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iNEWS.....What You Need to Know, Right Now!

Week of November 21, 2008 • Issue No. 025

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This Week in the iNews:

▲ CORPORATE ESTIMATED TAX PAYMENTS

▲ FOCUS ON SOFTWARE PIRACY: SMALL BUSINESS

▲  LUNCH & LEARN SERIES PROGRAM #5 – PART 2 - YEAR END TAX PLANNING

▲ Corporate Estimated Tax Payments

C Corporations - This is to remind you that a quarterly estimated tax payment for 2008 calendar year corporate taxpayers is due December 15, 2008.  Fiscal year corporations have estimated tax payments due on the 15th day of the 4th, 6th, 9th and 12th month of their fiscal year.  

Estimated tax is payable in four installments. The payment amounts may be based on the current year's tax, on the previous year's tax, or on annualized or seasonal income. Corporations that fail to pay sufficient estimated tax are subject to a penalty equal to the interest on the underpayment for the period of the underpayment.

You are required to make electronic deposits of all depository taxes for 2008 (such as employment tax, excise tax, and corporate income tax) using the Electronic Federal Tax Payment System (EFTPS) if:

  1. The total deposits of such taxes in 2006 were more than $200,000, or
  2. You were required to use EFTPS in 2007.

If you are required to use EFTPS and fail to do so, you may be subject to a 10% penalty. If you are not required to use EFTPS, you may participate voluntarily.

If you are not registered to file using EFTPS, you must deposit your estimated tax payment using a Form 8109, Federal Tax Deposit Coupon. The completed Form 8109 should be mailed or delivered to an authorized depository by December 15th as well.  Your check should be made payable to the depository institution.

If you have any questions about the amount of your payment or the means of payment, please call our office. We will be happy to assist you.

▲Focus on Software Piracy:  Small Business

Small businesses may inadvertently become “software pirates” and consequently may face financial penalties. The following article discusses how some businesses can avoid the risk of penalties.

Part 1 of 3 – How Businesses Can Avoid Piracy

The Business Software Alliance (BSA), which represents the world’s commercial software industry, announced in July 2008 that it would be increasing its efforts to shine a brighter light on software piracy. One out of every five pieces of software used in the United States is pirated; a serious problem that hurts the US economy, eliminates jobs, damages local industries, and cost the US more than $8 billion in 2007 alone.

In the US, businesses large and small face serious legal and financial risks because of software piracy, including fines up to $150,000 for each infringement.  Federally prosecuted copyright infringement cases can result in fines of up to $250,000 and in some cases, imprisonment.

Many businesses do not fully understand the software in use in their organizations and have inadequate controls to ensure lawful use. To control software use, businesses need to create, communicate, and enforce effective software asset management programs. Businesses can download a variety of free basic software asset management tools from the BSA’s website at www.bsaaudit.com. From this site businesses can also download free software audit tools that can help determine whether their organizations are using unlicensed software.

According to the Associated Press, the BSA generally begins investigating businesses after a tip from an employee. Software vendors can also initiate or lend credence to a complaint if they tell the BSA that an organization has, for example, bought suspiciously fewer software licenses than it has employees.

Next time: Part 2 of 3 – Small Business Settlements

If you have questions about software licensing or other computer control concerns, please call our office. We will be happy to respond.

▲ Lunch & Learn Series Program # 5 – Part 2 - Year End Tax Planning

Please join us for the fifth program of our Lunch & Learn Series at noon on Tuesday, December 16, 2008 in the Prangley Marks, LLP lunch/conference room.  This is the second in our two part series on year end planning. Bring your year end tax planning or accounting issues for discussion.  There will only be two weeks until the end of the year, so there still may be time!

Please contact mripley@pmcpa.com or call (616) 774-9004 to reserve your spot.

Complimentary lunch, program and parking provided.

Seating is limited.

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