| *** jelkner has quit (Quit: Leaving) | 12:07 | |
| BigBrother | Amar | 13:00 |
|---|---|---|
| BigBrother | Tick Tock! | 13:00 |
| BigBrother | It's 13:00 UTC o'clock and NOVA Web Development's meeting is starting. | 13:00 |
| BigBrother | Uh-oh! That is embarassing... | 13:00 |
| BigBrother | Unfortunately, there are no items on the agenda! | 13:00 |
| BigBrother | Have a nice day, Websters! | 13:00 |
| *** dcammue has quit (Ping timeout: 480 seconds) | 14:42 | |
| jelkner | Hello dcammue! | 14:51 |
| jelkner | I got your email. | 14:51 |
| jelkner | I'll just put your phone number | 14:52 |
| jelkner | and the same address where the Jetro office is | 14:52 |
| dcammue | Okay | 14:52 |
| jelkner | are you ready to get started? | 14:53 |
| dcammue | The county is Montserrado. | 14:53 |
| dcammue | Yes i am ready | 14:54 |
| jelkner | yes, i have it | 14:54 |
| jelkner | how are we going to do this? | 14:54 |
| jelkner | we should start with the January 2025 bank statement | 14:54 |
| jelkner | and setup accounts | 14:54 |
| dcammue | Yes | 14:54 |
| jelkner | i'm wondering if i should just do it on my local machine | 14:54 |
| jelkner | and you do it there | 14:54 |
| jelkner | i mean not use postgress for the back end yet | 14:55 |
| jelkner | are you in the office? | 14:55 |
| dcammue | But we will bring the balance from 2024 to january | 14:55 |
| jelkner | our goal should be to get step-by-step notes of what we do here. | 14:56 |
| jelkner | so that they can be reproduced later | 14:56 |
| dcammue | No, not in the office. But you can do it on the local mechine | 14:56 |
| jelkner | again and again ;-) | 14:56 |
| jelkner | ok | 14:56 |
| jelkner | be patient | 14:56 |
| jelkner | i'm going to ask *a lot* of questions!! ;-) | 14:56 |
| dcammue | Yes | 14:56 |
| jelkner | I'll describe everything i do | 14:57 |
| jelkner | i just launched gnucash | 14:57 |
| jelkner | now: File -> New File | 14:58 |
| jelkner | then Cancel, since I don't want Gnucash to setup the accounts for me | 14:58 |
| dcammue | Yes | 14:59 |
| jelkner | Now I'll add the 5 top level accounts: Equity, Assets, Liabilities (the 3 balance sheet accounts) and Income and Expenses (the 2 cash flow accounts) | 15:00 |
| dcammue | +1 on path | 15:00 |
| jelkner | done. Then I saved the file with the name SECOSOL | 15:01 |
| dcammue | +1 | 15:01 |
| jelkner | ok, on to the bank statements | 15:02 |
| jelkner | i'm looking at Jan 2025, are you? | 15:02 |
| dcammue | +1 | 15:02 |
| jelkner | We have 2 beginning balances: savings: $105 | 15:02 |
| jelkner | and checking: 3821.70 | 15:02 |
| jelkner | i need to create those two accounts | 15:03 |
| dcammue | +1 | 15:03 |
| jelkner | bank accounts come under which top level account>? | 15:03 |
| jelkner | Assets? | 15:03 |
| dcammue | Create Current Assets under Assets | 15:03 |
| jelkner | and then the bank accounts under that? | 15:04 |
| dcammue | Then create Saving and Checking accounts under Current Assets | 15:04 |
| dcammue | Yes, but bank account can be the same as cash | 15:05 |
| jelkner | ok, under Current Assets (which I made type Asset), I created ACFCU Checking and ACFCU Saving (both of type Bank) | 15:06 |
| dcammue | +1 | 15:06 |
| jelkner | so let's do savings first | 15:06 |
| dcammue | 105 | 15:06 |
| dcammue | $105 | 15:06 |
| jelkner | what account balances that? | 15:07 |
