FAQs

How long should I keep my business records?

The following holding periods are suggestion only, federal, state and institution rules and regulations may apply.

ACCOUNTING RECORDS RETENTION PERIOD
Accounts payable 7 years
Accounts receivable 7 years
Audit Reports Permanent
Chart of accounts Permanent
Depreciation schedules Permanent
Expense records 7 years
Financial statements (annual) Permanent
Fixed asset purchases Permanent
General Ledger Permanent
Inventory records 7 years
Loan payment schedules 7 years
Purchase orders (1 copy) 7 years
Sales records 7 years
Tax returns Permanent
BANK RECORDS
Bank reconciliations 2 years
Bank statements 7 years
Canceled checks 7 years
Electronic payment records 7 years
CORPORATE RECORDS
Board Permanent
Business licenses Permanent
Contracts – major Permanent
Contracts – minor Life + 4 years
Insurance policies Life + 3 years
Leases/mortgages Permanent
Patents/trademarks Permanent
Shareholder records Permanent
Stock registers Permanent
Stock transactions Permanent
EMPLOYEE RECORDS
Benefit plans Permanent
Employee files (ex-employees) 7 years
Employment applications 3 years
Employment taxes 7 years
Payroll records 7 years
Pension/profit sharing plans Permanent
REAL PROPERTY RECORDS
Construction records Permanent
Leasehold improvements Permanent
Lease payment records Life + 4 years
Real estate purchases Permanent

What type or form of business entity should I choose for my business?

The short answer is, it depends. Things to consider, when choosing the type or form of business entity:

  • What is the business and how does it operate – is it an operating business or holding assets?
  • What is the purpose of the business- is it your primary business, or is the business set up for a special purpose?
  • What type of assets are held in the business?
  • Does the business need to retain and build capital and what are its cash needs?
  • Is it an existing business or a startup?
  • What are the projections or expected income over the next 3 to 5 years?

Knowing the answer to these questions will be helpful in choosing the most advantageous entity type for your business. Please contact us and we can assist you in making this decision.

How does the Affordable Care Act (ACA) affect me as an individual?

Beginning in 2014, ACA requires individuals to maintain minimum essential health insurance coverage with some exceptions.

What is Minimum Essential Health Insurance Coverage?

  • Eligible employer-sponsored coverage;
  • Individual coverage;
  • Medicare and Medicaid;
  • State Children’s Health Insurance Program (CHIP);
  • TRICARE;
  • Department of Veterans Affairs health care program;
  • Peace Corps program.

 

How do I know if my employer’s plan meets Minimum Essential Coverage?

Every employer that provides minimum essential coverage must provide this information to each primary insured person.

What individuals are exempt from the individual mandate?

  • Individuals with qualifying religious exemptions;
  • Individuals whose household income is less than the filing threshold for federal income tax purposes ($10,000 single taxpayer; $16,100 married-filing-joint taxpayer);
  • Individuals whose required contribution for self-only coverage exceeds 8% of household income.

 

What is the penalty?

2014:

The greater of:

  • $95 for each taxpayer and any dependents, or
  • 1% of applicable income (amount household income exceeds the filing threshold).

2015:

The greater of:

  • $325 for each taxpayer and any dependents, or
  • 2% of applicable income (amount household income exceeds the filing threshold).

2016:

The greater of:

  • $695 for each taxpayer and any dependents, or
  • 2.5% of applicable income (amount household income exceeds the filing threshold).

 

When is the penalty assessed?

The individual mandate penalty will be assessed on the individual’s 2014 Form 1040.

Does the government help me pay the insurance premiums in the Health Insurance Marketplace?

There is a Premium Tax Credit available to people who:

  • Buy health insurance through the Marketplace;
  • Ineligible for coverage through an employer or government plan;
  • File a joint return, if married;
  • Cannot be claimed as a dependent by another person; and
  • Are within certain income limits:
    • Individuals up to $45,960;
    • Family of two up to $62,040;
    • Family of four up to $94,200.

 

How do I get the Premium Tax Credit?

  • Get it Now: Have some or all of the estimated credit paid in advance directly to your insurance company;
  • Get it Later: Wait to get all of the credit when you file your 2014 tax return in 2015.

What do I as a business owner need to know about the Affordable Care Act (ACA)?

The ACA has several key provisions for businesses, such as:

Business with Fewer than 25 Employees:

  • Not required to provide health insurance to employees;
  • Must provide notice to employees about the availability of the on-line state health-insurance exchanges;
  • Potential tax credits for employers that do provide health insurance to employees.

Business with 50 or Fewer Full-Time-Equivalent (FTE) Employees:

  • Not required to provide health insurance to employees;
  • Must provide notice to employees about the availability of the on-line state health-insurance exchanges;
  • Eligible to purchase insurance through Small Business Health Options Program (SHOP) Exchanges.

Business with 50 or More Full-Time Equivalent (FTE) Employees:

  • Must provide notice to employees about the availability of the on-line state health-insurance exchanges;

Delayed Until Further Notice:

  • Must offer affordable health insurance that provides a minimum level of coverage to substantially all full-time-equivalent employees;
  • If affordable health insurance is not provided, employer may be responsible for an employer shared responsibility payment.

What is a FTE?

An employee who works an average of 30 or more hours per week.

What are some tax “things” I should know about for the individual?

Several common tax “things” to be aware of include:

  • The FICA wage base for 2019 and 2018 is $132,900 and 128,400, respectively
  • The standard deduction amounts for 2019 and 2018 are as follows:
    • Married filing joint – $24,400 and $24,000
    • Head of household – $18,350 and $18,000
    • Single – $12,200 and $12,000
    • An additional $1,300 standard deduction is available for taxpayers who are blind or age 65 or older. In 2019 single taxpayers receive a $1,600 additional standard deduction.
    • The business mileage rate for 2019 and 2018 is 58 cents and 54.5 cents a mile, respectively.
    • Per diem reimbursement for travel is found on the GSA.gov website and is now based on zip codes. Post September 30, 2018, the per diem rates for Fargo is $94 a day for lodging and $55 for meals and incidentals. For Minneapolis it is between $151 and $135 a day for lodging depending on time of year and $76 a day for meals.

What are the depreciation rules for fixed asset purchases?

After 2019, the Section 179 limit is $1,000,000, for qualified property. 100% Bonus depreciation expires December 31, 2022. These deductions may be limited for state income tax purposes.

What are the estate and gift exemptions for 2014?

The estate tax exemption is $11.4 and $11.18 million for 2019 and 2018 respectively. The annual exclusion for gifts is $15,000 for both 2019 and 2018.

How much is my business worth?

The value of a business is often determined by the expected future cash flows. Attributes that also help determine the value of a business include:

  • History of cash flows
  • Growth potential
  • The age of the business
  • Market share
  • Barriers to entry
  • Competition
  • Location
  • Risk of the industry
  • Financial condition
  • Regulatory environment

Do I need an audit?

Audits are generally requested by lenders, key stakeholders, grantors, investors, regulatory requirement, and by organizational documents.

Audits provides a level of assurance that the financial statements and related notes are fairly stated. The auditor performs various audit tests, based on audit risk assessments of the entity, in order to issue an opinion on the financial statements.

Other reduced levels of assurance on financial statements are reviewed financial statements, with limited assurance and the compilation with the lowest level of assurance.

Reviewed financial statements, including notes to the financial statements are tested using analytic tests and inquiry, and provides limited assurance.

Compiled financial statements can include notes to the financial statements or can be omitted, and have no assurance.