Tuesday Tax Time

You are currently browsing articles tagged Tuesday Tax Time.

Tuesday Tax Time: the “Small Business Bill that Can’t Get Passed” Edition

August 10, 2010 in Business | 4 comments

Unofficial seal of the United States Congress
Image via Wikipedia

Congress is trying their best to get a small business “boost” bill passed before their August recess, but it doesn’t seem to be.

I have nothing against bills for small business, but I am against the costs of this bill: the CBO estimates it will cost some $3.3 Billion we just don’t have to spend.  We have dumped trillions of dollars on the deficit in the past year or so, and I just can’t see how it is sustainable (…for my children).

This bill will:

-create a Small Business Credit Initiative where Congress will allocate $2 Billion for states to somehow increase the amount of capital to small businesses (I believe they would use some type of quasi-governmental organization like Small Business Development Centers to doll out the money but not sure),

-create a Small Business Lending Fund where the Treasury would be authorized to purchase preferred stock in financial institutions.

This last point just makes me mad! I am SOOOOO freakin’ against this new trend of the federal government owning private companies like GM, banks, etc.  Where did this trend come from?  How did this start?  The federal government is turning into an investor – do you agree with this?  Leave it in the comments.

Enhanced by Zemanta

Tags: , , , ,

Tuesday Tax Time: the “Home Buyers Credit Extension” Edition

July 6, 2010 in Business | 1 comment

Day 105 - Tax Day!
Image by brianjmatis via Flickr

If you bought a home this year, and signed the contract for purchase before April 30, 2010, then you have until September 30 (formerly June 30) of this year to close on the home.  Suweeet.

But there are things you need to know when filing your tax return, so check out the IRS faq on the subject.

Another cool piece to this is that if you’ve already filed your 2009 tax return, you can amend that return and get your money now as opposed to waiting until you file your 2010 tax return.  Again, suweeet.

Thanks, Jason M. Blumer

Enhanced by Zemanta

Tags: ,

(Another) Tuesday Tax Time: Two Bills to be Voted on Tomorrow

June 29, 2010 in Business | No comments

The Senate's side of the Capitol Building in DC.
Image via Wikipedia

There are two bills of potential interest to you that may be voted on by tomorrow.

The Homebuyers Assistance and Improvement Act of 2010 would extend the first time home buyer’s credit to September 30, 2010.  That is, you still have to have signed a contract to purchase a home by April 30, 2010, but this new bill would allow you until September 30, 2010 to move in (extended from the current deadline of June 30, 2010).

and,

The Restoration of Emergency Unemployment Compensation Act is a bill that rose out of the Senate’s inability to pass the previous American Jobs and Closing Tax Loopholes Act of 2010.  The previous bill was set to extend around 50 expiring credits (which is good), but it had some terrible provisions for small business included in the bill (which is bad).  This current restoration bill would extend expiring unemployment benefits for an estimated 1.7 million individuals through November.

Thanks, Jason M. Blumer

Enhanced by Zemanta

Tags: , , , ,

Tuesday Tax Time: E-Verify Time for SC Employers!

June 29, 2010 in Business | No comments

U.S. Department of Homeland Security Official ...
Image via Wikipedia

Guess what day Thursday, July 1st is?  It’s the lucky day when SC Employers (with an employee count of under 100) have to begin using E-Verify to verify the legality of all of their workers in South Carolina.

Actually, you’ve got one of two options:

1.  Either use the Department of Homeland Security’s E-Verify system to verify the legality of the new worker, or

2.  Check to see if they have a valid SC driver’s license (or one of 26 other states with similar qualification requirements for a driver’s license – see the most current list here)

Get started here and go through a checklist to see which option is best for you.  Have fun!

Thanks, Jason M. Blumer

Enhanced by Zemanta

Tags: ,

Tuesday Tax Time: Tax Provisions You Didn’t Know Were in the Healthcare Bill (Part III)

June 22, 2010 in Business | 3 comments

I’m often asked about the timeline of when the huge provisions in the recent healthcare bill will take place.

Download the visual below by simply clicking on it to get a better feel of when the provisions (you didn’t know were in the health care bill) will take place (courtesy of the Common Wealth Fund):

Tags: , ,

Tuesday Tax Time: Tax Provisions You Didn’t Know Were in the Healthcare Bill (Part II)

June 15, 2010 in Business | No comments

Spending on U.S. healthcare as a percentage of...
Image via Wikipedia

I started writing some posts last week on tax provisions “you didn’t know were in the recent healthcare bill” because I keep learning new things about this huge bill!

To fund this new law, beginning January 1, 2013, you will have to begin paying 3.8% in Medicare taxes on any net investment income.  Usually reserved for taxes on wages that you receive from your employer, this Medicare tax, or hospital tax as it is sometimes called, will kick in for married folks with an income above $250,000 ($200,000 for single taxpayers).

What is net investment income?

It includes rental income, gains on the sale of investment property, interest and dividends and royalties.  Yikes.  And if the low Bush capital gains rates are allowed to rise in 2011 (because a tax provision is about to sunset on Dec 31, 2010), then capital gains rates could see an increase unmatched since 1997.

