30 Mayıs 2012 Çarşamba

BULL TIT

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This past tax season has once againproven that IRS information return 1098-T, which is supposed to provideinformation for claiming the various education tax benefits, is as useful astits on a bull.
Box 1 of the 1098-T is for paymentsreceived “from any source” forqualified tuition and related expenses.  This is the information I need.  However in the years that this form has beenin use I have only seen an entry in this box once – and it was incorrect.  It showed only the payments received directlyfrom the student (actually the student’s parents).
Box 2 is for amounts billed for qualified tuition and relatedexpenses.  This is the box that is alwaysfilled in.  To be honest, I don’t care arat’s hind quarters how much was “billed”. My clients are cash-basis taxpayers – I need to know what was paidduring the calendar year, not what was billed.
Colleges will generally billstudents for the semester beginning in January of the following year at the endof the current year.  So the amount inBox 2 usually includes this amount.  Butparents or students do not always pay this amount until the following year.
In my instructions to clients I askfor not only the Form 1098-T, but alsoall the ‘Bursar’sReports’ for the year”.  Often a student can access his/her financialaccount history online, and I ask parents to provide me with a print-out ofthis report.
Thankfully some colleges and universitieswill provide a supplement to the Form 1098-T mailing that itemizes the variouscharges and payments made for the year by date, which is extremelyhelpful.  But unfortunately not all.
This past tax season I received aForm 1098-T for a student who had graduated in 2011.  Box 1 and Box 2 were both empty, but therewas an amount for scholarships and grants in Box 5.  Upon questioning the taxpayer I discoveredthat there were indeed payments made for qualified tuition and fees in calendaryear 2011.  These payments had beenbilled in 2010, and were included in Box 2 of the 2010 Form 1098-T. 
I further learned that the studentdid not receive any scholarships or grants from anyone in 2010 or 2011.  The amount reported by the school in Box 5was a payment for tuition and fees made via a student loan.  The school really FU-ed – the amount reportedin Box 5 should have been reported in Box 1! As a result I was able to claim one of the tuition tax benefits.  If I had relied on the Form 1098-T I wouldhave claimed nothing.
If the IRS is going to have a Form1098-T with a Box 1 asking for payments made from all sources for the calendaryear then it should require educational institutions issuing the form to includean entry in Box 1.  Why have this box onthe form if it is not required to be used? And, based on the above experience, perhaps the schools should berequired to identify the amounts reported in Box 5 by source somewhere on thereturn.  
Of course I do believe that thereshould be no tuition tax benefits onthe Form 1040.  These benefits should bedistributed as direct student financial aid and administered via the FAFSA.
Thank you for allowing me torant.  Do other tax preparers feel as Ido about the Form 1098-T?
TTFN

THE GAY DIVORCEE

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Thanks to BO’s recent “endorsement” of same-sex marriage the internetis a-BUZZ with the topic.  This includesthe “tax blogosphere”. A few of my fellow tax-bloggers cover the tax aspects of same-sexmarriage extensively. Peter J Reilly, author of the blog “Passive Activities” for FORBES.COM(where I have been a frequent guest-poster), writes frequently on thetopic.  Click here for his latestgay-marriage post. Also Enrolled Agent Jason Dinesen, who writes “Dinesen TaxTimes”.  Jason posts every Monday aboutgay marriage and taxes.  Click here forhis latest related post.  Currently the federal government, and the IRS, does not recognize same-sexmarriages, as per the Defense of Marriage Act. From an income tax point of view I expect most same-sex couples would not be better off if they were offeredthe same filing options as “traditional” married couples.  However there would be potential forsubstantial benefit when it comes to the federal estate tax. I have very few clients who I either know, or suspect, are a gaycouple.  Only one couple would benefitfrom being able to file tax returns as married. With the others, both partners are employed and would probably pay moretax, thanks to the “marriage penalty”, by having to file as married taxpayers. In states that recognize same-sex marriages, and permit gay couples tofile as married, the fact that these taxpayers cannot file the same way federallycauses extra work for the tax preparer, but also generates corresponding additionalincome.  I have not yet had to deal withthis situation in my practice.
I am not opposed to the legal recognition of gay marriage on thefederal or state level.  I am also not anactive advocate.  I would not campaignagainst the issue, nor would I campaign for passage of supportive legislation.  If it happens I would be fine with it - butit is not a priority issue for me.   I expect that I would leave the issue to the individual states, and wouldallow same-sex couples whose tax home is in a state that recognizes themarriage to file federal returns as married couples.          TTFN

WHERE THE FAKAWI?

