A Week in Perspective
Want to let everyone know that with the upcoming holidays and my need to catch up my readiness for this upcoming season, The will be no Week In Perspective on December 26th, or January 2nd.
I also want to let you all know that I have a very special post for you scheduled for January 4th.
Happy birthday to us! – Twenty years ago, five more-or-less young accountants went over the wall of a national CPA firm to start their own firm. They wisely discarded their first working firm name (“Dunderhead CPAs”) and settled on the name “Roth & Company.”
Not sure how I missed this:
Are You Ready For The Big Payroll Tax Deposit Change? – The IRS is changing the rules in a BIG way, when it comes to payroll and corporation tax deposits. Are you going to be ready for this new change? If not, you don’t have long to get ready! The new change goes into effect on January 1, 2011.
IRA Investment Planning for Taxation
3 Ways to Improve Your Credit in the New Year – Improving your credit quickly can be tough since the whole point of a credit history is to establish good financial trends – a pattern of paying off your debts. However raising your score over a longer period of time isn’t too tough if you consistently follow good money habits.
Why Don’t We Tip Everyone? – Earlier this week I asked my readers why they tip at the holidays. I was afraid a lot of you would read that, scoff, and say “Of course I tip my coffee barista! Every day!”. Of the few people that commented it seemed that everyone thought there was an appropriate time to tip (I agree) and sometimes it just doesn’t make sense to tip. But as I considered holiday tipping another thought crossed my mind. Why do only certain professions warrant the expectation of tips?
Everyone is Deserving, Right?
Friday’s Tax Quote – December 17, 2010 – “People don’t complain about taxes because they are selfish or stingy. They complain because they simply don’t believe they’re getting their money’s worth.”
- Zell Miller
Don’t Overlook This Easy Way to Put More Money in Your Pocket – If you have an employer, you might be offered a health care or dependent care flexible spending account benefit. Flexible spending accounts are one of those benefits that can make your eyes glaze over, because at first glance they don’t seem like a benefit. But they’re actually great, because when you take advantage of them you get to:
Are You on the Hook for Repaying Your Homebuyer Tax Credit? – In the wake of the financial crisis and the housing market crash, there were a number of efforts made to prop up the failing market. Among these efforts were tax credits for homebuyers, encouraging them to buy homes. However, not all the tax credits were created equal; in some cases, homeowners may be on the hook for repaying the tax credit.
Merry Taxmas! House OKs tax bill – In addition to keeping the current six tax rates that range from 10 percent to 35 percent, the bill contains a raft other tax breaks for both individuals and businesses. Many of the provisions relate to 2011, but there are some of the individual tax provisions that expired at the end of 2009 and were extended retroactively for the 2010 tax year:
- Alternative minimum tax (AMT) patch
- State and local sales tax deduction (itemizing required)
- Tuition and fees deduction
- Teachers et al write-off for $250 of out-of-pocket expenses
- Private mortgage insurance (PMI) deduction
- Direct donation of IRA money by older account holders
A New 2011 Economic Stimulus Package With Obama-Bush Tax Cuts and Unemployment Benefit Extensions – [Update - No New Taxes with Tax Extensions Approved] President Obama has signed into law a bill that covers an extension of all the bush-era tax cuts and additional tax benefits. With this legislation he has essentially created a new 2011 Economic Stimulus package, estimated at around $858 billion. Here’s how various key components of the “2011 economic stimulus package” legislation will affect you:
Estate tax extension through 2012: Nudging mama off the train in two years?
With Obama’s signing of the compromise tax deal yesterday, the really wealthy were among those who got an early tax present.
Some of the House Democrats railed against this latest version of the estate tax, but in the end, it passed.
For 2011 and 2012, estates worth $5 million or less won’t be taxed at all. For estate values greater than that, a 35 percent tax rate will apply.
Bush-rate extension passes; what it means – After a day of posturing, the extension of the Bush-era tax cuts ended up passing easily last night, 277-148.
So what does it do? Go to the above page for Joes great list of. . .
Also with More coverage of the final bill:
Robert D. Flach, TaxGrrrl, Tax Foundation, Kay Bell, Peter Pappas, The Blog that Inexplicably Hates Our LInks
Tax Bill Passes: What This Means for You – Here’s what’s in and out and what this means for you.
Boston Tea Party Anniversary – The Boston Tea Party was 237 years ago.
Steps To Stimulate A Recovery And Employment The Law Of Opposites
December 19th, 2010 Filed under: MBA Finance Jobs — Finance Author
As I wrote in 2008 on the financial crash, I was in the small minority that would have let the market crash. Now, you may be wondering what I meant then and mean now:
How do we distribute tax benefits for charitable donations? – I’m struck by the remarkable generosity of many of the low-income taxpayers at our Union College Volunteer Income Tax Assistance (VITA) site, who rarely get any tax benefits for their donations.
