Volume 39 September 2004

Transcription

1 OSU OKLAHOMA COOPERATIVE EXTENSION SERVICE Volume 39 September 2004 In this newsletter: What is New in Quicken 2005? 2002 Census Data Provides Agricultural Insights Women in Agriculture Conferences Scheduled Fall Tax Review How to Record a Loan When You are the Lender Other Resource Materials Instructions are written for Quicken Deluxe 2004 users. However, most instructions can be adapted for previous versions of Quicken. Starting in the next issue we will use Quicken Deluxe Lori J. Shipman, Extension Associate Damona Doye, Extension Economist 529 Agricultural Hall Stillwater, OK What is New in Quicken 2005? Quicken 2005 is now available. As in recent years, improvements are in whistles and bells no major overhauls. Here s a quick look at some updates that you might find useful. A neat addition to transactions is the ability to add a note or flag by rightclicking on a transaction. Choose Notes and flag and a window appears that allows you to type in a note for later reference. Or, you can add a note and flag the transaction for follow-up with one of five colors. The flag appears under the date of the transaction in the register. If you need to be reminded to do something with this transaction, you can select a date to be alerted for follow-up. The note or flag can later be deleted. Another new transaction feature is the ability to Undo delete should you accidentally delete a transaction. Right click in the check register and select Undo delete. Also new in the check register is that for a given payee, the most recently used category will appear at the top of the category drop-down menu. If you download transactions, you may have noticed that the payee name may be convoluted such as Point of Sale Withdrawal Hometown Co-op. When the transaction is downloaded, part of the actual payee name is not visible. Quicken 2005 allows you to rename the transaction to Hometown Co-op with Quicken retaining the renaming rule for future transaction downloads. Payee names for online payments cannot be renamed. If you export data from reports to Excel, you will like the option in Report windows to click on Export Data and choose To Excel compatible format. The file is still saved as a.txt file, so when you open the file in Excel, you must choose Text files or All files at the Files of type prompt. The category list has been a part of Quicken since its inception. Now it is easier to adapt it to your needs. You can delete several categories at once by highlighting the categories (use the Ctrl key and click on selection), then right click and choose Delete. You can more easily merge categories that are too similar to warrant individual status. For instance, if you want to merge Entertainment and Recreation, highlight both using the Ctrl key and clicking with the mouse. Then, right click and select Merge. Choose the name you want to use, click on Delete unused selected categories. Finally, you can hide categories in the category list to exclude them from the default list and reports. The Year-End Copy feature is now a combination of the old archive and start new year choices. You determine what will appear in your current file and what will be archived to a new file in one step. Backup has a new addition. You can choose to add a date to the file name of your backup to help identify the latest backup file. This is a nice addition,

2 Page 2 particularly for backups onto CD-ROM. Quicken 2005 is a transition version. In Quicken 2004, users were advised that the QIF format used to import or export transactions, data, or lists was getting outdated. You can still import and export QIF files, but will notice that you cannot select checking, savings, 401(k), or other brokerage accounts for the destination (as category lists are shared across all accounts, importing the farm category list is possible.) The reason is that these accounts are often used online for payment or downloading transactions. The new format being integrated into Quicken is Open Financial Exchange (OFX) which is more commonly used by financial institutions. Check with your financial institution(s) to see if they are compatible with either the QIF or OFX format for use with Quicken if doing on-line banking. Quick Tips total number of farms is down slightly both for the U.S. and Oklahoma. Average farm size for the U.S. increased from 431 to 441 acres from 1997 to 2002; in Oklahoma, average farm size changed very little (405 acres in 1997 and 404 acres in 2002). If you are currently a Quicken user, evaluate the need to update and make the change only if you find new features that are important to you and will still work with your computer system. We use the Deluxe edition of Quicken when developing our instructions. If you need additional investment features, you may want to consider the Quicken Premier edition. You get all the features of Deluxe, with additional features for monitoring investments. If you run a small business or need invoicing features, then the Quicken Premier Home and Business edition has Deluxe and Premier features plus additional features for a small business including mileage tracking, invoicing, and Schedule C items. For more information about Quicken 2005, go to Census Data Provides Agricultural Insights For those curious about characteristics of farms in the U.S., the 2002 Census data can provide hours of inexpensive entertainment ( Nationally there are 2,128,982 farms; Oklahoma has 83,300 farms. The Women in Agriculture Conferences Scheduled Another finding from the Census data is that the number of farms with principal operators who are female is increasing. For the U.S., the 2002 Census of Agriculture shows 237,819 principal operators are female compared to 209,7784 in In Oklahoma, 8,720 females were principal operators in 2002 compared to 7,931 in To address some of the educational interests of this growing group,