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Sorry for the lack of non-BUZZ poststhese past weeks – but I have been busy learning QuickBooks (via a 2-day class)and setting up my own and various client companies on the system, dealing withclient and IRS/NJDOT correspondence, and trying to catch up on other non-GDEtax stuff. This week-end (Friday thru Sunday) Iwill be working away on the NJ Property Tax Reimbursement applications (eventhough the June 1st deadline is always extended each year, I do notwant to rely on the State of New Jersey being consistent) and work on the GDextensions for which I have all the necessary information to complete (I wantall such GDEs completed and in the mail by the end of May).   Monday I will take time off to watchthe 12-hour PERRY MASON marathon on the HALLMARK MOVIE CHANNEL. So again – no time for posting. During the last days of May I willbe posting a series of “summer-reruns” of summer-related posts, with updates asappropriate.  The Memorial Day week-end has alwaysbeen the “official” start of summer.  Onewould rent a summer house or cabin from Memorial Day through Labor Day (as Idid with high school and college friends for several years in the mid-1970s –each year the house getting bigger).  Andtelevision’s summer rerun season is already in its second or third week. I will continue to post thetwice-weekly BUZZ. TTFN

"SUMMER" RERUN – SUMMER CAMP AS CHILD CARE

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If both you and your spouse work, orif you are a working single parent, the cost of sending your dependent childunder age 13 to a summer day camp is eligible for the Credit for Child andDependent Care Expenses.
Onlyday camp expenses qualify for the credit. The cost of an overnight/sleepovercamp does not qualify.
If you have one qualifying child youcan claim the credit on up to $3,000.00 in expenses. For two or more qualifyingchildren the maximum is $6,000.00.
The amount of child care expenseseligible for the credit is further limited to the lower earned income of thetaxpayer or spouse. If one spouse earns $50,000.00 and the other $2,500.00,only $2,500.00 of expenses is eligible for the credit.
If one spouse works and the other isdisabled or a full-time student, the non-working spouse is "deemed"to earn $250.00 per month if there is one qualifying child or $500.00 per monthif there is more than one. This applies to only one spouse per month. If bothspouses are full-time students during the same month, only one is"deemed" to earn the $250.00 or $500.00.
The amount of credit allowed dependson your Adjusted Gross Income. If your AGI does not exceed $43,000.00 thecredit ranges from 35% to 21%. The credit is 20% if your AGI is more than$43,000.00.  In most cases, if you aremarried you must file a joint return to be able to claim the credit.
The credit is allowed for adependent who is under age 13. However, you can claim the credit on expensesyou have incurred up to the child's 13th birthday. If your child will turn 13this November you can still claim the credit on any day camp expenses incurredduring the summer.
Day camp costs also qualify forreimbursement under an employer-sponsored "pre-tax" Dependent CareBenefit plan. In most cases you will receive a greater tax benefit by runningthe day camp costs through your employer's "flexible spending"dependent care program than if you claim the credit.
If you will be claiming the crediton payments made for a summer day camp, be sure to get the name, address and Employer Identification Number ofthe camp when registering. You will need this information to complete Form2441, the IRS form used to claim the credit.
{Itis important to get the federal Employer Identification Number of the Day Campif it is a “for-profit” business. You must report this number on the Form 2441- the IRS will disallow the credit if you do not include an ID number. However,again according to Pub 503, “You do not have to show the taxpayeridentification number if the care provider is one of certain tax-exemptorganizations (such as a church or school). In this case, enter “Tax-Exempt” inthe space where the tax form calls for the number. - rdf”}
Some states, such as New York, alsoallow a Child Care Credit on the state income tax return.
TTFN

“SUMMER” RERUN - DEPENDENTS AND INCOME TAX WITHHOLDING

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{The post has been updated to include the 2012standard deduction numbers – rdf}
Oftentimes the cost of preparing a short form for a dependent child with anafter-school or summer job, solely for the purpose of getting a refund of thein-come tax withheld, is more than the amount of the refund.
Beforestarting a job, a student is given a Form W-4 to fill out. Line 7 of the W-4allows an employee to claim exemption from federal and state income taxwithholding, if he/she had no income tax liability for 2011 and does notanticipate earning enough to pay income tax for 2012, by writing the word“EXEMPT” in the box indicated.
Writing“EXEMPT” on the form means that the employer will withhold only FICA (SocialSecurity and Medicare) and any required state unemployment and/or disabilitytaxes from the student’s wages.
For2012, the federal standard deduction for a dependent with a W-2 is the greaterof $950 or the sum of $300 and the dependent's earned income, not to exceed $5,950(plus $1,450 if age 65 or blind). The state amount varies, and may be more ofless than $5,950.
Ifa dependent student with a summer job does not expect to earn more than $5,950during 2012, including up to $300.00 in interest, dividends and capital gains,the child should claim “EXEMPT” on his/her Form W-4. This way he/she will nothave to file a federal income tax return simply to get a refund of the incometax withheld.
TTFN

26 Mayıs 2012 Cumartesi

Tax-evasion deals gain approval from European Commission

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International Tax Services - The European Commission approved agreements that Germany and the U.K. reached with Switzerland regarding tax evaders. The deals would force Swiss banks to tax clients' money and transfer proceeds to the German or U.K. government. "These revised agreements are in full compliance with EU law, and the work on these agreements demonstrated what is possible with cooperation," EU Taxation Commissioner Algirdas Semeta said. To read more click the link. Reuters (4/17) Looking for an experienced and licensed by IRS tax preparer? As always we are available to help. For no obligation free consultation contact us today!
ABA Tax Accounting
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Proposed law would limit delinquent taxpayers' overseas travel

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International Tax Services - A proposed law would give the Internal Revenue Service more latitude in starting a process that would result in a U.S. citizen's passport being revoked or denied if he or she owes a substantial amount in back taxes. There are exceptions under the law, including if the taxpayer is repaying the debt under a payment plan. Forbes (4/24) To read more click here. Looking for an experienced and IRS licensed tax preparer? For no obligation free consultation contact us today!
ABA Tax Accounting
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Start Planning Now for Next Year's Tax Return