The AMT Effect for Individuals – For years, tax practitioners have been clamoring for a permanent fix to the AMT system. Ask a tax preparer about the late extension passed in 2007. If Congress does not pass the extension this year, it is estimated that 28 million taxpayers will pay AMT, with 82% of those taxpayers earning below $200,000. You will notice, that in 2009, 4.5 million were subject to the AMT.
2010 and 2011 AMT Tax Brackets – AMT is Alternative Minimum Tax. The Bush tax cut extension law officially known as the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (H.R. 4853) includes an AMT patch for 2010 and 2011. Congress used to patch AMT one year at a time. This time they did two years in one shot. That’s a 100% improvement!
How much are those New Year’s Eve babies worth?
A time to be born … a time to die – Playing the video while you read this post. And yes read the post. This is a great Article Mary.
“There’s no such thing as a free bike.” – Those “gift” bikes could turn out to be very expensive, because the IRS does not treat it as a “gift” but as a “taxable fringe benefit.”
It raises interesting tax questions.
Rentals and 1099s – Beginning in just a few days, landlords will have a new complication to renting their properties. As if dealing with renters who don’t want to pay their rent or trash the house when they leave isn’t bad enough, landlords will have to begin issuing 1099MISC to any service providers they pay $600 or more over the course of the year.
The new 1099 Requirement you MUST comply with in 2011 – Real estate investors take note: January 1, 2011, is the starting date for new 1099 Reporting rules. Effective January 1st, you must track payments you make to all businesses and individuals that you buy services from. Once you have paid $600 or more to any one business or person in connection with any kind of rental property expense, you’ll need to report those payments to the IRS, and issue each person or business a form 1099-MISC…
Form 1099 repeal fails yet again
While waiting for the Senate to get around to its final vote on the deal to extend the current income tax rates, the chair of the Finance Committee took another shot at repealing the new Form 1099 reporting requirement.
This tax task was devised as a way to help pay for health care reform. Specifically, businesses will have to provide 1099 information returns to each payee that the business pays $600 or more during the year.
How the Price to Earnings Ratio is Calculated – The price to earnings ratio (P/E ratio) represents a company’s current share price compared to its earnings per share. Commonly referred to as the earnings multiple, the P/E is commonly used by investors to compare and analyze stocks, as well as determine if a company is under or overvalued. There are many different versions of the price to earnings ratio which are often used to understand past, present, and future valuations.
TAX BLOGOSPHERE BUDDIES – PROF JAMES MAULE – Friday series of mini-interviews with fellow tax bloggers is Professor James Maule of MAULED AGAIN. A fellow “Wandering Traveler in the Internet Wilderness”, Jim has been a professor at Villanova University School of Law in Pennsylvania since 1983, and has been blogging since 2004. I enjoy reading Jim’s, appropriate for his profession, scholarly posts on tax policy. We have both made the extreme error of disagreeing with a certain multi-initialed blogger.
Social Security by the Numbers
Charge cards vs. credit cards: 3 reasons to charge it – The other day, someone asked me, if given the option, which I preferred: charge cards or credit cards. My answer: “There’s a difference?”
There is. And who knew?
(If you knew, kudos, because I always thought “charge card” was what our ancient ancestors – Mom and Dad – called the plastic we carry around in our wallet.)
Pre-paid credit cards: Why you should give them a second look – Today, it’s often difficult for anyone to get a credit card – whether it’s a zero percent balance transfer card or a best cash back credit card. And if you’re just starting out -or starting over – getting an approval based on your credit score can be even more of a hassle. This is what makes pre-paid cards so attractive if you want to use them for online shopping, travel or even just everyday expenses.
Reminder;
You can go to my company web site Tax Center page where you’ll find this year I have a Free Tax Organizer. You’ll need a .pdf reader to open this 14 page organizer. You can also find my Online Tax Organizer, used mostly by clients and/or those who will be clients.
Enter your email to subscribe to the L & R Tax Preparation monthly newsletter.
A Week in Perspective
HERE I GO ONE MORE TIME – This message cannot be repeated often enough
Don’t miss the Articles that TWTP is putting out over at mainstreet.com
How to Save the American Dream
IRS Increases Tax Deduction for Drivers
5 Money Moves to Make Before Year-End – I have thought about my finances and some things I need to do as the year comes to a close. There are tons of year-end money lists out there and they all talk about decreasing taxes, selling investments, and saving for retirement. There are a few other things I like to think about when the year ends.
“Be always at war with your vices, at peace with your neighbors, and let each New Year find you a better man.”
- Benjamin Franklin
Why None of Your Credit Scores are the Same – Many people are rather surprised when they look at their credit scores and see that they don’t match up. A credit score may differ across different credit bureaus, and those scores are often a little bit different than what you see when you get your score from FICO. Sometimes the difference is more than a “little.” In some cases, you might find that your credit scores vary by up to 20 points — or more. Why is this?
I try not to place things in here that promote advertising as the first thing you see when you get there but you need to see this article.
