Bank of America Mortgage Reductions: Are You One of 200,000 Who Qualify?

May 14th, 2012

A new firestorm has erupted across the country as people scramble to find out who is eligible for a billion dollar mortgage bailout.  Five days ago, Bank of America announced they will be forgiving up to $150,000 in mortgage principal for over 200,000 individuals.  This eleven-billion-dollar deal is the direct result of the February “Robo-signing” settlement between five of the nation’s largest banks, 49 state Attorney Generals, and the U.S. Justice Department.

Many people are already up in arms because this sweeping and unprecedented mortgage principal reduction seems to apply only to people who appear to have been less than fiscally responsible. (You must have been delinquent on your mortgage by 60 days before January 31, 2012.) However, this might not have been caused by negligence; it could have been a medical emergency, a job loss or sudden layoff.  Nevertheless, it will be very good news for 200,000 people who will have their monthly mortgage payments reduced to 25% of their gross (monthly) income.

Five thousand letters have already been sent and 6,500 more will be issued this week with the rest of the 200,000 being staggered over the summer until they have all gone.  A Warning, however:  if you simply toss the letter, you will forfeit your right to apply for this relief.

So the burning question is:  who are the individuals who qualify?

  • those who were more than 60 days behind on their mortgages as of January 31, 2012;
  • those whose houses are “underwater” or are worth less than their mortgages;
  • those whose monthly mortgage payments are more than 25% of their (monthly) gross income;
  • those who have the documentation to prove that they can’t make their current payments
  • those who have the documentation to prove that when their mortages are modified and reduced in this manner, they will have the ability to make the payments;
  • and those whose loans are owned by Bank of America or serviced by Bank of America (for an investor who is allowing the modifications.)

So where does Big E-Z Bookkeeping come into play?  You guessed it!  Documentation.  How else are you going to prove that you can’t afford your monthly mortgage payments?  And how are you going to prove that if your mortgage is reduced, you will be able to pay it every month?  Even though you’ve already done your taxes for 2011,  you may not have recorded your transactions month-by-month.  But you can still download last year’s 2011 Big E-Z Bookkeeping System.   The reports it prints out will help you apply for this mortgage principal reduction.   And remember Big E-Z comes with support for an entire year.

Small is Beautiful: Accounting Software and Gardening

May 2nd, 2012

Small is Beautiful started out years ago as a book by E.F.Schumacher about economics, scale,  and sustainability.   Nowadays it’s helped spawn a movement to buy local, to eat local, to support small farmers and to promote local, small businesses. I’ve been thinking that small is beautiful when it comes to accounting software, too.    Last week something simple happened that opened my eyes again to the truth of this concept.

If you are like me,  you love to spend  time in the garden. While my flowers are pretty,  my lawn is another story. In my quest to improve my lawn,  I asked a few people what I should do. Everyone of them told me to buy fertilizer at a place like Home Depot and use a spreader following the instructions on the bag for its setting. When I heard the same thing from three or more people,  it finally sank in that they must be right.

So I bought the spreader and an organic  fertilizer and tried to use it,  but it always left stripes in the grass. I have to confess,  I didn’t even notice the stripes on my lawn until a week later. Pretty embarrassing , wouldn’t you say? Anyway, one day I had the idea to use one of those small, handheld spreaders for my fertilizer—the ones that people use to spread grass seed around? It’s red and lightweight and has settings on it. Well,  needless to say, this worked like a charm. No more stripes!

That made me think:  how often do we go with what people tell us? Surely they mean no harm. How many times have people recommended the leading accounting software programs like Quicken or QuickBooks for people who could have easily purchased a smaller, leaner program that fits their needs better? The Big E-Z Bookkeeping System is that small, handheld spreader for those of us who don’t need, or don’t know how,  to use the big one. Try Big E-Z and let me know if it handles your biggest bookkeeping challenge.

Are You Wasting Time on a Complicated Bookkeeping System?

April 26th, 2012

Have you ever invested hours doing something only to find out it was absolutely unnecessary?  And have you ever done this with your financial records—spent hours putting in data, getting the right forms filled out, only to find out you neglected an obvious shortcut?  Or to make matters worse, you discover—late in the game—that you have inadvertently overlooked a very streamlined and much easier entire financial system!