| dcammue | So it needs corresponding account | 15:07 |
| jelkner | yes, that's my question | 15:07 |
| dcammue | Opening balance under equity | 15:07 |
| jelkner | Thanks! | 15:07 |
| jelkner | I called it Openning Balances | 15:08 |
| jelkner | since it will hold more than one | 15:08 |
| dcammue | +1 | 15:08 |
| jelkner | Sweet | 15:10 |
| jelkner | Now we come to the first transaction | 15:10 |
| jelkner | 1/4 | 15:11 |
| jelkner | $273.66 | 15:11 |
| jelkner | to Johanna | 15:11 |
| dcammue | Now total assets equal total equity minus liabilities | 15:11 |
| jelkner | yup | 15:11 |
| jelkner | so this next transaction is a *big one*! | 15:11 |
| jelkner | we may not get passed it today | 15:11 |
| dcammue | Yes, but common | 15:11 |
| jelkner | but if we get it done, it will be great! | 15:12 |
| dcammue | Open expense account | 15:12 |
| jelkner | before we do that | 15:12 |
| jelkner | you need to explain a lot to me | 15:12 |
| jelkner | and i need to explain some things to you perhaps | 15:12 |
| dcammue | And create salaries & wages account | 15:12 |
| dcammue | Oka | 15:13 |
| jelkner | So Johanna is being paid at $15 per hour | 15:13 |
| dcammue | So, was johanna a employee or contracer | 15:13 |
| jelkner | for $20 hours | 15:13 |
| jelkner | employee | 15:13 |
| dcammue | Sweet | 15:13 |
| jelkner | 15 * 20 = 300 | 15:13 |
| jelkner | but we had to withhold taxes | 15:14 |
| dcammue | Okay | 15:14 |
| jelkner | *and* we need to also mark our own half of the taxes | 15:14 |
| jelkner | since we keep some from Johanna | 15:14 |
| jelkner | and we have to match those with the IRS | 15:14 |
| jelkner | at least that's how i understand it | 15:14 |
| dcammue | How much taxes your withhold on each paid | 15:14 |
| jelkner | it always makes my head spin | 15:14 |
| jelkner | ouch! | 15:15 |
| jelkner | hold on a second | 15:15 |
| jelkner | let me see if Devesh can join us | 15:15 |
| jelkner | since i think we are going to need him here | 15:15 |
| dcammue | Okay | 15:16 |
| dcammue | So jelkner | 15:21 |
| dcammue | If you can not get him, no worry | 15:21 |
| dcammue | Let just calculate the tax amount | 15:22 |
| dcammue | 15*20 = 300- 273.66 = 26.34 tax value withhold | 15:23 |
| dcammue | Hello devesh | 15:23 |
| jelkner | thanks devesh! | 15:23 |
| jelkner | the 3 of us need to do this together | 15:23 |
| jelkner | and we should do it here | 15:24 |
| dcammue | +1 | 15:24 |
| jelkner | so we automatically get a play-by-play of each transaction | 15:24 |
| jelkner | by the time we're done, we have learned *a lot* about bookkeeping! | 15:24 |
| jelkner | we are on the 1/4 transaction | 15:24 |
| jelkner | 273.66 | 15:25 |
| devesh | Hello | 15:25 |
| jelkner | dcammue, i was wrong | 15:25 |
| jelkner | johanna was earning $17 per hour | 15:25 |
| jelkner | so we have 20 * 17 = 340 | 15:25 |
| jelkner | 340 - 273.66 = 66.34 | 15:26 |
| jelkner | we need to figure out how to account for this | 15:26 |
| devesh | We can confirm through the spreadsheet in the nextcloud, but the total wages I listed on the 941 was $4420 for the quarter, going off of $340 a week | 15:26 |
| jelkner | yes, that rings true devesh | 15:26 |
| dcammue | 15*20 = 340- 273.66 = 66.34 tax value | 15:26 |
| jelkner | so the question before us is how to enter this transaction | 15:26 |
| jelkner | in our books i mean | 15:27 |