How To Instantly Increase Your Motivation For Sticking to Your Budget?
Tax Carnival #77: Stocking Stuffers 2010
2011 Mileage Rates Released – Despite the fact that many predict that the cost of gas will inch up to $4 per gallon by the holidays, the standard mileage rates for 2011 are just slightly different than those for 2010. The IRS has announced the standard mileage rates for 2011 as follows:
Free Spreadsheet to Track Business Expenses for Schedule C
I only lie to the IRS and my CPA, not to you! – Sometimes being too clever in doing taxes can come back to haunt a small business owner, as Steve Sink explains at IowaBiz.com:
How Do Banks Make Money? – Banks are in the business of money. Some companies sell goods and others sell services, but banks are in the money business. From credit cards to personal loans to mortgages, banks make money the old fashioned way. . .
Section 179: First, you have to have a business – The Section 179 deduction will be a huge part of year-end tax planning for countless business taxpayers this year. The ability to take a current deduction for the purchase of equipment that would otherwise be capitalized and depreciated opens many planning doors. But there are limits, as a Nevada tax preparer learned yesterday in Tax Court.
This weeks, must read – Struggling With an Ongoing Issue? Ask Yourself This
Are You Ready For The Big Payroll Tax Deposit Change? – The IRS is changing the rules in a BIG way, when it comes to payroll and corporation tax deposits. Are you going to be ready for this new change? If not, you don’t have long to get ready! The new change goes into effect on January 1, 2011. I got a letter from the IRS today that really surprised me. It said that starting on January 1st, I was no longer able to make manual payroll…
Opportunity is missed by most people because it is dressed in overalls and looks like work.
–Thomas A. Edison
And the big news last week: A proposal. . . .
THE FIRST STEP – It appears that BO has agreed to a final compromise with the Republicans to “get ‘er done” and temporarily extend the “Bush” tax cuts for two years.
How the Tax Deal Affects Taxpayers – President Barack Obama called the bipartisan tax agreement announced on Monday a “framework.” As yet there is no legislative language or even a comprehensive outline of the proposals, and its passage by Congress isn’t assured.
Small-Business Groups Parse Tax Deal – The trade group estimates that 75% of small-business owners pay taxes for their establishments at the individual level because those concerns are either S corporations, limited liability companies or sole proprietorships. Under the president’s proposal, such entrepreneurs would continue to be eligible for tax cuts available to couples earning more than $250,000 a year for at least the next two years.
What to Do With a Payroll Tax Cut – Working taxpayers will get a little, temporary raise, if the payroll tax reduction in the tax agreement reached by Congress goes into effect. It’s not life-changing money – the benefit tops out at $2,100 per year for anyone making $106,800 or more – but it is enough to have a ripple effect if used wisely.
Bush Tax Cuts Extended As Part of Unemployment Insurance Extension and Payroll Tax Deal
Payroll Tax Cut and Social Security Benefits – News came President Obama and Republicans agreed to a “payroll tax holiday” in 2011. For one year only, an employee’s portion of the Social Security tax will be reduced from 6.2% to 4.2%. This will replace the Making Work Pay tax credit in effect in 2009 and 2010.
Obama Woos Wary Party on Tax Deal – Democrats criticized the broad tax package for cutting taxes on high earners and setting tax rates too low on large inheritances, as well as for its effect on the country’s budget deficit. But Democrats also said they didn’t yet see a revolt spreading so far that it would derail the agreement in the Senate. Prospects for passage are more uncertain in the House, where many liberal members are balking at planned changes to the estate tax.
Defiant Obama defends tax cuts, eyes 2012 – WASHINGTON (AFP) – US President Barack Obama has come out fighting, urging Democratic allies to back a hard-won compromise deal on tax cuts and putting Republicans foes on notice ahead of the 2012 elections.
In face of criticism from many on the left of the Democratic Party, Obama passionately defended the deal that will see tax breaks extended for the wealthiest Americans saying his critics had to take a long-term view.
What the Tax Deal Means for You – The entire package would cost about $900 billion over the next two years, and would be paid for entirely by adding to the national debt. Here’s what it means for your pocketbook (this information was culled from our main story; we’ll update with more details later):
And you must read this from Kelly!
The Morning After: The Tax Deal Hangover – I’ll admit that I didn’t see yesterday’s tax deal coming. I was fairly certain that the drama would play out through this week. We still have drama but now it’s more of the “let me explain” variety.
Let me see if I can sort out for you what happened and why.
Why the Tax Compromise is a Mistake – Compromises often are defended as beneficial because both sides to a disagreement surrender something or some things, and both sides get something or some things. But there are times when compromise is a mistake.
Tax Package Makes IRA Conversions Easier
Bush Tax Cuts Likely Will be Temporarily Extended
Compromise Reached on Taxes; Will It Pass Congress?