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Thetax deadline may have just passed but planning for next year can start now. TheIRS reminds taxpayers that being organized and planning ahead can save time,money and headaches in 2013. Here are eight things you can do now to make nextApril 15 easier.
1.    Adjust your withholding -Why wait another year for a big refund? Now is a good time toreview your withholding and make adjustments for next year, especially if you'dprefer more money in each paycheck this year. If you owed at tax time, perhapsyou'd like next year's tax payment to be smaller. Use IRS's WithholdingCalculator at www.irs.gov orPublication 919, How Do I Adjust My Tax Withholding?2.    Store your return in a safeplace - Putyour 2011 tax return and supporting documents somewhere secure so you'll knowexactly where to find them if you receive an IRS notice and need to refer toyour return. If it is easy to find, you can also use it as a helpful guide fornext year's return.3.    Organize your recordkeeping - Establisha central location where everyone in your household can put tax-related recordsall year long. Anything from a shoebox to a file cabinet works. Just beconsistent to avoid a scramble for misplaced mileage logs or charity receiptscome tax time.4.    Review your paycheck -Make sure your employer is properly withholding and reportingretirement account contributions, health insurance payments, charitable payrolldeductions and other items. These payroll adjustments can make a big differenceon your bottom line. Fixing an error in your paycheck now gets you back ontrack before it becomes a huge hassle.5.    Shop for a tax professionalearly - If youuse a tax professional to help you strategize, plan and make financialdecisions throughout the year, then search now. You'll have more time whenyou're not up against a deadline or anxious for your refund. Choose a taxprofessional wisely. You are ultimately responsible for the accuracy of yourown return regardless of who prepares it. Find tips for choosing a preparer atwww.irs.gov.6.    Prepare to itemize deductions -If your expenses typically fall just below the amount to makeitemizing advantageous, a bit of planning to bundle deductions into 2012 maypay off. An early or extra mortgage payment, pre-deadline property taxpayments, planned donations or strategically paid medical bills could equalsome tax savings. See the Schedule A instructions for expenses you can deductif you're itemizing and then prepare an approach that works best for you.7.    Strategize tuition payments -The American Opportunity Tax Credit, which offsets highereducation expenses, is set to expire after 2012. It may be beneficial to pay2013 tuition in 2012 to take full advantage of this tax credit, up to $2,500,before it expires. For more information, see IRS Publication 970, Tax Benefitsfor Education.8.    Keep up with changes -Find out about tax law changes, helpful tips and IRSannouncements all year by reading ABA Tax Accounting blogs. The ABA Tax issuestips regularly throughout during the tax season and outside the tax season.
 The IRS emphasizes thateach household's financial circumstances are different so it's important tofully consider your specific situation and goals before making large financialdecisions. Looking for anexperienced and licensed by IRS tax preparer? As always we are available tohelp. For no obligation free consultation contact us today!ABA TaxAccountingAbatax81@gmail.comDirect612-282-3200Tollfree 866-936-0430http://abatax81.blogspot.com

Senators Intro Plan to Stop Facebook Co-founder from Avoiding Taxes

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SenatorsCharles Schumer, D-N.Y., and Bob Casey, D-Pa., have unveiled a plan to respond tothose like Facebook co-founder Eduardo Saverin, who recently moved to renouncehis U.S. citizenship, allegedly to avoid taxes on the profits he is expected tocollect from the social networking company’s initial public offering. Read More...Looking for an experienced and licensed by IRS tax preparer? As always we areavailable to help. For no obligation free consultation contact us today!
ABA TaxAccountingAbatax81@gmail.comDirect612-282-3200Tollfree 866-936-0430http://abatax81.blogspot.com

Senate Panel OKs Bill to Ease Small Business Bankruptcies

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Small Businesses Accountant - The Senate Judiciary Committee has approved bipartisan legislation that would modify the Chapter 11 bankruptcy process to help small companies remain in business and preserve jobs. To read more click here. Looking for an experienced tax accountant? We are available to help. For no obligation free consultation contact us today!
ABA Tax Accounting
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23 Mayıs 2012 Çarşamba

IRS Makes Offer in Compromise Program More Flexible

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The Internal Revenue Service today announced another expansion of its "Fresh Start" initiative by offering more flexible terms to its Offer in Compromise (OIC) program that will enable some of the most financially distressed taxpayers to clear up their tax problems and in many cases more quickly than in the past.
"This phase of Fresh Start will assist some taxpayers who have faced the most financial hardship in recent years," said IRS Commissioner Doug Shulman. "It is part of our multiyear effort to help taxpayers who are struggling to make ends meet."

Today’s announcement focuses on the financial analysis used to determine which taxpayers qualify for an OIC. This announcement also enables some taxpayers to resolve their tax problems in as little as two years compared to four or five years in the past.

