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What Happened with the Fiscal Cliff?

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Posted by Jeana Brookes on January 4, 2013 at 10:34 am

The fiscal cliff has been averted — at least for the time being — after a year of worrying, debating, and discussing. Congress and President Obama decided to raise taxes a bit, delay the scheduled budget cuts that promised to crush the economy, and create a plan that will delay (for now) a total economic meltdown.

The “fiscal cliff” is the term used to describe the situation our government faced at the end of 2012, when the terms of the Budget Control Act of 2011 were scheduled to go into effect (December 31 at midnight). In the beginning of the 2013, about $500 billion in tax increases and $200 billion in spending cuts were scheduled to take effect. Now that the House has passed a Senate deal to avert the fiscal cliff, it will become law when President Obama signs it.

According to CNN, there are five things to know about the complex bill, and what it does and doesn’t do:

1. No side won: Republicans accepted higher taxes for the wealthiest Americans. Democrats accepted a higher threshold for how much income will face a higher tax rate. President Obama broke a vow to raise tax rates on annual household income over $250,000 and individual income over $200,000.

2. We may have a new definition of the ‘wealthiest’: President Obama made raising tax rates on the top 2% of earners in America a centerpiece of his re-election campaign. The 2% figure includes those with income over $250,000. The compromise bill changes that figure. Tax rates will go up only for individuals with income over $400,000 and families earning more than $450,000. The deal does, however, cap some deductions for individuals making $250,000 and for married couples making $300,000. That allows the president bragging rights to say the deal raises taxes on people at those income levels. But he said just weeks ago that capping deductions at the $250,000 level would not be enough and that tax rates would rise.

3. Three more fiscal cliffs are on the way: The deal delays the sequester, a series of automatic cuts in federal spending, for two months. In the meantime, the Senate plan calls for $12 billion in new revenue and another $12 billion in spending cuts. The spending cuts are to be split between defense and nondefense spending. The other two: the debt ceiling and a continuing budget resolution.

4. The majority of House Republicans opposed it: Although House Speaker John Boehner supported the bill, the No. 2 Republican in the chamber, Majority Leader Eric Cantor, opposed it, as did most Republicans in the House. So while the Senate vote was an overwhelming 89 to 8, the House vote was 257 to 167. The vast majority of House Democrats supported the bill.

5. Your paycheck is still likely to shrink: The deal does not address an increase in payroll taxes. No legislation to address the fiscal cliff is expected to. Now, the cut on those taxes has expired. In monetary terms, those earning $30,000 a year will take home $50 less per month, and those earning $113,700 will lose $189.50 a month.

 

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What is Bookkeeping?

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Posted by Jeana Brookes on December 18, 2012 at 2:12 pm

Most people are involved in some sort of bookkeeping, whether for their personal use or for their organization, yet there are many misunderstandings about what bookkeeping actually is.

Many San Diego accountants believe that their clients should be educated on bookkeeping in general, so that they can have better understanding of why they do things and what the finances of their own business need to do.

Bookkeeping is the recording of all financial transactions undertaken by an individual or organization. The organization may be a business, a charitable organization or even a local sports club. A financial transaction is any event that involves the exchange of money.

In short, bookkeeping is “keeping records of what is bought, sold, owed, and owned; what money comes in, what goes out, and what is left.”

The name comes from the fact that financial information used to be recorded using pen and ink in paper books – hence “bookkeeping.” However, these days it is more commonly recorded in a computer system.

Individual and family bookkeeping involves keeping track of income and expenses in a cash account record, bank account statements, credit card statements, or savings account passbook. Individuals who borrow or lend out money also track how much they owe or are owed from others.

Two most common bookkeeping methods used are the single-entry bookkeeping system and the double-entry bookkeeping system:

  • Single-entry bookkeeping uses only income and expense accounts. Its is a simple method of bookkeeping relying on a one sided accounting entry to maintain financial information.
  • Double-entry bookkeeping requires recording each transaction twice, as debits and credits. It is a set of rules for recording financial information in a financial accounting system in which every transaction or event changes at least two different nominal ledger accounts.