Last week I saw Murphy’s Law unfold before my very eyes.  I had lost my driver’s license, so yesterday I went to the Secretary of State office to apply for a duplicate.  As I pulled into the parking lot,  I noticed a strange thing:  two very irate people  fighting over the same prime parking spot. They both had their cars in a corner of the same parking spot facing each other. This face-to-face confrontation wouldn’t have been so very weird—I mean people get upset about things like parking spots all the time—EXCEPT that I easily found a spot about 25 feet away.  And there were plenty of other spots close by, too.  I walked into the Secretary of State office wondering how this would end. An hour later, I came out and noticed the spot was empty again. I shook my head and laughed, “That was a total waste of time for those folks.”

Don’t make that mistake with your financial records.   Check out the easiest bookkeeping solution I know of,  Big E-Z Bookkeeping, BEFORE you invest hours in a more complicated one.

Microsoft discontinues support for Windows XP and Vista.

April 20th, 2012

It’s official.  As of April 10, 2012,  Microsoft is ending mainstream support for Vista.  No one really loved Vista, so no one’s really complaining. Customers will still have the ability to access security updates, but they will no longer get free bug fixes or patches without a commercial support contract.  Technically, this is called “extended support”.   And this is the only kind of support still available to XP users.  Mainstream support ended three years ago for both XP and Microsoft Office 2003 and this limited  extended support will officially end for XP in 2014,  (Vista in 2017).   Support is ending despite the fact that more than 60% of all operating systems worldwide are still XPs.

So, what does this mean for Big E-Z Bookkeeping customers?  It means your XP computers and laptops which have Office 2003 will be a lot more vulnerable to hacking in just a year and a half when Microsoft  finally pulls the plug on even the minimal “extended support”.  Many of you are even now using our newest 2012 software on XP computers.  That’s why we have continued to offer our software on both platforms.  But you might want to rethink this.

For those of you who purchased your Big E-Z software quite a while ago, and don’t have a back-up CD or a license code, you will need to purchase the newest Big E-Z version (2012) which always comes now with a backup CD.  Take a minute to check out the big improvements over your old version by clicking on our great new features for 2012. You will be delighted, I promise you!

However, for all of you who purchased your Big E-Z software more recently—in 2011 or 2012—and have decided to change your computer, re-installing your Big E-Z software will be easy.  The CD which you received in the post when you first purchased your software has a choice on it:   MS Office ‘03 or MS Office ‘07/’10.    All you need is your CD, your license key (from your order email which you should have typed in on your Settings Page of your software) and your data files.  And you’re ready to re-install.  Let us know if you have lost your license key or if we can help in any way.

Relax: No More Scrambling at Tax Time.

April 15th, 2012

How many of you just finished your taxes and found yourselves scrambling to get all of your 2011 financial records in order in time? (For those of you who haven’t finished, the filing deadline has been extended until Tuesday April 17th). I am here to tell you that keeping your financial records up-to-date is so much better than always being behind the 8 ball. The benefits can be wonderful—like knowing how much money you have in the checking account at any given moment. Yes, you can go online and check your balances on a daily basis but knowing where you spent the money so far this month and knowing your records are accurate is a great feeling. It also makes effective budgeting a real possibility. And reconciling your checkbook is much easier when your books are up-to-date. When you only have a few checks a day it is easy to postpone updating the account, but I recommend weekly forays into the jungle of “the accounts” or at the minimum, once-a-month—each time you get your bank statement.

Here’s how I do it. Let’s say I haven’t entered anything for a month. I pull out my bank statement and enter all my deposits first on my Big E-Z Deposit spreadsheet and then distribute them across the Main Income Categories; then I enter all my checks (and debit card entries) on the Checks spreadsheet. I also distribute them across the Main Expense Categories and Subcategories. Then I enter all my charge or credit card expenditures that haven’t been paid for with real money yet. Once they get paid, they get moved over to the Checks spreadsheet.  In the meantime, I realize I forgot to make my budget for the year, so I go back to Period One (January), click on the Summary, then the Budget Calculator, and put in a monthly estimate for each category.   But I relax,  knowing I can change this as I go through the year if my estimates were way too idealistic to start with.

Relax: that’s the key.  If I keep my financial records up-to-date, with Big E-Z Bookkeeping, I can relax when it comes to Tax Time.

eBay Sales: How to Record eBay and PayPal Fees as Business Deductions

April 5th, 2012

Just last week I discovered that one of my friends (who is a top-rated eBay seller) hasn’t really found a software program which can track her eBay and PayPal fees.  And her fees are numerous.  They include listing fees (insertion fees), final value fees (when an item sells) and listing upgrade fees (when you add a picture or a new description), not to mention the PayPal payment and shipping fees.