And by all means please remember this is a tentative deal with Congressional Republicans to extend the Bush-era tax cuts at all income levels for two years as part of a package that would also keep benefits flowing to the long-term unemployed, cut payroll taxes for all workers for a year and take other steps to bolster the economy.
Please. . . use your head. Think responsibly.
“Why does a slight tax increase cost you two hundred dollars and a substantial tax cut save you thirty cents?”
~Peg Bracken
Get Ready for Tax Filing Season – Part 1: Reporting Employee & Contractor Wages
Get Ready for Tax Filing Season, Part 2 – New Laws & Credits that Impact 2010 Returns
What Does 13 Months of Extended Unemployment Mean? (Not What You Think.)
Increasing Your Business Confidence – We need outside proof to build confidence. When someone says that we are smart, talented, or amazing we can look back on those things as examples of our awesomeness. It can take someone else to give us proof of our own talents and amazing abilities.
Mortgage tax break in the crosshairs – Charged with finding ways to reduce the nation’s exploding federal debt, the bipartisan debt panel recommended Wednesday a wide range of controversial spending cuts and tax changes that would slash $4 trillion in deficits over the next 10 years.
Among the proposals was a major change to the mortgage interest deduction, which costs the Treasury Department an estimated $131 billion a year.
I have a few interviews working right now and they are scheduled to post. I am interviewing PF and tax bloggers alike. They won’t start posting until 2011. My first interview will post on Jan 3rd. In the meantime please check out TWTP weekly event, Tax Blogosphere Buddies, a weekly series of brief introductory interviews with some of RDFs favorite fellow tax bloggers, which will appear every Friday. I was lucky enough to be first.
Check it out.
TAX BLOGOSPHERE BUDDIES – BRUCE MCFARLAND
Asset Allocation for a 529 Plan
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – The tax blogosphere has been a-BUZZ the past few days with postings on the idiots in Congress still arguing over BO’s compromise tax package. The problem appears to be with House Democrats who feel that the new Estate Tax exemption and rate is too generous. Quick answer and easy fix – return the federal estate tax to what it was for 2009 for the same two years as the rest of the “Bush” tax cut extension.
If you are interested you can check out the blogs of Kay, Kelly, Joe K and A, Russ, and others for the specific details of the fight.
21 Million Effected – 21 million are the number of taxpayers who didn’t pay AMT in 2009 but will in 2010 unless Congress does something constructive.
Pros and Cons of Giving Gift Cards This Holiday Season
SSA Revises Withdrawal Policy – On December 8, 2010, the Social Security Administration published a revision to their “withdrawal policy”, which we talked about in detail in the article “The Ultimate Do Over”. It’s important for you to know what has changed about this rule, especially if you have been counting on this in your planning for Social Security benefits.
10 Expiring Tax Cuts to Watch For – The expiring Bush tax cuts – and what will happen to them – are all over the place these days. Folks seem to have very definite opinions about what should (and shouldn’t) happen. But it also seems like, for all of the publicity over the cuts, taxpayers really don’t understand what it all means.
Banks or credit unions: Which will give you the best bang for your buck?
Contract Accounting Becoming Hot Option – Contract accounting, hiring a CFO or controller on a part time basis to do what your full time book keeper does? Hiring someone who is a specialist in contract accounting could save you big bucks and lots of headache. Jason Hermanson tells us why.
Year-end tax moves, December 2010 part 1
Year-end investing moves, Dec. 2010 part 2
Year-end retirement moves, Dec. 2010 part 3
Year-end giving moves, December 2010 part 4
Okay I really don’t like using this as a plug or even a pimp my practice for clients place however I have a new ad running with one of the local stations here. It is part of their web site dedicated to different areas around Kansas City. Feel free to check it out. I’d really enjoy your feedback on it. What you liked or don’t.
And for my clients in other states, the coupon will applies to you as well. So long as it accompanies your information
Just a reminder, you can go to my company web site Tax Center page where you’ll find this year I have a Free Tax Organizer. You’ll need a .pdf reader to open this 14 page organizer. You can also find my Online Tax Organizer, used mostly by clients and/or those who will be clients.
Enter your email to subscribe to the L & R Tax Preparation monthly newsletter.
A Week in Perspective
“Ah, how good it feels! The hand of an old friend.” – Henry Wadsworth Longfellow
A loophole big enough to drive Robert D. Flach through – New proposed regulations on the requirements for preparers to e-file tax returns will be good news for hand-prepared return holdouts like blogger/preparer Robert D. Flach. The regulations appear to require paper-preparers to e-file only if they will be actually mailing the tax returns.
Waiver to e-File. – Yesterday the IRS released Notice 2010-85 with the proposed rules for a tax return preparer to get a waiver from e-filing. In November of 2009, Congress mandated preparers to electronically file their client’s returns if they prepare over 10 returns. The IRS decided to phase this in and for 2010, the rules apply to preparers who file over 100 returns. In 2011, the threshold is down to 10. The IRS has developed two kinds of exemptions and finally released the details and procedures for requesting a waiver.