While many companies outsource their bookkeeping to accountants, bookkeeping San Diego specialists agree that any individual or organization involved in bookkeeping should be aware of the process and what goes into it. A more informed client can assure that his or her accounting services are the most appropriate for their needs.

Posted in: Accounting, Business, Tax Preparation
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What Is SEO?

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Posted by Amanda Guerrero on November 2, 2012 at 1:08 pm

Search engine optimization (SEO) may have played a part in helping you find this article. In fact, most – if not all – of the websites that we find by doing keyword searches in Google implement SEO.

In short, SEO is a process that involves editing a website’s content and programming code in order to help search engines figure out:

  • what the page is about
  • how useful the content might be to users

The goal of a successful SEO campaign is to increase the number of visitors a website receives from search engines, by increasing the site’s visibility in search results. The higher up the website appears in search results (the first three to five listings are prime spots), the more likely someone is to click on it.

Getting a high ranking can be achieved by targeting specific keywords that users frequently search for. For example, when optimizing a website for a pediatrician in Seattle, some specific keyword phrases that might be targeted ar” “pediatrician seattle” and “seattle pediatrician.”

The words on the page, however, are not the only important aspects of SEO. Search engine optimization also involves how a website is structured and how easy it is to understand (both for people and search engine robots). But the end goal is always the same: attracting visitors to the website.

Skeptical about SEO? Consider the fact that 90 percent of Internet users never look past the third page of search results – and 62 percent never even look past the first page. If you want to attract visitors to your website, ranking high in search results is critical. And to do that you need SEO.

Terms to know

Search engine: a tool/program that people use to search for information on the Internet (i.e. Google, Yahoo!, Bing).

Keyword/keyword phrase: a word or group of words used to find information online.

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What are the Differences Between Obama and Romney’s Energy Policies?

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Posted by Jeana Brookes on October 4, 2012 at 1:52 pm

Energy policy is the way in which a government will decide how to address the issues of energy production, distribution, and consumption. The 2012 Presidential Election is coming to an end, and several of the debates have honed in on the two presidential candidate’s energy policies. There are similarities and differences between President Barack Obama and Governor Mitt Romney’s positions on energy development. Here are some of their energy positions on select, relevant topics:

Clean Energy

  • Obama supports renewable energy, and under his term renewable energy doubled. He is for government investments in renewable energy, including wind, solar, biomass and electric vehicles. This includes all clean energy policies from subsidies for residential rooftop solar panels San Diego projects to large-scale wind farm tax credits.
  • Romney is against clean energy and would cut any existing funding for it. He opposes government investments in both solaire energy systems and wind energy, and puts his support in the oil industry. Romney would rather invest in oil drilling and natural gas.

Climate Change & The Carbon Footprint

  • Obama believes in climate change, and issued the first ever carbon dioxide reduction requirements for vehicles and new power plants. He supports cap-and-trade systems.
  • Romney is not convinced by the climate science and believes that carbon dioxide is not harmful to health. He opposes any sorts of carbon tax and cap-and-trade systems. If elected, he would amend the Clean Air Act to prevent the Environmental Protection Agency (EPA) from reducing carbon pollution.

The Keystone XL Pipeline

  • Obama has already approved the southern part of the Keystone XL, but is unsure of his opinion on the northern sector. He is waiting until the environmental analysis of the new Nebraska route is finished in 2013 to decide.
  • Romney favors “North American Independence”, and has said that on day one of his prospective Presidency he would authorize the Keystone XL pipeline.

Oil & Natural Gas Drilling

  • Obama supports expanded oil and gas drilling and the development of natural gas resources. He would open more offshore areas for oil drilling and support drilling on existing leases. However, he would maintain the drilling moratorium off the Pacific coast and most of the Atlantic coast. He favors an “all of the above” strategy and wants to continue reduction in US reliance on foreign oil.
  • Romney also support expanded oil and gas drilling and the development of natural gas resources. However, he favors “North American energy independence,” leaning heavily on increased imports from Canada and higher US production. He would allow drilling on federal lands and waters. Romney would give that power from the Interior Department to states and would open all federal lands and waters for drilling. In addition, he would keep tax incentives and tax breaks for oil and gas drilling.

