Newsletter: May, 2008     A Publication for the Customers and Affiliates of Answers Accounting, Inc.

New! Sage Accpac 5.5 Released with CRM!

Sage Accpac Extended Enterprise Suite has arrived with a 360 degree view of your front and back office. Finally the power of two award wining software programs together as one powerful suite.
For the first time Sage Accpac ERP will come with a SageCRM 200 server application and 1 user. All you have to do is turn it on and see the benefits that you can enjoy by having an award winning CRM product built into your Accpac.
Not only is it there but its FREE. A saving of $5,982.60 and it doesn’t matter what edition you are running 100, 200 or 500.
If that is not enough, Sage has added an Integrated Dashboard, a new GL Roll up function, AR Inquiry, Customer number changer, Vendor number changer, GL Security, GL account code changer, Item number changer, Ops Inquiry and eFILE for Payroll. That’s just the free stuff which would save you an additional $6,726.00.
If that is not enough, Sage is now allowing Data Base changes at no cost, if you are a Pervasive SQL user and want to switch to MS SQL there is no charge, Answers will register your change of Data Base and your LanPak’s are ready for your next roll up to 5.5.
If you want to know more give Jan Senecal a call at 866 680-7742 ext 911 or check out the information available on our website www.answersaccounting.com.

The Economic Stimulus Package of 2008
How Can You Benefit?

In February 2008, Congress enacted the Economic Stimulus Package of 2008. This legislation is designed to make increased spending by business more attractive for the 2008 tax year. This legislation provides companies with incentives to purchase assets such as software and improve their business. By understanding the full benefits provided by the passage of this act and taking full advantage of them in 2008, companies can reduce the cost of qualifying property by purhasing it and placing it in service in 2008.
The key components of this legislation that focus on business include an increase in the 21 U.S.C. 179 maximum deduction, an increase in the maximum amount of qualifying property that can be placed into service during the 2008 tax year, a bonus depreciation, and an increase in the "luxury" auto depreciation.
The "Bonus" provisions of the Act are only applicable to assets purchased and placed in service during the 2008 calendar year, while the Section 179 deductions are applicable to the 2008 tax year-companies that have tax years that do not match the calendar year can only take advantage of both of these tax incentives at the same time during the portion of their 2008 tax year that falls within 2008.
Section 179 Limitations
Historically, the Section 179 deductions have favored small businesses. However the temporary increase in the maximum deduction from $128,000 to $250,000 and the increase in the maximum qualifyng property that can be placed in service were designed to allow the benefits to be shared by more companies. The amount a company can deduct is reduced dollar-for-dollar for the amount the value of qualifying property exceeds $800,000. For example, if a compnay purchases $900,000 worth of qualifying property in 2008, the maximum deduction would be $150,000.
It is often thought that "off the shelf" computer software is not considered qualifying property. Quite the contrary, since 2002, Section 179 has included software in the list of qualifying property, but this provision is to be phased out after 2010. The vast majority of software solutions provided by Sage Software are considered "off the shelf" by IRS definitions: 1) Readily available for use by the general public, 2) subject to a non-exclusive license, and 3) has not been substantially altered-any modifications may not exceed the greater of 25% of the software price or $2,000.
(Example of "substantially altered: If you purchase a $50,000 software solution, modifications would have to exceed $12,500)
Bonus Depreciation
Another key component of the Economic Stimulus Act of 2008 is a 50% bonus depreciation for qualifying property placed in service during the 2008 calendar year. This bonus depreciation is in addition to the standard depreciation that can be taken and is calculated on the adjusted basis over the life of the asset according to the Modified Accelerated Cost Recovery System (MACRS).
Impact Scenario:
Company purchases software solution for $10,000
Bonus Depreciation: $5,000
Asset Life: 3 years
Straight-Line method using full month convention (SF)
Standard Depreciation: ($5,000/3 years/36 months) x 12 months would be $1,667
Total Depreciation: $6,667
Tax Savings in 2008 (Assuming 30% rate): $2,000
Maximizing the Tax Benefits
Careful planning will ensure that companies can write-off a larger protion of their asset purchases. By analyzing the timing of asset purchases, and determining whether to take Section 179 and/or the 50% bonus depreciation, companies will be able to maximize the benefits available.

Mark Your Calendar!
Upcoming Training and Webinar

Per popular request we have decided to do a training webinar monthly. Each webinar will be in a Lunch and Learn format, the cost will be $100.00 per company (not person). The training will last between 1 to 1 1/2 hours and you may register with either Jan (866 680-7742 ext 911) or Nicole (866 680-7742 ext 977). The purpose is to give our customers training in area’s that have been most frequently requested. This months Webinar will be:

Using the Financial Reporter on May 28th at 11:30 PT or 1:30 PM CT.

Future sessions will include General Leger feature use, recurring entries, Account Groupings and the new features in 5.5. Bank Reconciliation, Set up and Using Tax Tables, Using the finders with filters. This is just a sample of what’s to come so don’t for get to sign up when you see the dates in upcoming Newsletters.

1099 CPRS Reporting

Whether you do business with a small number of vendors or hundreds of vendors, Sage Accpac can assist you with your governmental reporting requirements. All that is required is the appropriate selection of the options that control the accumulation of the data needed to be reported on.

To setup your system to track 1099 amounts we start in the Accounts Payables Options screen, you select the “Transactions” tab and mark the option to “Use 1099/CPRS Reporting. You will notice that you have two additional options needing your input. The option “Allow Edit of 1099/CPRS Amounts” does just that – choose this option if you want the option to be allowed to edit amounts accumulated due to errors made throughout the year. Another option is to have the full amount of invoices, credit notes and debit notes default to be 1099/CPRS amounts – if you do not choose this option you will need to record the amount of each transaction that belongs in the 1099/CPRS bucket at transaction entry time.

Your second step in setting up your system to track 1099 amounts is to turn on “Tax Reporting” in the Vendor maintenance screen “Invoicing” tab. Once this option has been selected the screen asks for additional information needed to print your 1099 forms.

You will need to enter the vendors “Tax Number” and select the type from the drop down list. You also need to enter or select the 1099 or CPRS code that matches the type of goods or services you purchase from the vendor.

You are now ready to begin entering transactions that will be accumulated from this point forward. 1099/CPRS Reporting can be turned on/off at anytime but transaction amounts are only accumulated while turned on. A good reason for using the “Allow Edit of 1099/CPRS Amounts” is if you turn on or setup a vendor’s tax reporting mid-year or after transactions have already been recorded for this vendor. Another reason is if you do not choose the option to “Default 1099/CPRS Amounts” and you forget to record the 1099 amount at document entry time your YTD amounts will be incorrect.

If you need to edit 1099/CPRS amounts and you have this option turned on, open the “A/P 1099/CPRS Amounts” icon in the AP Vendors area and the following screen will open.

You select the vendor, the code and change by period the accumulated amounts. Finally you have the option of either printing on paper your 1099’s (found under the A/P Vendor Reports section).

At Answers Accounting, we have Sage Accpac Certified consultants on staff and ready to assist you. Contact us for more information about our products and solutions at 1 (866) 680-7742 and visit us at www.answersaccounting.com.