In certain circumstances, the changes announced today include:
·  Revising the calculation for the taxpayer’s future income. ·  Allowing taxpayers to repay their student loans. ·  Allowing taxpayers to pay state and local delinquent taxes. ·  Expanding the Allowable Living Expense allowance category and amount. In general, an OIC is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. An OIC is generally not accepted if the IRS believes the liability can be paid in full as a lump sum or a through payment agreement. The IRS looks at the taxpayer’s income and assets to make a determination of the taxpayer’s reasonable collection potential. OICs are subject to acceptance on legal requirements.

The IRS recognizes that many taxpayers are still struggling to pay their bills so the agency has been working to put in place common-sense changes to the OIC program to more closely reflect real-world situations.

When the IRS calculates a taxpayer’s reasonable collection potential, it will now look at only one year of future income for offers paid in five or fewer months, down from four years, and two years of future income for offers paid in six to 24 months, down from five years. All offers must be fully paid within 24 months of the date the offer is accepted. The
 Form 656-B,  Offer in Compromise Booklet, and Form 656, Offer in Compromise, has been revised to reflect the changes.

Other changes to the program include narrowed parameters and clarification of when a dissipated asset will be included in the calculation of reasonable collection potential. In addition, equity in income producing assets generally will not be included in the calculation of reasonable collection potential for on-going businesses.

Allowable Living Expenses
The Allowable Living Expense standards are used in cases requiring financial analysis to determine a taxpayer’s ability to pay. The standard allowances provide consistency and fairness in collection determinations by incorporating average expenditures for basic necessities for citizens in similar geographic areas. These standards are used when evaluating installment agreement and offer in compromise requests.

The National Standard miscellaneous allowance has been expanded to include additional items. Taxpayers can use the miscellaneous allowance for expenses such as credit card payments and bank fees and charges.

Guidance has also been clarified to allow payments for loans guaranteed by the federal government for the taxpayer's post-high school education. In addition, payments for delinquent state and local taxes may be allowed based on percentage basis of tax owed to the state and IRS.

This is another in a series of steps to help struggling taxpayers under the Fresh Start initiative.

In 2008, IRS announced lien relief for taxpayers trying to refinance or sell a home. The IRS added new flexibility for taxpayers facing payment or collection problems in 2009. The IRS made changes to lien policies in 2011 and expanded the threshold for small businesses to resolve tax issues through installment agreements. And, earlier this year, the IRS increased the threshold for a streamlined installment agreement allowing individual taxpayers to set up an installment agreement without providing a significant amount of financial information.
As always we are available to help. For no obligation free consultation contact us today! ABA Tax Accounting Amare Berhie, Enrolled Agent Certified QuickBooks ProAdvisor Abatax81@gmail.com Direct 612-282-3200 Toll free 866-936-0430 http://abatax81.blogspot.com www.abataxaccounting.com

Running 32 bit .Net applications on a 64 bit machine

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Just been having a problem trying to get a .Net application running on my 64bit Vista machine.  The app was compiled using the "Any CPU" flag, which means that it can target both 32 or 64 bit machines.  With this flag set, the .Net bootstrap process loads up the appropriate CLR based upon your machine architecture - if you're running a 32 bit OS, then the 32 bit CLR is loaded and the JIT compiler generates 32 bit code.  If you're running a 64 bit OS, then you can guess what happens - 64 bit CLR and 64 bit code.

For most apps, this is probably exactly the behaviour that you want (although do remember that you need to test on both environments).  If there is a reason why you need to target a specific architecture, then you can change the build settings to force either 32 or 64 bit.  Why would you want to force things?  A good reason would be if you are loading up 32 bit native DLLs for some reason (perhaps your database vendor only ships 32 bit client DLLs, for example).  In this case, quite clearly you need to make sure that your app is also running 32 bit - if not, then when launched on a 64 bit OS, it'll throw a BadImageFormatException at the point that it tries to load the native DLL. 

That's all fine, but what if you've been given an app that needs to run in 32 bit mode, but was compiled with the "Any CPU" flag?  If you've got the code then you could recompile, but what if that's not an option?  Turns out that there's a handy tool called corflags.exe which comes with the SDK.  Using this, you can flip the 32 bit flag in the application without requiring access to the source.  For example:

corflags /32BIT+ /Force TheApplication.exe

the /Force flag is needed if the application is strong name signed - if you omit that flag, then it will fail when run against such assemblies.  Obviously, once the bit has been flipped the strong name is no longer valid.  If you've got access to the private key then you can re-sign.  If you don't have the private key and you need to keep the strong name then I'm afraid you're out of luck.

Visual Studio Tests and "The location of the file or directory xxx is not trusted"

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If you've ever downloaded stuff from the internet (from XP SP2 onwards), you'll know that the OS marks the file as un-trusted and that to use it you need to right-click, go to properties and click "Unblock".  If you download a zip and extract it's contents without having unblocked the zip, then you probably also know that every extracted file will also be marked as un-trusted. 

Referencing a file from an un-trusted source within Visual Studio (for example, adding a reference to the latest library that you've just downloaded) will work just fine, but when you try to run your unit tests they will barf with a "location of the file or directory is not trusted" error.

The top tip is to remember to unblock the zip file before doing the extract; that way, all the files that you extract will also be unblocked and the world will be a happy place (assuming that none of them have viruses, trojans etc!)