Enhanced by Zemanta

Tags: , , , , ,

Tuesday Tax Time: the “OMG, This is A Scary Bill” Edition

June 1, 2010 in Taxes | 9 comments

The Seal of the United States Senate, the uppe...
Image via Wikipedia

The guvment is trying to stimulate us again, and they continue to un-stimulate us (in my opinion).  The House recently passed the American Jobs and Closing Tax Loopholes Act of 2010, and it is chocked full of tax extenders, relief for the unemployed and puts a hold on cutting Medicare payments to doctors.  The Senate will be voting on it soon.

But the section that makes me go “OMG” is the part that is attempting to undermine all the tax planning we as CPAs perform for our clients.  Some background: if you begin making a lot of money in your small business and you file as a sole proprietor, then you start having to pay a lot of taxes because you are running your business so well (in particular, the self-employment tax piece is the big deal-e-o).  But we as CPAs can guide you through the proper way to convert your entity to an S Corporation, begin taking a reasonable wage through payroll and then take out distributions that do NOT have self-employed tax charged to them.  This has saved our clients many many thousands of dollars throughout our firm’s history.

But this most recent bill passed by the House will charge self-employment tax to the distributions S corporation owners pull out above payroll!  This is amazing!  It’s for Professional Service Corporations, and it only applies to S Corps with 3 or fewer owners.  So if you run a service-based company inside of an S Corporation, your tax planning abilities are about to go away.  That really stinks.

Contact your Senator before they vote on this and tell them this is a killer to the small businesses in America.

Reblog this post [with Zemanta]

Tags: , , ,

Tuesday Tax Time: the “1099 for Everyone” Edition

May 18, 2010 in Business | 2 comments

(picture is from TaxGirl’s blog post)

There has been a lot of stir in the blogosphere lately about the new 1099 rules that will be required of you after December 31, 2011.  As she normally does, TaxGirl, does a great job at helping us understand the truth vs. hype.  Check her post about it here.

Take aways from her blog:

1.  You will have to send 1099s to corporations now.

2.  The threshold is still $600, meaning all payments paid to someone have to equal or exceed that amount (for the whole year) before you have to send them a 1099.

3.  Sales of tangible goods are now included in what you have to report on.

4.  There are provisions to possibly make the reporting NOT quite as bad as you have been hearing in the news.  For example, here is a phrase in the new law:

The Secretary may prescribe such regulations and other guidance as may be appropriate or necessary to carry out the purposes of this section, including rules to prevent duplicative reporting of transactions.

Kelly’s post is very informative… you may want to check it out if you are a business owner!


Tags: , ,

Tuesday Tax Time: the Tennessee Flood Edition

May 11, 2010 in Business | No comments

Flooding in Key Haven caused by hurricane Wilm...
Image via Wikipedia

Most of the time, I enjoy hearing from our clients.  Today was not a good day though.  This client in TN got hit directly by the flood waters… with no flood insurance.  Ouch.  We’re praying for the families devastated by this flood.

But the government has offered help for those affected by these devastating floods in TN (as long as you live in the affected county):

1.  Payroll deposits due April 30 can be paid by May 17th now (the IRS’s fancy computers will automatically identify you if you live in the correct county and will apply penalty relief to your late payments).

2.  Most tax returns don’t have to be filed until June 29, 2010 now.

3.  Those affected by the floods can claim these losses on their tax returns as casualty losses.  And the IRS is going to let you either amend your 2009 tax return or wait and claim the casualty loss on your 2010 return. Check with your tax advisor – depending on your 2009 income or your expected 2010 income, it may be better to wait and claim the loss on your 2010 income tax return… it just depends.

Other Helpful IRS tidbits:

The IRS has a disaster hotline: 1-866-562-5227

Publication 2194, Disaster Losses Kit for Individuals

Publication 2194B, Disaster Losses Kit for Businesses

Reblog this post [with Zemanta]

Tags: , , , , ,

Tuesday Tax Time: Tax Credits From The Patient Protection and Affordable Care Act

April 20, 2010 in Business | No comments

A few Tuesdays ago, we talked about the overall Health Care Reform Bill.  There’s a lot in there!

Now, to give businesses a little more heads up, the IRS is sending out postcards to let the small businesses across the county know that they may be able to claim some credits on their 2010 (and 2011, 2012 and 2013) tax returns.  Real dollars in your pockets.

Here are some details:

1.  To get the tax credit, the small business employer must cover half of the cost of the employee’s health care costs,

2.  The tax credit is 35% of the employer’s contributions to the employee’s health insurance costs (will be 50% after 2013),

3.  Health insurance costs for 2% shareholders of the business and owners of sole proprietorships do not count,

4.  Small business employers with less then 10 employees will get all of the credit, as long as the average wage of all employees is less than $25,000 per year,

5.  The complicated credit is calculated on a sliding scale.  The credit starts at the amounts mentioned in #4 above and totally phase out when the employee count reaches 25, and the average wage of all employees reaches $50,000 per year.

Combine this credit with the benefits of the HIRE act, and you could get some real take-home dollars from hiring employees and giving them health coverage in 2010.  Don’t worry, rich people are going to pay for all of this!

Thanks, Jason M. Blumer

Download a pdf from the IRS with a little more info here!.

Tags: , ,