Are you having trouble recording the many eBay and PayPal fees on your bookkeeping software program?

People used to dismiss eBay and Craig’s List sales as simply online garage sales.   Some people even used to claim that whatever you sold used on eBay, for less than the original retail price, was not subject to income tax. Almost everyone, even eBay, agrees this is just an urban legend—it is simply not true.  Two years ago,  Adriana Fabiana Orellana, herself an employee of the IRS, was taken to court by the IRS for not having reported over $40,000 of eBay income. She had actually made over 7,000 eBay transactions over the course of two years.  The judge ruled that her activities were more than just a hobby, and she really did owe more than $15,000 in back taxes.  Here is a clear explanation of what constitutes a hobby versus a business.

The good news is if you file a Schedule C for your eBay business, and report your income, you can also deduct all those fees as business expenses.  But to do that, you have to keep track of them.  Anyone who has ever tried to enter even PayPal transactions in some of the popular accounting software programs, like Quick Books,  knows it is like trying to fit a square peg in a round hole. It’s cumbersome at best.

In the new 2012 Big E-Z Bookkeeping System,  we have made it easy for you. You can record the (gross) sale amount under a (main) income category, then place a “P” for PayPal or a “G” if you use the Google shopping cart under column AF and the total fees they  deducted under column AI. (If you want to see each fee broken down,  then you can use the subcategory section to do this;  see the next paragraph). This makes for a nice neat set of books.  The remainder is left in the account until you transfer it out. I’ve even made a video tutorial just to tell you how to handle your PayPal transactions and fees.

What is nice about doing it this way is the Account Balance Tracker will tally up all your shopping cart fees so you will see at a glance what it is costing you to use these shopping carts. You’ll also see how much money is available to you from shopping cart sales.

I’d like to know if you have found an easier way to track these types of sales and fees.  I would love to hear your response.  And by the way, Big E-Z is now for sale on eBay!

Robo-signing? Now I’ve heard everything!

March 22nd, 2012

Robo-signing?  Now I’ve heard everything!   I have been signing documents for decades. As the controller, office manager and bookkeeper for various companies, I have been asked to sign all kinds of forms, letters and checks. I used to sign so many checks that I purposely shortened my signature to save time. (I love finding short cuts in everyday mundane tasks).  I guess I come from a time and place where your signature actually means something like “You can trust what I’m saying because I signed it” or “Yes, I agree to pay my mortgage because my signature is on it” or “I signed it; now you’ve got my word.”

Now fast forward to March 13, 2012 and a reporter from the New York Times writes that there is now convincing evidence that the foreclosure process was “deeply tainted by sloppy recordkeeping, cut corners and possible fraud, epitomized by high-profile cases of “robo-signing’’ — cases in which foreclosures took place based on forged or unreviewed documents.”   And because of this, five of the nation’s biggest banks including Wells Fargo and Bank of America, have just agreed to a $26 billion settlement to provide relief to families facing foreclosure.  This is tantamount to their admitting that they knowingly participated in this type of fraud.  These are bank employees and notaries public knowingly putting their signatures on improper papers to say “Yes. This is correct and you have my word on it!”

How does that happen in the business world today?  Where are their scruples? Who is teaching people right from wrong? In this day and age of widespread fraud and corruption, business leaders and investors are looking for accounting integrity, record keeping transparency, and tight auditing trails.

By the way, the Big E-Z Bookkeeping System has audit trails and built-in controls all the way through.  You have my signature on it!

When Should A Small Business Issue a Press Release?

March 14th, 2012

Have any of you ever toyed with the idea of putting out a press release?  They’re not hard to do.  There are standard formats to follow and there is even a company that will send them out for you for free (PRLog).   A Press Release is useful if you have something you want to announce, like a new product, or an event coming up, or something that has happened with your company which you want people to know about.  But it’s important that your topic is newsworthy, or busy editors and reporters will simply delete it.

In my case, I wanted people to know that I am offering a free budgeting tool called the Big E-Z Cash&Charges Expense Tracker.  So last week I put out a Press Release.   I thought I would post it on my blog so my customers and visitors to my website can also see it.