If you forget, and if you've now got files scattered all over your project such that deleting them and re-extracting is a pain, then here's another option - ZoneStripper is a handy command-line tool that can run recursively over a directory and get rid of the blocks.  Works like a treat.

Weekly digest of interesting stuff

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  • News that the D language that is part of the up-coming Oslo release has been renamed to M.  Wonder what that stands for?
  • Silverlight 2 goes RTM.  Various useful links: 
    • The announcement from Somesegar
    • Information about up-coming Silverlight controls. The model for how these are getting released is worth reading - full source on Codeplex under the MS public licence
    • A whole pile of useful stuff on what's new, what's changed etc. 
    • The release of Expression Blend SP1
  • Changing extensions in IIS 7 - the post is about removing the .svc extension, but the method used works for pretty much any type of URL renaming that you want to perform
  • A Channel9 video discussing the provider model in LINQ.  I've not watched it yet, but Erik Meyer is a smart guy and normally worth watching.  Beware of his shirts though, they are normally pretty shocking!
  • Apple released updates to their MacBook & MacBook Pro lines.  These are nice looking machines, and with bootcamp they will run Vista just fine.  They aren't the cheapest laptops around, but they do compare reasonably well on price with other manufacturers for similar specs / designs.

On Agile

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Following a couple of other posts relating to agile (here & here), I thought I'd give my thoughts on the subject. 

There are numerous books and posts on the subject of Agile - searching for "Agile Development" on Google gives well over 1 million hits.  As someone who is hugely interested in how to improve software development, I've read a good deal of material on the subject (although, being fair, it would only be a fraction of a percent of those Google hits!).  What I've found very interesting is the number of different opinions as to what Agile means - it's pretty hard to find two books on the subject that agree on a definition of the term.

One thing that is for sure - Agile (whatever definition you may have) is no silver bullet.  Just being "Agile" does not guarantee success.  It does not guarantee the early delivery of rock-solid software to delirious customers. It does not guarantee that your staff will become highly motivated software ninjas overnight. Given that, what's all the fuss about?  The fuss is that previous software methodologies have got a woeful delivery record.  I'm not going to quote some specific number here, since there are a ton of research articles available which give differing statistics depending on exactly what is defined as failure.  However, the general range is anything from 30% - 85%.  Even if you take the best number there, it's clearly an unacceptable state for a multi-billion dollar industry.

Given the lack of consistency for what Agile means, and given the proliferation of processes that claim to be Agile (XP, SCRUM, Crystal etc.), what is the best way for you to move forward?  Alas, I don't have a silver bullet here either.  The best I can do is describe the process that I have gone through to get this stuff clear in my head.

The first step is to clearly understand what the key requirements are for your business.  Ignore software, ignore the process, just focus on what matters to the business.  For me, I came up with a single overriding principal:

To make a decent, long term, sustainable profit

I'm guessing that's not particularly contentious - any business for which that isn't a key principal is unlikely to last long.  However on it's own that's not really enough.  So I then pondered what aspects of the business would best support the primary principal.  This gave the following, in no particular order:

  • To create solutions that give the customer the solution that he needs, when he needs it, and at a cost he is happy with
    • Happy customers mean repeat business and referrals, which are the best and most profitable form of sales. Plus I'd much rather be working with a customer who's happy rather than one who's not.

  • To have control over the costs and timescales for each customer project
    • Not having control means that the customer doesn't know how much he is paying or when he's going to receive the goods.  Given that the software is probably only a part of a bigger project, the timescales in particular are critical - without confidence on delivery dates, how is the customer meant to schedule other aspects of the wider project such as training, marketing, manufacturing etc?  In addition, if we don't know when projects are due to complete it makes it very hard to commit to start dates new customers.

  • To have a motivated, skilled team that share the same values
    • Motivated staff take care and pride in their work, which gives rich rewards in terms of the quality of the product.  They also tend to enjoy their work which reduces expensive staff turnover, and just makes the workplace a more enjoyable place to spend what amounts to a significant percentage of your life.

 

From this, I could then extract the aspect of Agile from the mass of books that I've read to provide, in effect, the essence.  These are the areas that I consider important, and why:

  • Accept and embrace change.
    • Anyone who thinks that they can prevent change from occurring during a project of any size is, quite frankly, living on another planet.  Accept that change is essential to enable the software to meet the needs of the customer, and adopt a process that makes change as painless as possible.  The change may be requirements, it may be technical, it may be staffing, but whatever it is, it's going to happen.
  • Develop in short iterations.
    • There's a load of important things about the iterative approach, so I'll expand on this below.
  • Don't attempt up-front detailed design
    • Again, there's lots of empirical evidence that this doesn't provide any benefit.  By all means, do up front high-level architectural design - indeed, for the key structural aspects of the project (scalability, security, disaster recovery etc.), this is pretty much essential; getting those wrong or trying to reverse them into an existing code base can be very expensive and not something the "right click / refactor" is going to help with.  But the low level stuff is best done with the compiler.
  • Make sure that testing is a first class citizen
    • Testing should being as soon as coding begins (indeed, if you want to do TDD, then it starts before the coding).  As far as possible, make the tests automated so that you can frequently run the full test suite.  It's inevitable (regardless of whether you attempt up-front detailed design or not) that, at times, you'll need to refactor parts of the code base to support new functionality.  At times like this, a large test suite gives a great safety net.  In addition, the tests (if well written) also act as a form of executable (and hence up to date) documentation.  Finally, and most importantly, testing as early as possible tends to promote a testable code base and gets quality in there from day one. 
  • Empower your team to use their brains.
    • If you've any sense, you spend a lot of time recruiting the very best staff.  Recognize that, and let them shine.  If they are committed to the business, then trust them to make sane choices and don't try to micro-manage tem.  If they're not committed to the business, politely but firmly point them in the direction of the door.