Chocolate: Good News. Bad News. Tax News? – Several news stories during the past few weeks have inspired me to write about chocolate, . . . .
. . . . It’s disappointing how lawyers and tax practitioners can make something as wonderful as chocolate the focal point of legal arguments and tax debate.
THE WANDERING TAX PRO: TAX HISTORY – 1643, 1861, 1872, 1894, 1895, 1913, 1916, 1917, 1918, 1922, 1932, 1935, 1941, 1942-1945, 1953, 1954, 1961, 1964, 1970, 1972, 1974, 1975, 1979, 1981, 1984, 1986, 1987, 1990, 1993, 1998, 2001, 2003.
Lock ‘em In. – the best post of the week, and by far the best idea I have heard.
Oprah, cars and taxes … again!
Tax Consequences of Oprah’s Latest Car Giveaway – One of the highlights of my income tax course is the hilarious 5-minute video of Jon Stewart’s Daily Show segment on the tax consequences of Oprah’s 2004 giveaway of Pontiacs to her studio audience:
Oprah was back at it last week, giving away to her studio audience a 2012 VW Beetle, a $1,000 Nordstrom gift card, an iPad, and a limited edition Oprah 25th anniversary watch from Phillip Stein encrusted with 58 hand-set diamonds, among other things:
Oprah apparently learned her lesson from the 2004 tax fiasco, with Volkswagen and Oprah agreeing to pick up her audience members’ tax bills:
House approves extension of middle-class tax cuts in symbolic vote – Here’s today’s not news flash. The House this afternoon wasted dwindling legislative time voted 234 to 188 for legislation to extend some of the expiring Bush tax cuts.
The bill now goes to the Senate where it will die.
I need to get some of these back into my Quotes; SPEAKING OF TAXES
How to Lower Your Heating Bills This Winter – The chilly season is upon us. If you live in North America, you’ve probably had at least a few cold nights by now. Up in my neck of the woods — in the Boston area — we’ve had our central heat running for a few weeks. Which means we’re in full swing winterizing, with an eye to keeping the heating bills low.
15 Year End Tax Deductions To Remember Unless You Want To Give The IRS a Tax Free Loan – As the year draws to a close it’s always a good idea to review your tax situation and in light of that, we have put together a collection of fifteen tax deductions worth considering to lower your overall tax bill. But act soon, because if you wait until next year to evaluate your current tax status, it may be too late to qualify for some of these widely available tax credits and deductions.
Should you pay off credit cards with a home equity line of credit?
Your tax accountant can make or lose you more money than any person in your life, with the possible exception of your kids ~ Harvey Mackay
3 Unconventional Investment Moves to Make in 2011 – All of us know about conventional investment movements once they become popular. In the late 90s, it was stocks. In the mid-2000s, it was real estate. Some are now saying that the next hot trend is gold. Riding these trends can be highly profitable, if you get in at the right time.
The problem with following trends is that the easy money is usually made before the trend gets very popular, and once the trend becomes more about popularity than about investing fundamentals, and more about buying in the hopes of flipping on the investment to a greater fool than about buying based on fundamentals, then that might be a sign that things are getting dangerous
Corporate Tax: there is no good or evil. There are only incentives, and those too weak to lobby for them. – Ultimately, I think the only real measure of a tax avoidance strategy is whether it’s legal, not whether it’s consistent with the “spirit” of the law, whatever that is. The whole notion of the law’s “spirit” assumes that tax loopholes appeared in the law by accident. As opposed to being secreted there deliberately by well-paid lobbyists and their congressional allies. Often, the spirit of the law is tax avoidance, not tax payment.
2011 STANDARD MILEAGE ALLOWANCES – The Internal Revenue Service today issued the optional standard mileage rates that are used to calculate the deduction for business, medical, moving, and charitable use of an automobile in 2011.
The middle-class tax hike nobody’s talking about – Are you ready to give up $30 a month?
That’s what may come out of your paycheck if — as expected — the Making Work Pay tax credit expires at the end of the year.
The credit was enacted last year as part of the Recovery Act to put more cash in people’s pockets. For the past two years, it has boosted paychecks by up to $400 for single filers and $800 for joint filers by reducing the tax withheld and giving a credit for that amount. That’s $33 or $67 a month.
Being Bad to Customers is Bad Business – This is a must read.
CPAs & Financial Planners / Relationship Growth – Many CPAs are taking a more holistic approach with their clients and their financial needs. The number of CPAs that are performing financial planning for clients is growing. Currently the PFS (Personal Financial Specialist) designation afforded only to CPAs by the AICPA is growing by about 5% a year. Many clients who don’t have a financial planner do have CPAs, and they trust them with their money. From what I have seen, there are positives and negatives to this.
