Admin Books Newsletter
Running a small business is fraught with challenges. Admin Books partners with business owners to provide financial and bookkeeping services through our team approach. Our goal is to free you to focus on growing and managing your company. The purpose of this e-zine is to provide our clients, associates and friends with valuable tools to manage their business. Enjoy! Renee
Mortgage Information You May Not Know…
Tracing Rules: We all know that you can deduct the mortgage interest on your home (main home or second home), but did you know that you need to pay attention if you pull money out? You need to “trace” the proceeds. What this means is that you need to keep track of how you spend the money. If you use it for business or real estate investments, you deduct the interest there. However, if you use the money to purchase a car, that portion of the loan is not deductible.
Name Not on Loan: You can also deduct mortgage interest even if your name is not on the loan or the title. For example, a parent can purchase a home for their child; however, the child makes all the payments and is responsible for the upkeep. The child is allowed to deduct all the mortgage interest. It is a good idea for the parents to show the interest, back it out and then issue a 1098 to the child.
Limits on Deduction: The mortgage interest deduction is limited to 1 million dollars of acquisition debt. This is the amount of debt used to buy, build or improve the home. It is also limited to $100,000 of home equity debt.
Foreclosures and Short Sales: No one needs to tell you that we are in historic times. Every day you hear of foreclosure filings, bank repossessions, auction notices and short sales. However, you or someone you know has probably been faced with selling their home or modifying the loan. So what does that mean for you…what you do you need to know?
First, you need to know if your loan is a recourse (personally liable) or non-recourse (not personally liable) loan. Generally, you may pay taxes on the cancellation of debt for recourse loans. There are exceptions to the rule (of course!). Some of the most common exceptions are bankruptcy or an insolvent borrower.
There are exclusions for cancellation of acquisition indebtedness on principal residences because of the Emergency Economic Stabilization Act of 2008 and the Mortgage Forgiveness Debt Relief Act of 2007. This is in effect from January 1, 2007 to December 31, 2012. Rules are that it has to be your principal residence and the loan is limited up to $2 million dollars. It does not include home equity debt. The debt must be used to purchase, construct or improve the residence. Any money used for personal use is not allowed. The homeowner cannot have filed bankruptcy or insolvent.
Know that the state of California only excludes up to $800,000. If the cancelation of debt is more than that amount, you will be charge taxes on that amount from the State, even though more is excluded from Federal.
Mortgage Modifications: A loan modification may result in cancellation of debt and potentially taxable income. Again, the factors are if the loan was recourse or non-recourse and what the debt was used for. Was the money used to pay off credit cards or pay for college tuition? If so, that amount does not qualify and you will pay taxes on that amount.
Basis: When you sell your home, you would only pay capital gains if it exceeded $250,000 for single taxpayers or $500,000 for married filers. However, the basis of the home is reduced by the amount that was canceled. For example, if your purchase price was $600,000 and your cancellation of debt was $60,000, the basis would be $540,000.
You can get more information on the IRS website or Publication 4681 to get more information on canceled debts, foreclosures, repossessions and abandonments.
This article is for educational purposes. It is not to provide advice for your specific situation. Please consult your tax preparer to confirm how this information may/may not pertain to you.
Managing Your Business with QuickBooks®
Beginner Class - November 13th - In Sunnyvale, CA.
CLICK HERE TO REGISTER NOW, OR VISIT OUR WEBSITE!!
This class is perfect for QuickBooks users with minimal experience. You will learn the essentials with step-by-step instructions. The class is taught with a power point presentation and a QB file demonstration. All attendees will receive an extensive 244 page workbook with screen shots showing step-by-step explanations
When: Friday, November 13, 2009 from 9:00 am– 5:00 pm
Where: The Domain Hotel - 1085 East El Camino Real, Sunnyvale, CA 94087 (408) 247-0800
Cost: $225* (includes lunch and book) *Regular price is $250. Register before Oct. 30th to receive $25 discount!!
