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How to create prepare contract for submission to clients tax accounting tax case handling apprentice

1 Views· 11/26/23
Aryel Narvasa
Aryel Narvasa
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The bookkeeping services agreement is between a client and a bookkeeper to provide accounting services for a one (1) time or monthly basis. The bookkeeper will most likely have access to banking records, receipts, revenue details, and other financial information. Therefore, it’s imperative that the bookkeeper that is selected is someone who can be trusted.

Retainer – Advance payment to the accountant to begin their services. Common for larger accounting tasks or before tax filing and reporting.

Table of Contents
What Does a Bookkeeper Do?
How Much Do Bookkeepers Make?
Salary
Hourly Rate ($/hr)
(Video) Bookkeeping Accounting Services Agreement – EXPLAINED
How to Write a Bookkeeper Services Agreement
What Does a Bookkeeper do?
A bookkeeper, who is most likely an accountant, is someone that is hired to create a process for managing the records of a business or individual for internal financial reports and tax returns. The management tasks of a professional bookkeeper vary depending on the client; however, they may be asked to oversee any of the following:

Accounts Payable
Accounts Receivable
Bank Reconciliation
Bill Payment
Budget Preparation
Customized Reports
Detailed General Ledgers
Financial Statements
General Bookkeeping
Payroll and Check Registers
How Much do Bookkeepers Make?
Factors impacting a bookkeeper’s salary include overall experience,

On the other hand, taxation for leases generally remains unchanged since the issuance of Revenue Regulations (RR) No. 19-86 on Jan. 1, 1987 which prescribes the rules to govern the tax treatment of lease agreements.

As we all know, accounting standards and tax rules differ in many instances, and PFRS 16 is no exception. The purpose of this article is to provide a useful reference for taxpayers in knowing and dealing with the differences of accounting and tax rules for leases.

SHORT-TERM LEASE AND LEASE FOR LOW VALUE ASSETS
PFRS 16 defines short-term lease as a lease with a lease term of 12 months or less but taking into consideration the renewal options. On the other hand, lease for low-value assets is a lease for which the underlying asset is of low value
TAX RULES
RR No. 19-86 defines a lease as an agreement between a lessor and a lessee giving the lessee possession and use of a specific property upon payment of rentals over a period of time (which may be definite or indefinite). The equivalent of short-term lease or lease for low value assets for tax purposes is an operating lease.

Operating lease is defined in RR No. 19-86 as a contract under which the asset is not wholly amortized during the primary period of the lease, and where the lessor does not rely solely on the rentals during the primary period for his profits but looks for the recovery of the balance of his costs and for the rest of his profits from the sale or re-lease of the returned asset of the primary lease period.

LESSEE TAXATION
In an operating lease, the lessee may deduct the amount of rental actually due under the lease agreement during the year. This is subject to 5% expanded withholding tax (EWT).

In addition to the rent actually paid or payable to the lessor, the lessee should also report all the expenses/costs which under the terms of the agreement the lessee is required to pay or for the account of the lessor, as additional rental expense/cost which is also subject to 5% EWT. An example is the real property tax on the leased property if paid by the lessee should be claimed by the lessee as rental expense/cost and not as tax expense.

In case the lessee pays advance/prepaid rentals, if the lessee adopts the accrual basis of accounting, according to tax rules, the lessee should treat the advance/prepaid rentals as an asset subject to 5% EWT at the time of payment. These shall be claimed as deductible at the time of its application to the lease.

If the lessee, on the other hand, adopts the cash basis of accounting, the advance/prepaid rentals are deductible items at the time of payment provided the advance/prepaid rentals do not extend beyond 12 months. Otherwise, advance rentals/prepaid rentals corresponding to the period beyond 12 months shall be accounted for as an asset and will be claimed as deductible items at the time of its application to the lease. For withholding tax purposes, the entire advance/prepaid rentals including those for the period beyond 12 months shall be subject to 5% EWT at the time of payment.

With respect to security deposit for the faithful performance of certain obligations of the lessee, the lessee, whether adopting accrual or cash basis of accounting, should treat the same as an asset and not subject to 5% EWT at the time of payment because of its being in the nature of a conditional deposit. These deposits shall be claimed deductions subject to 5% EWT at the time of its application to the lease.

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