UPDATE: QuickBooks payroll for the new year — ugh.

Ugh.  So, I’m running payroll in QuickBooks for 1/1/2012.  I got the new tax table update (the most up to date one is 21202, by the way).  Then, I started payroll and noticed that my Social Security employee was the same as the Social Security Company.  Hmmm…I was pretty sure that Congress passed the extension…well, for 2 months, anyway.  [Read more…]

Payroll Tax Cut – Temporarily Extended into 2012

President Obama today signed into law a two month extension of the payroll tax cut, which means that 160 million American workers will not see their paychecks shrink starting Jan 1, 2012. The President thanked Congress for ending the stalemate and urged them to keep working to reach an agreement [Read more…]

Accept Credit Cards? Sell on eBay? Get Ready for the 1099-K!

In an effort to close the tax gap (the difference between what people pay in taxes and what they are supposed to pay in taxes) the IRS has instituted a new regulation.

 

If, during the course of your business (which includes selling online on sites like eBay) you:

–received more than $20,000 in credit card payments

–had more than 200 credit card transactions

then you can expect to receive a 1099-K from your credit card processing company (this includes PayPal) [Read more…]

Tax-Saving Ways to Plan for College

Paying for college is one of the greatest financial worries most parents endure.  Aside from your own retirement, college tuition is probably the biggest expenses you will ever face.  It takes planning, research and belt tightening (and maybe some debt) to provide a college education for your children.  Funds will likely come from three sources:  savings, financial aid and tax relief.  Most importantly, you should not save for college at the expense of your retirement savings.  Many organizations, including the federal government, are willing to help your child pay for college.  However, no one is likely to give you a hand-out if your retirement fund comes up short.  Also a qualified retirement fund will not count against you when applying for financial aid.

Investments & Savings – It pays to start early and compound interest.
Allocate your assets based on the age of your children to make sure the money is available when you need it.  If your children are very young (under 11), invest for long-term growth with a large portion in the stock market.  Despite market fluxations, stocks provide the best results over the long-haul if started early enough.  Before your children reach their teens, you may [Read more…]

6 Money Saving Tips for College Freshmen

While there are a variety of tax-saving ways to save for college, tuition is only part of the financial burden.  Parents of Freshmen are often caught off-guard by costs that are above and beyond standard tuition.  Most Freshmen are required to live in college dormitories their first year; if you’re in a dorm, you have to purchase a meal plan.  You’ll need to decorate your dorm room, equip it with appliances and electronics.  Your Freshman will need a computer, most likely a laptop or tablet, books and supplies for classes, plus a college-friendly wardrobe.  Before you know it, you’ve racked up thousands of additional expenses you hadn’t thought of.  Here are some tips to cut expenses not only during the first year, but throughout the college experience.  Remember every cent you save is worth the effort!

Home or Close to Home
The easiest (and probably least popular) option is to live at home.  In most cases, this eliminates the need for many Freshman purchases since there will be no need for dorm furnishings and a meal plan.  The next best option is to choose a college or university that is close to home.  Staying close to home (at least in the same state) means no out-of-state tuition and reduced travel costs to come home for a visit.

Don’t Come Home Too Often
Most Freshmen feel that their college experience has to include transportation.  For some that may mean adding a new or used vehicle.  Some students may already have a car, [Read more…]

IRS Worker Classification Amnesty!

OK, bottom line — did you read our blog post, “Employee vs. Independent Contractor” and think, uh-oh….I did not do that right!!  Well, the IRS is giving you a (rare) do-over.

If you are unsure about the legal differences between an employee and an independent contractor, then go ahead and read the link above.  (If you don’t even know what an independent contractor is…then you need to give us a call today!!)

Now, after reading that…think through your payroll.  Do you think that some people are classified incorrectly?  A new program will allow employers to get it right by making a minimal payment to cover past payroll tax obligations without interest or penalty.  This is a great chance to get everything squared up correctly without having to go through an audit (which most definitely would have a penalty!)

To be eligible for this “amnesty” program you must…

1. Consistently have treated workers in the past as nonemployees

2. Have filed all required Forms 1099 for the workers for the previous three years

3. Not currently be under audit by the IRS, the Dept. of Labor, or a state agency concerning the classification of these workers.  (In other words, if you are already under their thumb…it is too late to get out!)

If you think you could benefit from this program, give our office a call at 770-478-7424 and we can help you get the process started!

IRS gives a little more time to executors of 2010 estates

In an IRS notice effective just this past Monday (Sept. 12th), the IRS gave executors of 2010 estates a bit more time to decide if they are going to remain in the default estate tax regime or opt out.

Before this notice, the cart was before the horse:

“To make it clear that the Form 8939 is due in January and that estate tax returns are not due until March gets them in the right order,” Ron Aucutt, partner with McGuireWoods said.  “It was very awkward for executors to have to file a return by Sept. 19 when they still had until Nov. 15, in effect, to elect out of filing a return at all,” he said. Previously they were in a situation of having to file an estate tax return when they still were not sure if they were going to elect out, he said.