For immediate release

Michigan Bookkeeper Wants to Help People Get Control of their Finances with Free Budgeting Software

Get free budgeting software for a limited time from Big E-Z Bookkeeping Software. This pre-formatted Excel Spreadsheet helps individuals and small business track spending and easily balance their budgets.

PRLog (Press Release)Mar 07, 2012 -
Livonia, Michigan — Michelle Carley, owner of Big E-Z Bookkeeping Company,  for a limited time is offering a free budgeting tool designed to help young families, students, and small businesses track expenses. This pre-formatted, ready-to-use Excel spreadsheet, called the Cash&Charges Expense Tracker, is adapted from the more comprehensive Big E-Z Bookkeeping System. This Excel-based spreadsheet automatically calculates expenses to help users track spending.

Simply enter the amount of money which you have allocated for a single event or a semester’s expenses, enter your budgeted amounts, then enter in your actual expenses.  As each week goes by, watch the spreadsheet automatically tally the difference between what you have budgeted and what you are actually spending.

“Due to the current economic climate, most Americans are trying to be more careful how they spend their money, but they don’t know how to do it,” says Michelle Carley, owner of the Big E-Z Bookkeeping System and an experienced bookkeeper with 25 years working in the field.  A few years after she first launched her own small business, her Big E-Z Bookkeeping won The Most Needed Product of the Year award from the National Association of Women Business Owners.

“I can’t tell you how many times I hear of young people today who have nothing to show for all their hard-earned money.  Money flows through their hands like water. Obviously they are not learning to track their spending.”  She illustrated this by mentioning that a friend’s daughter, a college freshman, had accidentally spent $1000 on i-Tunes her first semester in college. She added, “This free spreadsheet is very useful for helping college students or young families learn how to manage their money.”

“Big E-Z’s free expense-tracking spreadsheet is ideal for reining in out-of-control spending in your personal life or in your small business”,  Carley remarked, “a habit that reflects the out-of-control spending on the national level as well. The only way I know to get control of a problem like this is to shine a light on it. This is true for any problem not just a financial one.”

“Do you know what a ‘creeper” is?’ she asked.  ”It’s a term medical doctors use for someone who unknowingly gains one or two pounds a year.   Some families I know have fallen into debt the same way. They just haven’t tracked their expenses enough to see the patterns. This free software is designed to do just that: help people see exactly where their money goes. It will shine a light on their expenses and their spending will be like a deer caught in headlights.”

This easy-to-use, pre-formatted Excel-based spreadsheet is ideal for small businesses or individuals needing to budget and track the expenses of a single event, such as a wedding, family reunion, or an annual trip. It’s also great for college or grad students on tight budgets or families trying to figure out where they can cut unnecessary spending.  ”Staying on top of spending will save a lot of grief down the road,” says Carley.  To access this free spreadsheet and expense tracking tool, go to the Big E-Z Bookkeeping website at www.bigez.com to download this budgeting tool and the accompanying How to Use the Cash&Charges Expense Tracker YouTube video.”

###

Six Easy Tips to Get Organized for Tax Time Especially For Brand New Small Business Owners

March 4th, 2012

I have noticed that some brand new small business owners are really lost when it comes to organizing their finances: setting up their books, tracking their expenses, or even setting up a checking account.  So here are six easy and practical steps to set up your Income and Expense Categories so they will match your Tax Categories.

First, get out a piece of lined paper. Allow about 25-30 rows for your MAIN income and expense categories and another 50-100 SUBCATEGORIES specific to your type of business. Place these categories into two columns, one for Income and one for Expenses.  You will want to keep this list for years to come, in case you need to tweak it,  so place it in a clear plastic sleeve and write SAVE over it so it doesn’t get tossed.

Now,  follow these tips to help you get organized for next year’s tax time, because it’s too late for this one! Always start at the end. Determine what expenses and sources of income you need to track.  Specifically, what categories will you need year-end amounts for?

1. Set up your MAIN income and expense categories. Small business expense categories can be found on Schedule “C”.  A quick glance at “Schedule C” will give you a startup list of Expense categories, some of which you may choose to use when you set up yours.  These include categories such as Advertising, Contract Labor,   Legal and Professional Services,  Repairs & Maintenance, Travel, Meals, & Entertainment.  Go over them to see those which you will use and those which you won’t.  Think over your business to make sure and jot them down.   (If you already own my bookkeeping software, Big E-Z Bookkeeping, I have included a suggested list of categories for Businesses, Non-Profits, and Personal on the Settings Tab.)