3 Quick Tips Page 3 conferences targeted to women in agriculture were offered last year in several counties. Conferences currently scheduled for this fall include: Chickasha, Friday, Oct. 22, 8:30 a.m.-2:15 p.m., Canadian Valley Technology Center. For more info-, contact Peggy at Seminole, Wednesday, November 3, 9 a.m.-3 p.m., Kelly Haney Center at Seminole State College. For more information, contact Collene Brinlee at Muskogee, December 7, Muskogee, NSU Campus. For more info-, contact Rodney King at Fall Tax Review Fall is a good time to make sure tax management is on track. There is no time like the present to look over what is new for 2004, evaluate your situation, and if necessary make adjustments. Who wants to have to scrape up a large sum of money in early 2005 to pay taxes? Likewise, why let the government use your spare dollars for free? New tax items for 2004 A lot of tax changes took effect in 2003 and are still in effect for Here is what is new for tax year 2004: 1. 1.Generally, the basic standard deduction for 2004 has increased. Head of household $7,150 Married taxpayers filing jointly and qualifying widow(er)s $9,700 Married taxpayers filing separately $4,850 Single $4, Personal exemption has increased to $3100; unless, you are subject to the income phase-out set by your filing status and income. For example, phase out begins for married filing jointly, at $214,050 (not $107,025) or s(s)ingle at $142, The Health Savings Account (not to be confused with the Archer Medical Savings Account, MSA) was added. This account is for people who carry high deductible insurance plans, are not eligible for Medicare, and meet the limits set for annual deductible and the sum of the maximum deductible and out-of-pocket expenses. Contributions to this investment account are tax deductible even if you don t itemize deductions and the interest and earnings are tax free. Distributions can be used tax-free for eligible medical expenses and the account can be held over from year to year Standard Mileage rates have increased. Business mileage rates are 37.5 cents per mile, medical reasons and moving, 14 cents per mile Meal expenses that are subject to hours of service limits may be deducted at 70% versus 50% normally eligible. See IRS publications 463 or New rules that apply to tuition and private college or university tuition savings plans can be found in IRS publication 970. Evaluate your situation Gordon Groover, Virginia Tech Extension Economist, suggests that you set a date with your accountant in October to discuss end-of-the-year tax strategies. Before you meet with the accountant, review your cash flow, income, expenses, equipment needs, and gather information about your withholdings. To determine if your withholdings are adequate you can use a withholding estimator. In Quicken, choose Tax, Tax Withholding Estimator. This withholding estimator is designed to provide information for users with wages and salaries. If you have been recording any salary and tax withholdings in Quicken, it will be a straight forward operation. Otherwise, a quick tax estimator is available on the Internal Revenue Service website at Click on Information for Individuals (left sidebar), then click on Welcome to the IRS Withholding Calculator. You can then determine if you need to adjust your estimated payments or W-4 withholding. Make the necessary adjustments 1. Make the sales and purchases you have discussed with your accountant. Keep your depreciation schedule current. 2. Adjust withholdings as necessary by filing a new W-4 or estimated tax payment. It is OK to have a bit of a cushion, but why let Uncle Sam use your money for free when you

