To expand services in today's economy some small business owners have been asking this question, what does it take to get a bank loan?

• An unimpeachable business plan. Small businesses need to be explicit with details about how borrowed money will be spent and how it will add to business growth.
• Bigger down payments. If you are seeking a construction loan, for example, expect loan officers to ask for more cash for the project...as much as 50% more than they might have required in 2006. Looking to acquire an existing business? Expect banks to require 20% more up front, or about a quarter of the purchase price.
• Clean credit. It is not just a plus, it is required. Note that in Feburary, only 1.46% of loans were delinquent, compared to 4.42% at the height of the recession in May 2009.
• Lower debt levels. Lenders want small businesses to shed excessive debt. Think debt that is less than four times income. As recently as 2006, six times income was acceptable, but not anymore!

Congratulations to the Winners of the 2012 Tax Season 1040 Contest

Clients who submitted their completed organizer by February 24^th qualified to enter our weekly drawing and win up to $500 off their tax return invoice!  Congrats to our four lucky winners:

• Francine Bazluke
• Jean Darrow
• Chris and Laura Soares
• Kathryn Olmsted and John Leggett

Q:  Beginning in 2011, it is my understanding there are additional reporting requirements necessary for sales of stocks. What are they and how does that impact our return? How does this impact the costs associated with tax return preparation?

For the answer to this question we referred to John Davis, CPA, CVA, CFP and Managing Partner...

A:  That is an excellent question and perhaps in part you ask because you have noticed a fair amount of additional information being included with your tax return.  Over the past few years the IRS has been requiring more detailed schedules be included with specifics pertaining to your stock transactions.  For 2011 Congress added yet another requirement.  Your broker is now required to provide detailed cost information for all shares acquired after January 1, 2011.  This  has resulted in a new form being required to be included with your return - Form 8949 - for reporting sales of capital assets.  Fortunately, we have been providing detail with regard to all stock transactions for the past few years, but now must do so in four different categories rather than only two.  This added detail did result in additional fees for those with stock transactions, but fortunately our existing policies and procedures helped keep the fee increase to a minimum.  Most brokers could provide us the information we needed, but in many cases we needed to properly classify it within the four categories.  Admittedly, there were some brokers' statements that required substantially more work to report properly.  Our fees varied accordingly.

Look for the following in next month's Q&A corner:

"How can I use the client portal to send the firm private, sensitive documents?"

Do you have a question for us? Please email your questions to info@dh-cpa.com.  We will address your question promptly and may include it in a future issue!

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