2. Set up your Sales tax and related subcategories. (If not applicable, skip to the next step). If you are like most businesses, you will need to track sales tax.  (If you aren’t sure, determine if you need to track sales tax by contacting the office in your state which regulates Sales and Use Tax. Break up your income into taxable and non-taxable categories like resale, interstate commerce, and exempt services, to name a few, and jot them down.

3. Break down your Income from donors.  (If not applicable, skip to the next step). If donors to your non-profit need a receipt of their tax-deductible donations, now is the time to start tracking this data, so that by January 31you can give them  a yearly statement of monies received for their tax returns.  Figure out what data you will need and jot it down.

4.  Track your payments to Independent contractors (W-2s and 1099 MISC). (If not applicable, skip to the next step). If you have independent contractors—or even household help—and you pay them more than $600 each during the year,  you will need to issue a 1099-MISC for them.  Now is the time to set up columns (subcategories on our Big E-Z system) with their names, addresses, and social security numbers so you can start tracking all your 1099 payments throughout the year.

5. If you need to track both income and expenses for any given subcategory, now is also the time to set up Cost Centers.  (If not applicable, skip to the next step).  Let’s say you have Rental Properties. Rental Income could be the MAIN category and Property A and Property B would be the SUBCATEGORIES.   Expenses associated with your Rental Properties could have several Main Categories such as Gas, Electric, Water, Repairs, Improvements,  Property Tax, Lawn Care, and so forth. Each Main Expense Category could then have the same Subcategories labeled Property A or B.    This way you could see the net profit for each individual property by tracking both income and expenses on a monthly basis.  Another example but for a personal use of the Big E-Z Bookkeeping Software would be:  SSI for a disabled individual still living at home. You could handle the monthly SSI income as well as the different subcategories of SSI expenses and you could see a net balance month-by-month.

6. Make sure you have a paper backup.  Think about which MAIN categories you will have paper receipts for and track them with envelopes with the same category names. For example,  you can use an envelope for Utilities and place all of your paid receipts for the year into it. These envelopes should be bound in a spiral binder so everything for one year is together. This will serve as a paper trail in the case of an audit.  Now let whichever well-structured system you have chosen accumulate the specific category totals you will need for tax time.  Keep in mind the system you use should have checks and balances in place to catch errors.  And it is a must that you reconcile all your accounts to prove their accuracy. The Big E-Z Bookkeeping System is one of those accounts.  Contact us at www.bigez.com to read our blogs or to download a free Cash&Charges Expense Tracker which will also function as a free trial of the way our system operates.  We also have free YouTube video tutorials such as “How to Set Up a Cost Center” or “How to Record Sales Tax”.

Checks and Balances in the Big E-Z Bookkeeping Software

February 26th, 2012

I would only use an Excel spreadsheet for my bookkeeping IF I knew that controls were in place to be sure my recordkeeping was accurate. What do I mean? I’ll explain.

People in the bookkeeping and accounting field understand this concept. A system of checks and balances must be in place for it to function accurately. Double-checks must be there. There are three double-checks in the Big E-Z Bookkeeping System and I’ll show you what they are.

First of all the Big E-Z System has always had a bank reconciliation area. This is to prove the checkbook matches what the bank says.Why should anyone reconcile?  Because banks make mistakes too. We’ve made this process as simple and as streamlined as possible. I actually find this the fun part of bookkeeping unless I don’t reconcile the first time around. But then I always reconcile when I go back through all the items again.

Next, many people don’t know this, but in the monthly Income & Expenses area of Big E-Z,  if you scroll down to the bottom of the page, you will see our exclusive Balancing Items Area (highlighted in the 3-minute How to Track Sales Tax YouTube Video). Here’s where you can see that all of the income and expenses you entered into the system are in balance between the checkbook and non checkbook items.  How we do it is a trade secret!

Finally, we have another exclusive feature, our Account Balance Tracker. This is where you can reconcile all of your other accounts like savings, investments, credit cards, and so forth.  Why?  So you don’t miss anything—especially expenses—on your tax return.

I would not trust just any spreadsheet to do my bookkeeping, without checks and balances,  but I do trust the Big E-Z Bookkeeping System—and you can too!