Low interest rates on savings accounts at least mean less taxes -
College a necessity? – . . . the price of college cannot keep going up at the rate it’s been going up. It has gone up exponentially while people’s incomes have not, college costs have outpaced inflation. At the rate it’s going up tuition at a private university will hit $100k in less than 20 years. Who really can afford it?
Saving Money From the Comfort of Your Living Room – Before online shopping became popular, you’d have to patiently sift through the Sunday newspaper to find the latest coupons or drive out to the stores to see if they had any ongoing coupon promotions. Those days are now behind us as it’s possible to get the best online coupon deals to save money from the comfort of your living room.
Building Credit From Scratch – Are Young Adults Doomed for Financial Failure? – Young adults are faced with a unique set of challenges that cause many to struggle with credit. Inexperience, school loans, social pressures, and financial optimism all lead down the path of least resistance – a really bad credit score. However, it’s important to remember that there are long-term consequences of bad credit, and restraint today can pay off big time down the road.
Six year-end financial tasks – Here are a few tasks that are worth doing to tie a financial bow on 2010:
Notice Gives Guidance on In-Plan Roth Rollovers – On Friday, the IRS issued guidance on how plan participants can make rollovers from a 401(k) or 403(b) plan to a designated Roth account in the same plan (Notice 2010-84). Such in-plan Roth rollovers are now permitted under IRC § 402A(c)(4), as amended by the Small Business Jobs Act of 2010, effective for distributions made after Sept. 27, 2010.
Living off of Cash, Not Credit? – I’ve been weighing the pros and cons of using credit cards and wanted to see what you guys think on the subject.
Durbin Says U.S. Debate to Go Beyond Bush Tax Cuts – Senator Dick Durbin of Illinois, the senate’s No. 2 Democrat, said negotiations over extending the Bush-era tax cuts also will include prolonging emergency unemployment benefits and other tax credits.
Substantiation rules for out of pocket charitable expenses?
Online Sales Changing the Tax Game – Forty-five states rely on sales taxes on goods and services as part of their annual state budgets; the exceptions are Alaska, Delaware, Montana, New Hampshire and Oregon. Rates range from 4% to 8.25% at the state level, with local additions boosting rates to over 10% in some municipalities. That should translate into a combined boost of over $1 billion in sales taxes for those states that do charge sales taxes — not a bad haul by any standards.
However, state and local governments shouldn’t start spending those dollars yet.
The Impact of Zero Years – Remember when we talked about how your Social Security Benefit is calculated? Your highest 35 earning years during your career are put into a formula, and the earnings are indexed, then averaged by dividing the result by 420, the number of months in 35 years. And if you have less than 35 years of earnings, those years become zeros…
10 Steps to Small-Business Success in 2011 – Economists say the Great Recession–the longest and deepest since World War II–ended 18 months ago and that the U.S. economy is, in fact, growing again. But growth is relative. Even the rosiest economic forecasts for 2011 come in well under 3 percent growth. Unemployment is still high, and consumer spending is still sluggish.
That doesn’t mean sit and wait for things to improve. Rather, retool for the economy that exists today, and will be lingering for many tomorrows. Here are 10 places to start.
Lost, Harry Potter, and Accounting
Year-End Tax Planning in 2010 – The Wall Street Journal has a good summary of some year-end tax planning issues and strategies given the uncertainties about federal tax liabilities in 2011. Two of the points are of particular interest: capital gains/losses and 401(k) conversions.
CBO: Trends in Federal Tax Revenues and Rates
Smart Year-End Tax Moves for Investors – There are plenty of reasons for taxpayers to scream. Here it is, year-end tax-planning time, when investors must decide whether to take gains or harvest losses and make important retirement-account choices. Yet crucial questions remain—not only about next year’s tax law but also about this year’s.
Business owners, this one should make you re-think. Making Room for Reflection Is a Strategic Imperative.
Texas CPAs suggest toys that teach children about saving, budgeting, investing – With many people facing challenging financial situations and an economy desperately trying to rebound, the Texas Society of Certified Public Accountants (TSCPA) believes this holiday season is the perfect time for children to learn the importance of money-mindedness with affordable toys and board games that won’t break the bank.
Four Key questions to Ask Yourself Before Starting a Small Business – If you have always wanted to start a small business, you are not alone, the majority of working adults have thought about starting their own business but most simply don’t follow through because they don’t know how.
IRS commissioner chides Congress for its delay in dealing with expired taxes – The Bush tax cuts that expire Dec. 31“Marcia, Marcia, Marcia” of tax legislation. Everyone is fixated on what individual income tax rates will be in 2011. But more pressing, says the head of the Internal Revenue Service, are the laws that have already been stricken from the tax code. Lawmakers swear they’ll get to the lapsed tax laws. And I’m sure they will. Eventually. But it’s the precise timing of reinstated tax laws that could pose big problems for the IRS and, in turn, for us taxpayers. are the
Getting Tax Breaks from Paying for College – even if you’ve shelled out a ton of money for college, the government does help out a little. Several tax deductions and credits can save you years of payments.
