; follows through within 24 hours.
• Maintains an open line of communication with clients and management.
• Perform other duties and responsibilities asked by management based upon departmental needs.

OTHER:

• Must work independently and as a member of the team.
• Must be able to track and meet deadlines consistently.
• Due to the cyclical nature of the accounting and tax industries, employees may be required to work varying schedules to reflect the business needs of the company.

SUPPORTIVE FUNCTIONS:

In addition to performance of the essential functions, this position may be required to perform a combination of the following supportive functions, with the percentage of time performing each function to be solely determined by the manager based upon the particular requirements of the company.

• Assist Tax team with work, as needed.
• Assist Office manager with work, as needed.
• Volunteer and assist with outside company functions as needed.

SPECIFIC JOB KNOWLEDGE, SKILL AND ABILITY

To perform the job successfully, an individual should demonstrate the following competencies. Other competencies not listed may be required for specific positions. The requirements listed below are representative of the knowledge, skills, and/or abilities required.

• The individual must be able to safeguard client information and maintain confidential information at all times.
• The individual must be able to make decisions using sound judgment as needed, involving Management when necessary.
• Ability to deal effectively with clients and team members concerns in a friendly and positive manner. This involves listening to the nature of the concern, demonstrating empathy with the client and providing positive and proactive solutions.
• Ability to manage own time effectively, staying within budgeted hours per client.
• Must be a detail oriented, organized and a flexible individual.
• Knowledge of accounting operations in all aspects, to include debits/credits and impacts on accounts such as, accounts receivable, fixed assets, liabilities, equity, revenue, expenses, etc.
• Ability to operate a 10-key by touch.
• Ability to read, write and speak English to communicate effectively with fellow team members and clients in a tactful and professional manner.

02/16/2022

Today, Wednesday, 2/16/22, our office is closed and we are working remotely due to the icy roads. We plan on being back in the office tomorrow.

10/24/2021

Our last post seemed a bit negative, though the intent was just to speak some hard truth. We want business owners to focus on making their businesses successful, rather than spending time grinding through help menus and google searches to learn the nuances of accounting, the application of which will still elude most people.

This time let’s focus on another trend – starting a new business. The last two COVID years have resulted in many folks starting businesses. The problem with many of these businesses is that they are really hobbies (applying the 7 IRS tests). (For our purposes here today, we are not talking about Not For Profit entities). Not every business has to bring in $100,000 in revenue in order to be a business. The business doesn’t have to profit every year. However, the goal, according to the IRS and common sense, must be to make a profit – and that is profit AFTER paying the owner reasonable compensation.

Many people think the best tax break you can get for you side gig is to call it a business, because then you can deduct expenses. This doesn’t always pencil out. Indeed, if your business is making less than $50,000 in sales, it oftentimes will do better tax-wise if you treat it as a hobby.

Example: You decide to start a venture where you sell crafts. 30% of each sale would pay for all the expenses. This is a successful entity as it leaves 70% of each dollar earned for the owner and to grow the business. Sounds great. Here’s how it actually works out:
Business Hobby

Sales 50,000 50,000
Expenses (40% of sales) (15,000) (15,000)

Net Income/Owner's Earnings 35,000 35,000
Less 20% QBI deduction (7,000) 0
Less 1/2 of self employment tax (2,678) 0

Taxable income 25,323 50,000
Income tax (20% marginal rate) (5,065) (10,000)
Self Employment Tax (15.3%) (5,355) 0

Total tax paid (10,420) (10,000)

A $420 tax savings and you didn’t have to pay for business licenses, a monthly fee for QuickBooks ($30 or more per month), a professional to maintain your books (see our prior post), and no schedule C required on your tax return making that simpler. Then add in the time and frustration savings of not having to track every single expense throughout the year. Sometimes, considering your entity a hobby is the overall best option. Save the business option for those activities you are truly going to pursue as a business, with growth, improved efficiencies, and eventually selling for a gain.

10/23/2021

The number one issue we run into with small businesses that costs their owners unbelievable amounts of money in lost deductions and poor decisions is horrible bookkeeping. Intuit has spent a war chest of marketing funds to convince everyone that they can efficiently and accurately maintain their business books on their own. The truth is far from this. Since opening our doors in 2016, and in our decades of work in the industry even before this, we can say almost without exception EVERY set of books that we work with that have been put together by the owner or some other non-trained person are COMPLETELY USELESS – not just for preparing tax returns but for making sound business management decisions throughout the year. Should we hire another employee? Should we buy new equipment? Are we charging enough for our product/services? These are key questions that your financial books can answer if they are clean and correct. Otherwise, you are just guessing.

For this reason, we ALWAYS recommend you spend the money to have your books professionally maintained. Hire someone with the education, training, and experience to maintain your books throughout the year. By the way, this is not what Intuit offers and you won’t find it for $30 a month.

While people will immediately wonder how they can afford that type of service, the truth is you can’t afford to pass it up. We frequently see financial records in such disarray that conservative estimates of lost or missing expenses exceed $10,000 in a year. For less than that, you could afford to have your books maintained by a professional all year long AND have your tax return prepared by a professional. As a bonus you would know the health of your business throughout the year, real time.

06/23/2021

Everyone is excited about the latest “free money” being distributed by the IRS. We are talking about the Advanced Child Tax Credit. The IRS web site has a page dedicated to managing this credit. If you think you are eligible but haven’t filed a tax return, or you’ve had a child in 2021, you can update information here to access those funds.

Also on this page is the ability to opt out of the advance payments. If you don’t need the money to feed your kids, we strongly suggest you opt out of the advance payments. The reason for this is the fact that most people will likely see more income in 2021 than they did in 2020 (the tax year the IRS is using to compute your advance). When your 2021 tax return is completed, the Child Tax Credit will be reconciled and if you only qualify for a reduced amount or none at all then you will have to pay some back. We’ve seen this before with the Healthcare Premium Tax Credit and while for a number of people it works fine, for the ones that it doesn’t it can be financially devastating at tax time.

Finally, if you do receive the Advance Child Tax Credit, please track how much you receive during the tax year. Having just gone through the struggle of people trying to remember how much they got in stimulus payments, we know this is going to be a problem. The key here is it doesn’t have to be a problem for YOU. Just make a note somewhere each time you receive a payment. That will make reconciling the credit so much easier on your return. If you don’t and the IRS has different amounts in their records, your return will go into the pile that needs adjustment. Resulting in delays, reduced refunds, additional taxes, interest, and penalties.