| dcammue | We want to calculate the tax value withhold | 15:27 |
| jelkner | we have 3 tax accounts | 15:27 |
| jelkner | federal income tax | 15:27 |
| jelkner | FICA | 15:27 |
| jelkner | state income tax | 15:27 |
| jelkner | i believe that's it | 15:27 |
| dcammue | So we will be dealing with three accounts here | 15:28 |
| jelkner | and the amount SECOSOL is double the $66.34, right? | 15:28 |
| jelkner | since johanna pays 1/2 and SECOSOL pays 1/2, yes? | 15:28 |
| devesh | We could record the full $340 as wage expense, the $66.34 as payroll tax liabilities (split across FICA and state tax payable), and record the $273.66 as cash paid to Johanna. | 15:29 |
| dcammue | Salaries & wages expense, tax payable, cash | 15:29 |
| jelkner | but what about the part SECOSOL owes? | 15:29 |
| dcammue | No devesh | 15:30 |
| dcammue | One mistake | 15:30 |
| dcammue | 340 to cash | 15:30 |
| jelkner | why cash? | 15:30 |
| dcammue | Because you are loosing cash | 15:30 |
| jelkner | not yet | 15:31 |
| jelkner | we have a liability | 15:31 |
| dcammue | 273.66 to johanna | 15:31 |
| jelkner | the taxes at this point are liabilities | 15:31 |
| dcammue | 66.34 to tax payable | 15:31 |
| jelkner | only the 273.66 is lost as an asset | 15:31 |
| jelkner | but the liability has been incurred when we pay her | 15:31 |
| jelkner | *both* the amount we are withholding from her | 15:32 |
| jelkner | *and* the part we will have to pay | 15:32 |
| devesh | Cash should only reflect what actually left the account ($273.66). The remaining $66.34 is tax payable, and the employer portion is an additional payroll tax expense + liability. | 15:32 |
| jelkner | and how do we set up those accounts? | 15:32 |
| dcammue | +1 | 15:32 |
| devesh | We would need to think of the $66.34 as a liability that is paid later. It is not leaving the account at the same time the $273.66 is | 15:32 |
| jelkner | +1 | 15:33 |
| jelkner | so can you break this down for us devesh? | 15:33 |
| dcammue | +1 | 15:33 |
| jelkner | btw, if you're not sure | 15:33 |
| dcammue | That it | 15:33 |
| jelkner | we stop here and i get help | 15:33 |
| dcammue | I am sure | 15:33 |
| jelkner | my son is a CPA | 15:33 |
| dcammue | Let move | 15:34 |
| jelkner | and Lindsey is a bookkeeper with her own business for 20 years | 15:34 |
| jelkner | i can ask them | 15:34 |
| jelkner | unless you know | 15:34 |
| jelkner | this transaction is *so* important | 15:34 |
| jelkner | we need to get it right | 15:34 |
| devesh | It would probably be a good idea to get an external opinion | 15:34 |
| devesh | This is pretty critical | 15:34 |
| jelkner | it is the one that kept biting us in the ass!! | 15:34 |
| jelkner | because i didn't get it right | 15:35 |
| jelkner | and i got in trouble with the tax authorities | 15:35 |
| jelkner | who made us pay penalties | 15:35 |
| jelkner | *lots* of penalties! | 15:35 |
| jelkner | so do you want to stop here and let me ask the experts? | 15:35 |
| jelkner | we can schedule a next session and then i'll get on that | 15:36 |
| dcammue | Let move on, that it | 15:36 |
| jelkner | dcammue, what do you mean? | 15:36 |
| dcammue | Is correct | 15:36 |
| jelkner | what is correct? | 15:36 |
| jelkner | i don't understand | 15:36 |
| jelkner | if you think you do, walk me through it | 15:36 |
| jelkner | first question: which new accounts do we need? | 15:36 |