Topics Include:
- Introducing QuickBooks
- Accounting Behind The Scenes
- QuickBooks Data Files
- Customers
- Invoices
- Credit Memo
- Class Tracking
- Job Costing
- Vendors
- Bills
- Credit Cards
- Reconciling
- File Set Up
- The Chart of Accounts
- Users and Passwords
- Preferences and Customizing
- Reports and Graphs
- Cash Versus Accrual
NO PRIOR KNOWLEDGE OF ACCOUNING NEEDED!
QuickBooks® is a registered trademark of Intuit Inc. Admin Books, Inc. is not affiliated with Intuit, Inc
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Deadline Reminders: 
Individual tax deadline is October 15th.
Sales Tax Quarterly Report due October 31st.
Payroll Quarterly Reports due November 2nd.
Networking Opportunities: 
Free Networking Event: October 21st at 6pm - 8pm at Canyon Fireplace: 3193 Belick Street, Santa Clara. For more information contact Karen Black at 408-921-3174 or Click Here!
Jubilee CEO Meeting: Saturday, November 21st from 9:30-11:30am in San Jose. Cost $12 but FREE for 1st time visitors! Topic: Social Media - come hear Patrick Schwerdtfeger!! RSVP to 408-262-0900 ext. 317 or Click Here!
Upcoming Webinars:
Admin Books is offering 12 webinars that will provide you confidence and clarifications on how to run your business successfully. Choose the topic that you most struggle with or select a group of them. These one hour interactive webinars will be held every other Wednesday from 9:30am - 10:30am PST. And, the cost is only $39 each. If you bundle 5 webinars, you get the 6th one FREE!
How to Read & Interpret Financial Stmts - October 7
It is one thing to be able to read your statements. The important part is being able to comprehend what they say. Learn how to understand what your numbers are telling you, manage your business better, set financial goals and learn the profit formula! - Click Here To Register
Sales Tax: Tips and Common Mistakes - October 21
Setting up sales tax items, tracking sales tax, paying sales tax correctly and common mistakes - Click Here To Register
Entering HUD Statements for Real Estate Investors - November 4
Does your balance sheet reflect your assets and liabilities correctly? This class will teach you step by step on how to record investment property, mortgage loans, security deposits, closing costs, escrow deposits, PITI, taxes paid in escrow and much more! - Click Here To Register
Processing 1099's - November 18
Setting up vendors, mapping accounts, processing, printing, mailing forms and getting 1099's and 1096's for FREE! - Click Here To Register
End of the Year Checklist - December 2
What do you need to do before the year ends to clean up your QuickBooks file, manage your business and get ready for a tax return? We'll review the 27 item checklist of all you need to know! - Click Here To Register
We have recorded webinars that cover the following topics: Tracking Income, Managing Expenses, Reconciling, QB File Set-up & Maintenance, Customizing QB, Creating Reports & Financial Statements, and Chart of Accounts.
W-e 
E-ncourage
B-usiness Owners
I-n
N-eed Of
A-ccurate
R-ecords!
Quotable Quote:
“You can't do today's job, with yesterday's methods, and still be in business tomorrow”
~Anonymous
Free Stuff: I want to make sure you are aware of several items of value that you can take advantage of compliments of Admin Books. Go to my website to get:
- FREE business quiz
- Audio on personal finances
- Business blog
- Mileage Log
- Records Retention Guide
- 30 minute consultation for perspective clients
As a business owner, you're the pilot who ensures the business takes off and lands successfully. Are you flying by the seat of your pants or do you have a flight plan? Read my book, "Your Financial Flight Plan: Pilot Your Business To Profitability. Check out your copy at: YourFinancialFlightPlan.com
The book is also available at Amazon.com, Barnes & Noble and BookSmart in Morgan Hill!
Are Your Books In Order?
What is the status of your bookkeeping??
Are you current??
Are your books accurate??
Admin Books can assist you with:
- Data Entry
- Reconciliation
- Payroll Processing
- Sales Tax Reports
- Workers Comp Reports
- Job Costing
- Private Consultations
- Financial Coaching
- QB File Clean Up
Call our office to confirm our services match your business needs!
Best Regards,
408-782-9640