6 tax breaks that anyone can claim – Tax deductions and credits aren’t just for big companies and finance-savvy folks. Look over the list below; you might be surprised how many tax breaks — in the form of both credits and deductions — can be applied to your tax return.
Your New Little Tax Deduction! – Having your first child is an exciting time in your life and I’d like to congratulate you on the birth of your newborn. Along with the rest of the changes this new responsibility brings there are also many parts of the tax code that will impact you financially.
Billionaire Warren Buffet Says the IRS Should Raise Your Taxes! – Well…maybe not your taxes, unless your among the wealthy taxpayers (most of whom fully support the Bush Tax Cuts for obvious reasons). In contrast to most, Warren Buffet fully supports letting Bush Tax Cuts for upper-income taxpayers expire.
Do The Wealthy WANT Tax Cuts? - According to this Philadelphia Inquirer article, “more than 400 U.S. business owners and professionals signed a petition [more here]” asking Congress and the Administration to let the Bush tax cuts for the wealthy expire. Some of the thoughts expressed by several of the people who signed the petition mesh with arguments I have been advancing for the past several years.
What to Consider When Giving a Holiday Bonus – Holiday bonuses can go a long way to making employees happy, but this year’s cash or gift will set the stage for next year’s. Here’s what to consider when choosing a holiday bonus.
End of Year Tax Tips for Investors -
Got liquid assets like mutual funds or planning to buy them? Your investments will need some tending before the year comes to an end to make sure you’re following a good tax strategy. Congress’ indecision on tax rates is making this a particularly tricky year.
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’
BlogRoll Beans Early Snowfall Edition
Just a reminder, you can go to my company web site Tax Center page where you’ll find this year I have a Free Tax Organizer. You’ll need a .pdf reader to open this 14 page organizer. You can also find my Online Tax Organizer, used mostly by clients and/or those who will be clients.
Enter your email to subscribe to the L & R Tax Preparation monthly newsletter.
A Week in Perspective
“For myself, I am an optimist – it does not seem to be much use being anything else.”
- Sir Winston Churchill
As I work on building my business I realize I can easily say the same thing.
As the year draws near it’s close so does our tax year 2010. Many have asked, about my organizer. It is now up. You can go to my company web site Tax Center page. There on the right hand side you’ll find Online Tax Organizer, used mostly by clients and/or those who will be clients. This year I also have a Free Tax Organizer. You’ll need a .pdf reader to open this 14 page organizer. While on the Tax Center page, be sure to check out all the other great things I have there. As January draws closer I will be adding many other helpful aides including my famous Fair Market Value guide.
Not much here as the week was very short for me:
Top 50 Blogs for Tax Tips and Advice – The old saying is that death and taxes are the only certainties. However, tax law is always changing. In fact, in some cases it takes a tax professional to help you understand the process. People go to school for years to learn the ins and outs of tax law — and then they have to If you are looking for some direction with your taxes, you can find some advice on the web. You need to be careful of where you get the information, but you can get a good start on learning some of the basics when you read these 50 blogs on taxes: Thanks to everyone, The Missouri Taxguy made this list.
New rules for rental property owners – Searching for some clarity on the new rules for rental property owners? Then follow these tips from personal finance expert for women Christine Parker, CFP® to help you better understand the expanded reporting requirements.
Under Audit? What Every Taxpayer Should Know About IRS Tax Audits – “I recently read an article on CNNMoney.com written by Beth Braverman titled “5 things to know about getting audited.” I am always looking for helpful resources for my readers, so I wanted to share this IRS tax relief advice with you. Here is a quick summary of the 5 tips discussed in the article.”
Should You Save Money or Pay Off Debt? – After a few years of being down, many of us are finding ways to get our finances back in order. While some extra money in your pocket is great, understanding what to do with it is a different story. Our friends, family members and of course random personal finance bloggers are telling you that you need to save more money, but is it smarter to save money or pay off debt with it?
DON’T ELIMINATE THESE DEDUCTIONS – Many of the tax reform proposals that are surfacing recommend eliminating the itemized deduction for local real estate and state and local income or sales taxes. Some also call for doing away with the deduction for mortgage interest; one wants to replace the deduction with a 15% credit.
Warren Buffet Says Tax the Rich More – Warren Buffet tells Christiane Amanpour that the wealthy should pay a “lot more” in taxes in this clip from an upcoming interview on “This Week with Christiane Amanpour.” Buffet does, however, advocate cutting taxes for those in the lower brackets.
Relocating? You May Need to File Two State Tax Returns – People who relocate from one state to another likely will need to file two state tax returns. Tonya Moreno, CPA, explains how to file two partial year state returns and split your income and deductions between the states where you lived during the year.
ANOTHER BROADWAY TRIVIA CONTEST!