| jelkner | let's name them | 15:37 |
| jelkner | and say which parent accounts they have | 15:37 |
| dcammue | The distribution of the 340. Total expense for salaries is 340. I | 15:37 |
| jelkner | stop | 15:37 |
| dcammue | In this 340, johanna was paid 273.66 | 15:37 |
| jelkner | wait dcammue | 15:37 |
| jelkner | you're moving too fast! | 15:37 |
| jelkner | - create new account under Expenses named Salary Expense | 15:38 |
| jelkner | is that right? | 15:38 |
| dcammue | +1 | 15:38 |
| jelkner | ok, i'll do that | 15:38 |
| devesh | I think we need two new liability accounts: Payroll Tax Payable – Employee (for the $66.34 withheld from Johanna: FICA + VA tax) and Payroll Tax Payable – Employer (for SECOSOL’s FICA portion). Both would sit under Current Liabilities. We’d also have Payroll Tax Expense under Expenses for the employer portion. | 15:38 |
| dcammue | Salaries & wages expense | 15:39 |
| jelkner | devesh, i'm thinking life would be better if we had three sub accounts under Payroll Tax Payable - Employee | 15:39 |
| jelkner | namely Federal Income Tax | 15:39 |
| jelkner | FICA | 15:39 |
| dcammue | Yes, we will add that when we get transaction for it | 15:40 |
| jelkner | and State Income Tax | 15:40 |
| devesh | +1 | 15:40 |
| jelkner | what do you mean? | 15:40 |
| devesh | That is likely better for visibility too | 15:40 |
| devesh | Having three sub accounts | 15:40 |
| jelkner | dcammue, i want to stop here and let me confirm this | 15:40 |
| jelkner | i'm going to call Lindsey and Osvaldo | 15:41 |
| jelkner | let's schedule a next meeting when i will report back on what they tell me | 15:41 |
| jelkner | sound good? | 15:41 |
| jelkner | this was most helpful | 15:41 |
| dcammue | This transaction need split | 15:41 |
| jelkner | since i know exactly what to ask them | 15:41 |
| jelkner | yes dcammue | 15:41 |
| jelkner | i get that | 15:41 |
| dcammue | Loot up in the bar | 15:42 |
| jelkner | but i need to know exactly what the account names are | 15:42 |
| jelkner | and where they go | 15:42 |
| dcammue | Click on split | 15:42 |
| jelkner | for example, their will be FICA from two sources | 15:42 |
| jelkner | the employee and the employer | 15:42 |
| dcammue | Payroll tax payable | 15:42 |
| dcammue | And checking account | 15:42 |
| jelkner | that doesn't seem right to me dcammue | 15:43 |
| jelkner | because when it comes times to pay uncle sam | 15:43 |
| jelkner | we won't know how to do it | 15:43 |
| jelkner | our accounting system should make that automatic | 15:43 |
| dcammue | Uncle sam is an employee? | 15:43 |
| jelkner | we should be able to read the amounts that have to go in the W-3 form | 15:43 |
| jelkner | LOL | 15:43 |
| jelkner | Uncle Sam is the US Government | 15:44 |
| jelkner | sorry, that's what we call our government when it wants taxes from us ;-) | 15:44 |
| jelkner | it's an expression | 15:44 |
| dcammue | Firstly, create payroll tax payable under liabilities | 15:44 |
| dcammue | Then you now have the two split accounts | 15:45 |
| jelkner | dcammue, please resist the temptation to go ahead without really knowing what we are doing | 15:45 |
| jelkner | dcammue, i have a task for you | 15:45 |
| dcammue | Okay | 15:45 |
| jelkner | look up the Federal Employer Payroll Forms | 15:45 |
| jelkner | devesh, W-3 is the main one, right? | 15:46 |