4 Page 4 could be increasing your savings and investments? Manage your taxes so they don t tax you. Click on the tab Summary and record the following information: Quick Tips How to Record a Loan When You are the Lender If you are financing the sale of your own property or lending money to someone, you might like to track the loan balance and payments in Quicken. You will need to keep good records outside of Quicken or do some extra work within Quicken to record all of the information needed for tax purposes (capital gains, installment sale income earned for the year, etc). You should consult your tax preparer to determine when income is counted and gain/loss realized. As we worked through this scenario, it emphasized some of what is lacking in Quicken by not being a double-entry accounting program. We suggest that you have a memo keyword (something unique that could be filtered in a report) and/or use the same Payee Name (the borrower) for all transactions related to the sale and note. Next Note: We are also assuming that the loan we are making is new. No payments on the note have been paid. If you are recording a note that was made in the past and for which you have received payments, select Yes. This adjusts the calculations for current balance. Here are step-by-step instructions for an example loan. A piece of property, the Smith Place, is being sold. The sale price is $200,000 (250 acres at $800 per acre). The sales contract states that a $20,000 down payment is to be made at signing (September 30, 2004). The note for $180,000 has an interest rate of 5.5% amortized over 15 years, compounding monthly. The first monthly payment from Jon Deer is due October 30, Record the down payment The down payment is received as a cash deposit into our Checking account. Our Payee, the borrower, is Jon Deer, and we note Smith Place payment in the memo. Next Setting up the loan asset account To create the loan and record deposits of payments received choose: Property & Debt Loans New Next

5 Quick Tips Page 5 Done A message Quicken has estimated the amount of the next payment for this loan appears. OK If you want to see how the payments will be split between principal and interest, click on the Payment Schedule tab. To view a graph showing the portion of payments going to principal and interest, click on the Payment Graph tab: The loan payment is $1, per month. Done The next screen will help you to schedule the payments. Notice that the Payment Method is automatically set to Deposit. The Checking account is selected by default to receive the deposit; however, a different account may be selected at the time of the payment. Close the window by clicking on the X in the upper right corner of the loan window. Recording a loan payment To record the regular payment click on: Property & Debt Loans OK A summary screen appears and shows the terms of the loan. If you have more than one loan account you may have to click on Choose Loan (top middle of the window), Smith Place Loan Click on the Make Payment button on the right. This is a Regular payment.

6 Page 6 Quick Tips Building a Sustainable Business: A Guide to Developing a Business Plan for Farms and Rural Businesses, assists farm business owners in creating a holistic business plan rooted in family and community values. A farm family s planning process is included in the guide s text and worksheets. Blank worksheets are included to develop new strategies or develop a business plan to share with a lender. If you click on Split, you will see that the payment amount is split between two categories. Smith Place Loan tracks repayment of principal and the remaining balance will be tracked in that account. Interest income, Interest Inc, shows the portion of the payment that is interest. OK To obtain a copy of this $14 guide, go to the Sustainable Agriculture Research and Education (SARE) website: or call Sustainable Agriculture Publications, Individual chapters may also be downloaded free from the Minnesota Institute for Sustainable Agriculture (MISA) website: The total cash payment goes to the Checking account and increases the balance by $1, Other Resource Materials September is College Saving Month. If you need some good information about saving for college tuition go to Learn about good investment tools and whether they should be placed in your child s name or your own for financial aid qualification. Oklahoma State University, in compliance with Title VI and VII of the Civil Rights Act of 1964, Executive Order as amended, Title IX of the Education Amendments of 1972, Americans with Disabilities Act of 1990, and other federal laws and regulations, does not discriminate on the basis of race, color, national origin, religion, sex, age, disability, or status as a veteran in any of its policies, practices or procedures. This includes but is not limited to admissions, employment, financial aid, and educational services.