Coal

  • Obama wants to reduce greenhouse gas emissions from fossil fuels and the EPA has negotiated agreements with some utilities to close down aging coal plants (many to be replaced by natural gas-fired plants).
  • Romney would remove obstacles and EPA regulations that are “impeding the development of coal”.

The two presidential candidates have several similarities and differences between their energy policies, the fate of which will affect not only the US economy, but the global one as well.

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How Big Of A Problem Is Medical Debt In Arizona?

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Posted by Amanda Guerrero on October 3, 2012 at 10:49 am

Arizona state flagHealthcare debt collection is a serious problem throughout the country, and Arizona residents are not exempt from the financial hardships brought about by medical debt. In fact, a study by University of Arizona researchers found that residents of the Grand Canyon State owed more than $2.4 billion in medical bills in 2008. What’s more, one in four surveyed adults were either paying healthcare-related debts or had had problems paying a medical bill in the last year.

Who is most affected by medical debt?

Although medical debt seems to affect Arizona residents in different age groups and economic classes, middle-aged Arizonans with low to moderate incomes have the highest rate of debt. Following is a breakdown by age group of adults who were paying off medical bills at the time of the survey:

•    Ages 18-29: 26 percent
•    Ages 30-39: 34 percent
•    Ages 40-49: 32 percent
•    Ages 50-64: 24 percent

Families with children are also greatly affected, especially those headed by couples or single females. In fact, these households are 60 percent more likely to have medical debt than those headed by a single male or those without children.

How does Arizona compare to the rest of the country?

Arizonans are, on the whole, better off when it comes to medical debt than the average American. A national survey of healthcare debt collection found that 65 percent of Americans with medical bills had problems paying for other necessities. In Arizona, however, only 39 percent of adults with medical debt reported being unable to pay for basic necessities.

What can healthcare organizations do to collect on unpaid debts?

Partnering with a medical collection agency whose employees are well-trained in collecting from patients is one way that healthcare professionals can increase collections. For example, instead of overwhelming patients by demanding full payment, medical collection agencies often work with patients to set up manageable payment plans. This not only brings in money for the healthcare facility, but it helps patients pay down their debts.

Source: arizonahealthsurvey.org

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What Should I Look For In a Medical Collection Agency?

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Posted by Amanda Guerrero on September 27, 2012 at 11:49 am

Medical collection agency repThere’s no shame in turning to a medical collection agency to help straighten out your practice’s accounts. Though debt collectors often get a bad rap, less than one percent of collection agencies actually get complaints filed against them for employing aggressive tactics. Most importantly, collectors are good at what they do, and they succeed in collecting millions of dollars for healthcare organizations each year.

If you are a physician looking to outsource your practice’s collections processes to experienced, third-party collectors, here are a few questions to ask yourself before settling on a revenue cycle partner:

Does the company work with other businesses similar to mine?

When it comes to choosing a collection agency, the most important part is finding out whether the company is a good fit for your practice. Because different collectors deal with different types of debts, and there are different laws regulating different industries, you will want to go with a company that knows the ins and outs of the medical industry and has ample experience working with businesses like yours.

How will the agency’s collectors treat my patients and represent my practice?

Even though the medical collection agency is a separate entity from your practice, the company’s collectors are going to be contacting your patients on your behalf. Therefore, it is important for the agency’s collectors to be courteous, professional and to treat your patients with respect. To protect your practice and your reputation, choose a company that agrees to:

  • Run through the collection process with you from beginning to end
  • Record their phone calls with patients
  • Show you sample collection letters for approval

Working with a healthcare debt collection service can be a smart decision for medical organizations struggling with collections. Experienced debt collectors can bring in more money, more efficiently, and for a fraction of the cost. Best of all, collections services allow physicians to focus on treating patients without fretting about the status of their accounts.

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What Are the Differences Between Obamacare and Romneycare?

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Posted by Amanda Guerrero on September 12, 2012 at 3:00 pm

Capitol domeFrom EHR law to health insurance reform, big changes are happening in healthcare and not everyone is in agreement about the direction those changes are taking. More recently, the Affordable Care Act (ACA), which President Obama signed into law in 2010, has been topic of conversation, as people try to discern the differences between the so-called Obamacare law and a similar healthcare plan Mitt Romney signed into law in Massachusetts four years earlier.