| devesh | Jeff, have you had a chance to look at my email? | 15:46 |
| jelkner | which one? | 15:46 |
| devesh | Yes, the W-3 is the main one | 15:46 |
| jelkner | great | 15:46 |
| jelkner | dcammue, get yourself a copy of the W-3 form | 15:46 |
| devesh | I was able to e-file the W2 & W3 | 15:46 |
| dcammue | I have it | 15:46 |
| devesh | But Johanna still needs to be sent her copy | 15:46 |
| jelkner | ok, that's a separate issue | 15:47 |
| jelkner | i assume you calculated the values yourself | 15:47 |
| jelkner | we want them to come right from Gnucash | 15:47 |
| jelkner | directly | 15:47 |
| jelkner | we want to *read* them | 15:47 |
| jelkner | not compute them | 15:47 |
| jelkner | Gnucash should compute them | 15:48 |
| jelkner | if we set it up correctly | 15:48 |
| jelkner | do you get what i mean? | 15:48 |
| devesh | Got it, its just that we were on a bit of a time crunch as we discussed on Wednesday | 15:48 |
| jelkner | yes, devesh i know | 15:48 |
| jelkner | i'm not thinking of this year | 15:48 |
| jelkner | i'm thinking of next year | 15:48 |
| devesh | Oh, yes I definitely agree | 15:48 |
| jelkner | small businesses regularly cut corners | 15:49 |
| jelkner | but our goal over the next year is to start a bookkeeping cooperative | 15:49 |
| jelkner | that does things right! | 15:49 |
| jelkner | dcammue, do you understand what i'm saying about "reading the value" not computing it? | 15:49 |
| dcammue | You want gnucash to comput the total tax withold from johanna? | 15:49 |
| jelkner | +1 | 15:50 |
| jelkner | every field we need to enter in federal forms (the ones we said to uncle sam ;-) | 15:50 |
| devesh | Also Jeff, if you'd like, I can go ahead and send Johanna her copy of the W2 to save you some time. I would just need her email address. | 15:50 |
| jelkner | should be able to be read from our bookkeeping system | 15:50 |
| jelkner | in other words | 15:50 |
| jelkner | if there is a FICA liability | 15:50 |
| jelkner | then it should accumulate in an account in the system *as it is incurred* | 15:51 |
| dcammue | It will give you the total tax you need to pay from johanna salaries | 15:51 |
| jelkner | so that when it comes time to pay | 15:51 |
| jelkner | it is the value of the liability already in the system | 15:51 |
| jelkner | which is then zeroed out when we pay | 15:51 |
| jelkner | and it moves from liability to expense | 15:52 |
| jelkner | no, wait | 15:52 |
| jelkner | it comes out of liability and reduces assets | 15:52 |
| jelkner | see, i'm still very confused | 15:53 |
| jelkner | but i'm starting to get it | 15:53 |
| jelkner | only practice will really make it gel for me | 15:53 |
| jelkner | so when do we want to meet next? | 15:53 |
| jelkner | can we meet tomorow? | 15:53 |
| jelkner | devesh and jelkner will be snowed in then | 15:54 |
| jelkner | assuming the electricity doesn't go out | 15:54 |
| jelkner | i'll be able to meet | 15:54 |
| dcammue | If it come time to pay uncle sam, the total liability will be in the gnucash system. And when you pay it, it will reduces cash and go to payroll tax expense | 15:54 |
| jelkner | when you say it "will bey in the gnucash system", dcammue, where? | 15:55 |
| dcammue | Payroll tax expense will increase | 15:55 |
| jelkner | in which account? | 15:55 |
| jelkner | or rather, which accounts? | 15:55 |
| dcammue | Liability | 15:55 |
| jelkner | NO! | 15:55 |