Expanding on iterations, I think the following aspects are essential:

  • At the start of an iteration, plan in detail what you are going to achieve.  For that plan to have any teeth, it is essential that changes are not allowed during an iteration.  For this reason, iterations should also not be too long - my experience suggests that between 2 and 4 weeks works well.
  • During the iteration planning, ensure that the tasks being worked on are the most important to the project at this moment in time.  Don't do the trivial stuff whilst there are important things to be done (important can either be those items that give most business value, or those items that present the most technical risk)
  • At the end of each iteration, deliver demonstrable, working software.  This keeps the team focused and gives a clear view of progress to date.  In addition if, god forbid, you fail to complete all the development tasks you will at least have a system that the customer could take.  And, since you worked in priority order, it should include most of the stuff that the customer considers important.  Telling the customer that you're not finished is never an easy conversation, but "We're not done, we estimate that we're about 80% of the way there, but here's a system in which all of the following function is complete and ready to go" is a much better chat than "We're not done, we estimate that we're about 80% of the way there.  Sorry, but there's nothing you can take yet because until we've done the other 20% nothing will work"
  • At the end of each iteration, tasks are either done or not done.  It's notoriously hard to determine how much work is left on a task when it's not yet complete (how often have you heard the phrase "it's 80% done", only to then find it takes another 100% of the elapsed time so far to finish?).  In addition, done needs to be done.  Code written, all functionality complete, all tests written and passing.  Anything less is not done, and should hence be deferred to a future iteration.
  • At the end of each iteration, evaluate what has gone well and what has gone badly.   Do more of the good things, and make changes to prevent the bad things from happening again.  I have seen a number of teams running iterations who recognize that they are not getting things done as quickly as they need, and whose response is "ok, we recognize that things aren't going well.  We'll try harder in the next iteration".  Trying harder at something that isn't working is unlikely to yield the results that you want.
  • Don't queue up bugs.  The tasks that you've worked on to date are, by definition, the most important ones.  Bugs mean that they are not finished.  Fix the bugs.  If you don't, then at the end of the project you'll have a pile of important stuff that's not done.  The customer is not going to like that.

The key thing that I've observed with well-run iterations is that they tend to surface problems early in the project.  Pain is going to happen (what - you really think that nothing will go wrong?), and Early Pain is considerably more desirable than Late Pain.  Early Pain means that there's time to take corrective action. Late Pain is what kills projects.

Those are the things that I see as the essence of agile - it's not rocket science, it's just working smarter.  It's understanding that change happens, and making sure that you can handle it.  It's understanding that things go wrong, and making sure that they can be spotted and fixed as early as possible.  It's understanding that you have a hugely talented team, and using them.  It's no silver bullet though.

What else can I add?  Well, there are a few things that spring to mind:

  • Requirements - up-front or iteratively?
  • Contracts - fixed price or T&M?
  • What methodology?  SCRUM?  XP?  Lean?
  • We're not Agile, but want to be - how do we change?
  • My customer doesn't want Agile - what are my options?

This has been a pretty long post, so although I've got things to say on those, I'll leave them for another day.

As a final remark, all of the above is just my opinion.  I've intentionally not put in references to books etc. - for each reference I find that says one thing, I've no doubt you can find a reference that says the opposite.  Such is the nature of our imprecise world.  I hope, however, that this does give some food for thought, and perhaps helps you through your own thought processes around how (or indeed if) to adopt Agile.

I would certainly appreciate any comments that folk might have...

17 Mayıs 2012 Perşembe

What You Need to Know about the Small Business Health Care Tax Credit

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Small Business Tax Accounting - For tax years 2010 through 2013, the maximum credit is 35 percent for small business employers and 25 percent for small tax-exempt employers such as charities. An enhanced version of the credit will be effective beginning Jan. 1, 2014. Additional information about the enhanced version will be added to IRS.gov as it becomes available. In general, on Jan. 1, 2014, the rate will increase to 50 percent and 35 percent, respectively.

Here’s what this means for you. If you pay $50,000 a year toward workers’ health care premiums – and if you qualify for a 15 percent credit, you save … $7,500. If you save $7,500 a year from tax year 2010 through 2013, that’s total savings of $30,000. If, in 2014, you qualify for a slightly larger credit, say 20 percent, your savings go from $7,500 a year to $12,000 a year.

Even if you are a small business employer who did not owe tax during the year, you can carry the credit back or forward to other tax years. Also, since the amount of the health insurance premium payments are more than the total credit, eligible small businesses can still claim a business expense deduction for the premiums in excess of the credit. That’s both a credit and a deduction for employee premium payments.

There is good news for small tax-exempt employers too. The credit is refundable, so even if you have no taxable income, you may be eligible to receive the credit as a refund so long as it does not exceed your income tax withholding and Medicare tax liability.