In an article posted on this blog last month by Health News Watch, some of the main parts of the ACA were broken down and explained more simply. Here, I’ll talk about some of the ways the two health plans differ – which, as it turns out, is only slightly.

Is there a penalty for not buying insurance? Both plans have penalties in place for those who choose not to purchase insurance. Under Obamacare, the yearly minimum would be just under $700. Meanwhile, the yearly minimum for Romneycare is approximately $1,200.

Are employers penalized for not providing insurance? The ACA penalizes companies with more than 50 employees, while the Massachusetts plan does so for companies with more than 11 employees. The actually penalty per employee would be $2,000 and $295, respectively.

Do insurance companies have to cover pre-existing conditions? Both plans require coverage of pre-existing illnesses; however, the Massachusetts plan allows insurers to limit coverage of certain conditions to six months.

Until what age can children stay on their parents’ insurance plan? Both Romneycare and Obamacare allow children to remain covered by their parents’ insurance until the age of 26. The difference with Romneycare is that if a child has filed taxes on their own (not as a dependent) for at least two years, even if they are under 26, they must purchase their own insurance plan.

How are the plans funded? Romneycare is funded in large part by the federal government, which made it possible for the state not to raise taxes for residents. Obamacare, on the other hand, is a federal program, and funding for the health plan must come from new taxes. This includes a tax on tanning salons, some medical devices, and certain premium health plans.

The different changes being implemented in the healthcare industry can be confusing. With the help of healthcare professionals and EHR law experts, patients can learn more about those changes, including how they are affecting care delivery, access to medical treatment, and cost of care.

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Should I Use a Credit Card to Start my Small Business?

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Posted by Health News Watch on September 11, 2012 at 1:55 pm

accounting encinitasIn short: No. Many financial experts say it’s best to avoid reaching for the plastic when starting a new business, citing the fact it can reduce the long-term success of the enterprise, according to accountant San Marcos.

The U.S. Federal Reserve says more than 80 percent of small-business owners use credit cards, and nearly 60 percent of start-ups rely on credit cards for financing during their first year of business. A recent study by the Ewing Marion Kauffman Foundation found that for every $1,000 increase in credit card debt, a firm’s chances of survival decreases by more than 2 percent. So what’s the problem with funding a start-up through credit? Many reasons

  • Credit cards mean limited funding: How much money you’re able to glean from a credit card is largely a function of your credit standing and income. Many entrepreneurs are young and often at a disadvantage when it comes to those factors. And even if you’ve managed to garner high credit lines, they will likely be insufficient to cover the costs of getting a business up and running.
  • It puts personal finances in jeopardy: Entrepreneurs often assume that small-business credit cards insulate their personal finances from the company’s, but that’s a lie. Whether you use a business or consumer card, you’re going to be personally liable for debt. So, relying heavily on a credit card for financing could significantly increase the pressure you feel. If things don’t go as planned, you not only will default on your business debt, but you also will face serious ramifications on a personal level.
  • Making tough times tougher: Credit card debt is expensive: The average interest rate for a business card is about 15 percent. Given that you’re unlikely to have much money in reserve, an economic downturn or lag in sales could prevent you from making even minimum monthly payments.

Accounting Encinitas firms say the best way to avoid using credit cards and risking financial stability is to seek investors early. By putting together a solid proposal, complete with a detailed business plan and projections for both future revenue and potential return on investment, you’ll be putting your business in the best possible position to succeed.

Funding a start-up through equity rather than credit card debt keep business owners from wasting crucial early-stage revenue paying down debt or the interest associated with it. This method allows more funding to go directly into the business instead of debt, alleviating future accounting pains. Even if things don’t work out, at least personal finances will be spared the tragedies of the business failure and you’ll have a speedier recovery.

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How do I avoid legal and accounting troubles with business partners?

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Posted by Jeana Brookes on August 28, 2012 at 11:07 am

tax preparation in encinitasWhen choosing strategic business partners one must consider how they will choose the right people, create an appropriate structure, define expected measures of success and identify potential threats or failures. Most importantly, one must not overlook legal and accounting in Encinitas issues that may arise during the partnership. Below are some key points the Financial Post recommends when starting a successful, trouble-free business relationship between two entities.