| jelkner | liability has lots of things in it | 15:55 |
| dcammue | Let me get you clear | 15:55 |
| jelkner | so the amount i owe for FICA will be mixed in with other liabilities | 15:56 |
| dcammue | Payroll tax payable | 15:56 |
| jelkner | dcammue, you're still not getting me | 15:56 |
| jelkner | FICA is payroll tax | 15:56 |
| dcammue | The tax is an income tax rigt | 15:56 |
| jelkner | Federal Income Tax is payroll tax | 15:56 |
| jelkner | State Income Tax is payroll tax | 15:56 |
| jelkner | so you have three things mixed together | 15:57 |
| jelkner | they need to be separated | 15:57 |
| jelkner | since you need to fill in the form with each in its own box | 15:57 |
| jelkner | our job is not done until our system tells us what goes in each box | 15:57 |
| jelkner | otherwise we compute by hand and make mistakes | 15:58 |
| dcammue | Which one are you withholding on johanna salary | 15:58 |
| jelkner | all of them! | 15:58 |
| dcammue | Okay | 15:58 |
| jelkner | let's not keep devesh any longer | 15:58 |
| jelkner | devesh, can you meet tomorrow? | 15:59 |
| dcammue | Then we need to know the different amount the goes to each | 15:59 |
| jelkner | i have a 12 noon meeting | 15:59 |
| jelkner | the rest of my day is clear | 15:59 |
| devesh | I am able to meet tommorow | 15:59 |
| jelkner | want to do this same time? | 15:59 |
| jelkner | 10 am? | 15:59 |
| jelkner | devesh? | 16:00 |
| devesh | Does 11 work? | 16:00 |
| jelkner | +1 | 16:00 |
| dcammue | After your 12 noon meeting, can we meet? | 16:00 |
| jelkner | but i have a 12 noon | 16:00 |
| jelkner | what about 1 pm? | 16:00 |
| devesh | That's perfect. | 16:00 |
| jelkner | that would give us more flexibility | 16:00 |
| jelkner | excellent | 16:00 |
| jelkner | dcammue, devesh see you at 1 pm EST 18:00 UTC tomorrow | 16:01 |
| dcammue | Okay | 16:01 |
| devesh | Jeff one quick thing | 16:01 |
| jelkner | i'll report on my conversations with the experts then | 16:01 |
| jelkner | yes, devesh? | 16:01 |
| devesh | if you'd like, I can go ahead and send Johanna her copy of the W2 to save you some time. I would just need her email address. | 16:01 |
| jelkner | johanna.garay@secosol.us | 16:01 |
| jelkner | hold on | 16:02 |
| jelkner | let me confirm that | 16:02 |
| jelkner | btw devesh | 16:02 |
| jelkner | please put all the forms somewhere dcammue and i can see them | 16:02 |
| jelkner | we want to do this ourselves next year | 16:02 |
| jelkner | so we need to take notes on each step | 16:03 |
| jelkner | and see the forms | 16:03 |
| dcammue | Okay | 16:03 |
| devesh | Got it. I attempted to get into the NextCloud, and I have an account, but I am not able to see any of the folders | 16:03 |
| devesh | Like any of the SECOSOL tax folders | 16:03 |
| jelkner | ahh, thomas can help with that | 16:03 |
| jelkner | but he is busy now working with edzon | 16:04 |
| jelkner | dcammue, that's your task | 16:04 |
| jelkner | get devesh help with using nextcloud | 16:04 |
| dcammue | Okay | 16:04 |
| jelkner | so we can share documents | 16:04 |
| jelkner | Confirmed: johanna.garay@secosol.us | 16:05 |
| devesh | Thank you! Will send over now. | 16:05 |
| jelkner | sweet | 16:05 |
| jelkner | c u tomorrow! | 16:05 |
| jelkner | thanks! this is fun! | 16:05 |
| jelkner | ACTION signs off | 16:05 |
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