And finally, if you can benefit from the credit this year but forgot to claim it on your tax return there’s still time to file an amended return. Looking for an experienced and licensed by IRS tax preparer? As always we are available to help. For no obligation free consultation contact us today!
ABA Tax Accounting
Abatax81@gmail.com
Direct 612-282-3200
Toll free 866-936-0430
http://abatax81.blogspot.com

Missed the Income Tax Deadline – IRS Offers Help for Taxpayers

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The IRS has some advice for taxpayers whomissed the tax filing deadline.
  •   Don’t panic but file assoon as possible. If you owe moneythe quicker you file your return, the less penalties and interest you will haveto pay.
  • E-file is still yourbest option.  IRS e-file programsare available for most taxpayers through the extension deadline – October 15,2012.
  •  Pay as much as you areable. Taxpayers who owe tax should pay as much asthey can when they file their tax return, even if it isn’t the total amountdue, and then apply for an installment agreement to pay the remaining balance.
  • Installment Agreementsare available.  Request apayment agreement with the IRS. 
  • Penalties and interestmay be due.  Taxpayers whomissed the filing deadline may be charged a penalty for filing after the duedate. Filing as soon as possible will keep this penalty to a minimum. And, taxpayers who did not pay their entire tax bill by the due date may becharged a late payment penalty. The best way to keep this penalty to a minimumis to pay as much as possible, as soon as possible. Although it cannot waiveinterest charges, the IRS will consider reductions in these penalties if youcan establish a reasonable cause for the late filing and payment.
  • Refunds may bewaiting. Taxpayers should fileas soon as possible to get their refunds. Even if your income is below thenormal filing requirement, you may be entitled to a refund of taxes that werewithheld from your wages, quarterly estimated payments or other specialcredits. You will not be charged any penalties or interest for filing after thedue date, but if your return is not filed within three years you could forfeityour right to the refund. 
Lookingfor an experienced and licensed by IRS tax preparer? As always we are availableto help. For no obligation free consultation contact us today!ABATax AccountingAbatax81@gmail.comDirect612-282-3200Tollfree 866-936-0430http://abatax81.blogspot.com

Proposed law would limit delinquent taxpayers' overseas travel

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International Tax Services - A proposed law would give the Internal Revenue Service more latitude in starting a process that would result in a U.S. citizen's passport being revoked or denied if he or she owes a substantial amount in back taxes. There are exceptions under the law, including if the taxpayer is repaying the debt under a payment plan. Forbes (4/24) To read more click here. Looking for an experienced and IRS licensed tax preparer? For no obligation free consultation contact us today!
ABA Tax Accounting
Abatax81@gmail.com
Direct 612-282-3200
Toll free 866-936-0430
http://abatax81.blogspot.com

Start Planning Now for Next Year's Tax Return

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Thetax deadline may have just passed but planning for next year can start now. TheIRS reminds taxpayers that being organized and planning ahead can save time,money and headaches in 2013. Here are eight things you can do now to make nextApril 15 easier.
1.    Adjust your withholding -Why wait another year for a big refund? Now is a good time toreview your withholding and make adjustments for next year, especially if you'dprefer more money in each paycheck this year. If you owed at tax time, perhapsyou'd like next year's tax payment to be smaller. Use IRS's WithholdingCalculator at www.irs.gov orPublication 919, How Do I Adjust My Tax Withholding?2.    Store your return in a safeplace - Putyour 2011 tax return and supporting documents somewhere secure so you'll knowexactly where to find them if you receive an IRS notice and need to refer toyour return. If it is easy to find, you can also use it as a helpful guide fornext year's return.3.    Organize your recordkeeping - Establisha central location where everyone in your household can put tax-related recordsall year long. Anything from a shoebox to a file cabinet works. Just beconsistent to avoid a scramble for misplaced mileage logs or charity receiptscome tax time.4.    Review your paycheck -Make sure your employer is properly withholding and reportingretirement account contributions, health insurance payments, charitable payrolldeductions and other items. These payroll adjustments can make a big differenceon your bottom line. Fixing an error in your paycheck now gets you back ontrack before it becomes a huge hassle.5.    Shop for a tax professionalearly - If youuse a tax professional to help you strategize, plan and make financialdecisions throughout the year, then search now. You'll have more time whenyou're not up against a deadline or anxious for your refund. Choose a taxprofessional wisely. You are ultimately responsible for the accuracy of yourown return regardless of who prepares it. Find tips for choosing a preparer atwww.irs.gov.6.    Prepare to itemize deductions -If your expenses typically fall just below the amount to makeitemizing advantageous, a bit of planning to bundle deductions into 2012 maypay off. An early or extra mortgage payment, pre-deadline property taxpayments, planned donations or strategically paid medical bills could equalsome tax savings. See the Schedule A instructions for expenses you can deductif you're itemizing and then prepare an approach that works best for you.7.    Strategize tuition payments -The American Opportunity Tax Credit, which offsets highereducation expenses, is set to expire after 2012. It may be beneficial to pay2013 tuition in 2012 to take full advantage of this tax credit, up to $2,500,before it expires. For more information, see IRS Publication 970, Tax Benefitsfor Education.8.    Keep up with changes -Find out about tax law changes, helpful tips and IRSannouncements all year by reading ABA Tax Accounting blogs. The ABA Tax issuestips regularly throughout during the tax season and outside the tax season.
 The IRS emphasizes thateach household's financial circumstances are different so it's important tofully consider your specific situation and goals before making large financialdecisions. Looking for anexperienced and licensed by IRS tax preparer? As always we are available tohelp. For no obligation free consultation contact us today!ABA TaxAccountingAbatax81@gmail.comDirect612-282-3200Tollfree 866-936-0430http://abatax81.blogspot.com