On a personal note, my dad passed away a few years ago.  I know that it is hard enough to deal with the grief of losing a loved one without having to worry about the IRS, the estate tax law changes and Form 89-whatever.  I’m writing this post to give you a heads up on a change in the rules, but also to encourage anyone who needs help with this to seek out some assistance from a tax professional, whether its from us or not.  You need time to grieve and heal, which is almost impossible to do if you are dealing with things like this.

IRS Gives Three-Month Extension on Form 2290

Highway Use Tax Return – Due November 30th

The Internal Revenue Service has advised truckers and other owners of heavy highway vehicles that their next federal highway use tax return, usually due August 31, will instead be due on November 30, 2011.

Because the highway use tax is currently scheduled to expire on September 30, 2011, this extension is designed to alleviate any confusion and possible multiple filings that could result if Congress reinstates or modifies the tax after that date. Under temporary and proposed regulations filed today in the Federal Register, the November 30 filing
deadline for Form 2290, Heavy Highway Vehicle Use Tax Return, for the tax period that begins on July 1, 2011, applies to vehicles used during July, as well as those first used during August or September. Returns should not be filed and payments should not be made prior to November 1.

To aid truckers applying for state vehicle registration on or before November 30, the new regulations require states to accept as proof of payment the stamped Schedule 1 of the Form 2290 issued by the IRS for the prior tax year, ending on June 30, 2011. Under federal law, state governments are required to receive proof of payment of the federal highway use tax as a condition of vehicle registration. Normally, after a taxpayer files the return and pays the tax, the Schedule 1 is stamped by the IRS and returned to filers for this purpose. A state normally may accept a prior year’s stamped Schedule 1 as a substitute proof of payment only through Sept. 30.

For those acquiring and registering a new or used vehicle during the July-to-November period, the new regulations require a state to register the vehicle, without proof that the highway use tax was paid, if the person registering the vehicle presents a copy of the bill of sale or similar document showing that the owner purchased the vehicle within the previous 150 days.

In general, the highway use tax applies to trucks, truck tractors and buses with a gross taxable weight of 55,000 pounds or more. Ordinarily, vans, pick-ups and panel trucks are not taxable because they fall below the 55,000-pound threshold.

For trucks and other taxable vehicles in use during July, the Form 2290 and payment are, under normal circumstances, due on Aug. 31. The tax of up to $550 per vehicle is based on weight, and a variety of special rules apply to vehicles with minimal road use, logging or agricultural vehicles, vehicles transferred during the year and those first used on the road after July.

100% Bonus Depreciation Opportunities

Your corporation may be able to significantly benefit from a short-term offer from Uncle Sam. But you need to plan now! This benefit can be used to significantly cut taxes to zero out your 2011 federal tax liability or provide an opportunity to carry back losses to reduce your income in a prior year to receive a refund on tax you already paid.

For a limited time, companies have the opportunity to write off 100 percent of qualifying asset purchases – and achieve major tax savings as a result. Now’s the time to examine the possible tax savings and take your findings to your corporation’s decision makers before the tax break goes away.

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 increased the 50 percent depreciation deduction to 100 percent through 2011. In 2012, bonus depreciation reverts to 50 percent. Make sure those who make purchasing decisions for your company are aware of the tax implications of this bonus depreciation while there is still time to take advantage. Make sure needed equipment is purchased before December 31, 2011.

To be eligible for bonus depreciation, qualified property must meet the following equirements:

  • The asset must be depreciable under Modified Accelerated Cost Recovery System (MACRS) and have a recovery period of 20 years or less.
  • The property must be new and placed in service after September 8, 2010, and up until December 31, 2011.
  • There is a narrow exception to the “new” requirement: Leased equipment under a sale and leaseback that commences within three months of the purchase can qualify as new to the lessee, if the lessee is the first and only user of the equipment.

Innocent Spouse – Elimination of Two-Year Limit

The IRS announced on July 25th that it will extend help to more innocent spouses by eliminating the two-year time limit that applies to certain relief requests. The change is effective immediately.

 “In recent months, it became clear to me that we need to make significant changes involving innocent spouse relief,” said IRS Commissioner Doug Shulman. “This change is a dramatic step to improve our process to make it fairer for an important group of taxpayers. We know these are difficult situations for people to face, and today’s change will help innocent spouses victimized in the past, present and the future.” 

  • The IRS will no longer apply the two-year limit to new equitable relief requests or requests currently being considered by the agency.
  • A taxpayer whose equitable relief request was previously denied solely due to the two-year limit may reapply using IRS Form 8857, Request for Innocent Spouse Relief, if the collection statute of limitations for the tax years involved has not expired. Taxpayers with cases currently in suspense will be automatically afforded the new rule and should not reapply.
  • The IRS will not apply the two-year limit in any pending litigation involving equitable relief, and where litigation is final; the agency will suspend collection action under certain circumstances.