Protect intellectual property: It is important that any business agreement safeguards the intellectual property of each participant. Doing so helps to reduce the risk of unnecessarily exposing what makes your company special. This alone can have considerable implications on the ownership of licenses and future royalties.

Protect confidential information: To protect confidential information, you can limit its access to those who require it to carry out the obligations defined in the alliance agreement. Another safeguard is to agree upon and monitor specific standards for sharing, managing and guarding confidential information.

Define sharing agreements: Alliances are built on the premise of sharing resources such as data, intellectual property, competitive intelligence, and access to employees and customers. Sharing such resources creates a unique set of legal and business requirements that need to be included in an alliance agreement. Begin by taking an inventory of the resources that you plan to share so that they may be included.

Partner with competitors. Defining the rules around sharing in an alliance agreement is particularly important when forming an alliance with a competitor. For example, competitive partners in the airline industry establish rules around sharing routes, and competitive partners in the auto manufacturing industry develop detailed rules about sharing vehicle components. In fact, hyper-competitive partners often develop a “co-opetition” framework that recognizes two partners may effectively leverage an alliance for some product offerings or targeting some market segments while remaining fierce competitors in others.

Protect expertise and client information: Resources commonly shared during an alliance include human resources and customer data. As a result, there can be concerns that employees may work for the current or former alliance partner. To safeguard against this risk, include in an alliance agreement an employee non-solicitation clause where partners agree not to offer employment to the other partner’s employees during the term of the agreement or for a defined period after the conclusion of the alliance. A similar non-solicitation clause can be added so that partners cannot solicit each other’s clients.

Protect confidential information: To protect confidential information, you can limit its access to those who require it to carry out the obligations defined in the alliance agreement. Another safeguard is to agree upon and monitor specific standards for sharing, managing and guarding confidential information, especially during tax preparation in Encinitas.

Define post-alliance obligations: Whether an alliance is established for a specific, one- time event or it is intended to span several years, participants need to identify the conditions that would cause the partnership to end — either on friendly terms or not (e.g. because of non-performance). The more involved the alliance, the more important it is to consider post-alliance obligations to minimize any potential business disruption or damage to complex relationships (with customers, suppliers, manufacturers and/or distributors).

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What Can I Do About My Past Due Medical Bills?

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Posted by Amanda Guerrero on August 15, 2012 at 8:08 am

Dollar and dimes for medical bill collectionsMedical bills, though not the same as credit card debt often incurred through irresponsible spending, can still affect your credit score. The impact on your credit is most significant when accounts go more than 90 days past due. If you have unpaid bills that have reached a medical bill collections agency, consider taking the following steps to lower your debt and protect your credit score:

1. Contact your healthcare provider or the medical collection agency responsible for your account. Request an itemized statement and make sure that what you’re being charged for is accurate. Patients are often erroneously over-billed or charged for services that they didn’t receive.

2. Contact your insurance provider to find out whether they might cover some of your medical expenses. Oftentimes, medical claims get denied due to missing or inaccurate information. Though providers sometimes end up refilling the claims or writing the bills off, the service fees sometimes get passed on to patients. If you think that your insurance provider should be responsible for some of the services you’re being charged for, contact them to find out.

3. Suggest a settlement or work out a payment plan. Medical bill collections agencies will often settle for a lower sum if you offer to make a lump-sum payment. Find out what your ‘payoff’ amount is, or make a reasonable offer to the collections company. Paying your medical bill in full this way could be a lot more reasonable than what your current balance is. On the other hand, if can’t afford to come up with the entire ‘payoff’ sum, suggest working out a payment plan with manageable monthly payments.

4. File for bankruptcy. Exhaust all other options first, and consider filing for bankruptcy as a last resort. After you have filed for bankruptcy, be sure to send a letter to the medical collection agency, so that they can stop collection efforts. Depending on the type of bankruptcy you qualify for, your medical bills will either be erased or you will have a reasonable repayment plan set up for you by the courts.

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