HP Loses in Tax Court to IRS

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Hewlett-Packard lost out to the Internal Revenue Service in a case involving over $190 million in tax refunds that HP has claimed from a foreign tax credit generator. Read more click here... You're Never Alone with ABA Tax Accounting Solutions. Taxes are a fact of personal and business life. The question you face is, how will you minimize the impact of taxes? What kind of expertise do you need to help you achieve your goals? ABA Tax Accounting has answers to both questions, delivered by tax specialists who work proactively in a personal, one-on-one relationship. Whether you need to structure an international transaction, reorganize your business, transfer family property or defer tax on the sale of assets, ABA Tax Accounting provides a wide array of services that cover every aspect of your business and personal finances. For a Free Consultation call or email:
ABA Tax Accounting
Amare Berhie, Senior Tax Advisor
amare@abataxaccounting.com
Direct 612-282-3200
Toll free 866-936-0430
www.abataxaccounting.com


13 Mayıs 2012 Pazar

Proposed law would limit delinquent taxpayers' overseas travel

To contact us Click HERE


International Tax Services - A proposed law would give the Internal Revenue Service more latitude in starting a process that would result in a U.S. citizen's passport being revoked or denied if he or she owes a substantial amount in back taxes. There are exceptions under the law, including if the taxpayer is repaying the debt under a payment plan. Forbes (4/24) To read more click here. Looking for an experienced and IRS licensed tax preparer? For no obligation free consultation contact us today!
ABA Tax Accounting
Abatax81@gmail.com
Direct 612-282-3200
Toll free 866-936-0430
http://abatax81.blogspot.com

Start Planning Now for Next Year's Tax Return

To contact us Click HERE
Thetax deadline may have just passed but planning for next year can start now. TheIRS reminds taxpayers that being organized and planning ahead can save time,money and headaches in 2013. Here are eight things you can do now to make nextApril 15 easier.
1.    Adjust your withholding -Why wait another year for a big refund? Now is a good time toreview your withholding and make adjustments for next year, especially if you'dprefer more money in each paycheck this year. If you owed at tax time, perhapsyou'd like next year's tax payment to be smaller. Use IRS's WithholdingCalculator at www.irs.gov orPublication 919, How Do I Adjust My Tax Withholding?2.    Store your return in a safeplace - Putyour 2011 tax return and supporting documents somewhere secure so you'll knowexactly where to find them if you receive an IRS notice and need to refer toyour return. If it is easy to find, you can also use it as a helpful guide fornext year's return.3.    Organize your recordkeeping - Establisha central location where everyone in your household can put tax-related recordsall year long. Anything from a shoebox to a file cabinet works. Just beconsistent to avoid a scramble for misplaced mileage logs or charity receiptscome tax time.4.    Review your paycheck -Make sure your employer is properly withholding and reportingretirement account contributions, health insurance payments, charitable payrolldeductions and other items. These payroll adjustments can make a big differenceon your bottom line. Fixing an error in your paycheck now gets you back ontrack before it becomes a huge hassle.5.    Shop for a tax professionalearly - If youuse a tax professional to help you strategize, plan and make financialdecisions throughout the year, then search now. You'll have more time whenyou're not up against a deadline or anxious for your refund. Choose a taxprofessional wisely. You are ultimately responsible for the accuracy of yourown return regardless of who prepares it. Find tips for choosing a preparer atwww.irs.gov.6.    Prepare to itemize deductions -If your expenses typically fall just below the amount to makeitemizing advantageous, a bit of planning to bundle deductions into 2012 maypay off. An early or extra mortgage payment, pre-deadline property taxpayments, planned donations or strategically paid medical bills could equalsome tax savings. See the Schedule A instructions for expenses you can deductif you're itemizing and then prepare an approach that works best for you.7.    Strategize tuition payments -The American Opportunity Tax Credit, which offsets highereducation expenses, is set to expire after 2012. It may be beneficial to pay2013 tuition in 2012 to take full advantage of this tax credit, up to $2,500,before it expires. For more information, see IRS Publication 970, Tax Benefitsfor Education.8.    Keep up with changes -Find out about tax law changes, helpful tips and IRSannouncements all year by reading ABA Tax Accounting blogs. The ABA Tax issuestips regularly throughout during the tax season and outside the tax season.
 The IRS emphasizes thateach household's financial circumstances are different so it's important tofully consider your specific situation and goals before making large financialdecisions. Looking for anexperienced and licensed by IRS tax preparer? As always we are available tohelp. For no obligation free consultation contact us today!ABA TaxAccountingAbatax81@gmail.comDirect612-282-3200Tollfree 866-936-0430http://abatax81.blogspot.com