When Things Don’t Go As Planned – We all encounter unexpected setbacks from time to time, which can include things like medical bills, car repairs, layoffs, etc. Of course, having a good emergency fund helps with many unexpected setbacks, but sometimes it’s easier to roll with the punches than others.
Will Your Site Survive the Google Shrink Ray? – I found this a very interesting article and one that I will reference. Remember the three-second rule for websites? The one that said that your visitor will decide within the first three seconds whether or not they’ll stay on your site? Forget that: it’s now the 0.3 second rule. Does your site have what it takes to make the cut? Let’s find out. (And if not, let’s get it fixed). I go to websites, especially a blog I intend to see an article. I hate it very much when my 21 inch wide screen is filled only with the title of the post and a bunch of ads or links to other sites that sell crap. I usually close that page. Sadly I am sure I am missing some great information because some blogger with great insight would rather make money then inform their readers on their subject.
Year-end business tax moves to celebrate Small Business Saturday
Bloggers, this is a must read for you.
Why Link? 7 Reasons to Share Link Love – My readers notice this and like it. In fact, at BlogWorld one attendee said she learned of a terrific blog through my weekend sharing, but asked me why I try to make such a point of it? “Why link?” she asked? “Isn’t it spamming to link outside all the time? Why can’t you just share it on Twitter or something?”
Glad she asked…
Shape Up Your Finances – This is from a recent article published by TurboTax. It gave readers advice to, among other things, reach your fitness resolutions for the year. I think these tips apply to your business’s financial fitness as well. Here is what they said: {. . . .} Here is what I say:
The 25 Most Influential Finance Bloggers You Should Know – f you’ve wandered around the personal finance blogging world for any length of time, you’ll soon discover there are some pretty big names, and influential bloggers out there! Many of them have written books, appeared in the media, and have spoken at various events and workshops! If you haven’t been around the personal finance blogging world, then you may not have had a chance to read and experience these great bloggers.
LinkedIn’s New ‘Company Pages’ Showcase Products, Recommendations – LinkedIn has released a new version of its company profiles called “Company Pages,” which provides a place for businesses to “showcase their products, services and associated recommendations,” according to LinkedIn. Heretofore, LinkedIn company profiles served only a research purpose that helped users find companies to work for and engage in business. With the introduction of a new tab called “Products & Services” the once sedate profile takes on an entirely new social commerce role.
I like the new site design Trish –
Unreported Tip Income – Employers – Generally, when I think about unreported tip income, I think of the employee who doesn’t report to their employer the full amount of their tips so that they don’t have to pay tax on them. But the truth is that many employers only allow their help to report a set amount or none at all. That way they don’t have to pay the FICA on the tips. But employees are required to report tip income on their tax return that were not reported to their employer. This is done through Form 4137.
IRS decision key to January tax hikes – The IRS is waiting, just like the rest of us, for Congress to act on the expiring tax rates. As I mentioned in my post last week, the IRS can’t just take Congress’ word that it will do its job. The agency operates under the tax laws as they now exist.
That means the Bush tax cuts will expire and withholding tables for 2011 will reflect that.
And that means smaller paychecks as next year’s withholding calculations account for higher taxes for us all.
Tips on Managing Your Accounts Receivable – Having Accounts Receivable i.e. amounts owing by customers is both good and bad. It’s good because it means that you have sales and customers. It’s bad because it is cash that you don’t have now, and there is always a possibility that you won’t collect. When you offer credit terms to your customers it is extremely important to have a system in place to manage your accounts receivable. It is difficult to collect amounts due when you don’t actually know how much you are owed or when it is due. Having the information at your fingertips (this really relates to any kind of information) also makes a great impression. Below are some steps to help manage and collect on your accounts receivable:
Letterman – Top Ten Things I’ve Learned From Being An Accountant
How Will the New IRS Audit Program Affect Your Small Business? – Has your business ever been audited by the IRS? Just hearing those words can send a shiver of fear down any entrepreneur’s spine. Unfortunately, small business owners have more reason than usual to be nervous about opening their mail for the next few years thanks to the IRS’s Employment Tax National Research Project (NRP).
10 Surprising Ways a Small Home Saves You Money – It is fairly obvious that buying a small home is going to be a cheaper decision than buying a large home. The total amount of money that you will pay to purchase the home is lower (assuming that the homes are otherwise comparable). Additionally, the smaller size means that you will have lower energy bills so you will save a lot of money on utility bills over time. But there are actually a lot of other small and surprising ways that a small house can save you money. That’s something to think about when deciding what size home you want to buy. Look at these ten potential money-saving features of choosing a small home:
5 Tips for Taking Vacation From the Home Office
Tips to consider when making year-end estate planning decisions – Big changes are coming to the estate tax in 2011 with or without Congressional action. At the end of this year, the estate tax reform passed in 2001 is set to expire. Lawmakers still have not made up their minds what to do about estate tax reform. Given this uncertainty, following are tips from Grant Thornton LLP to keep in mind for planning:
The Buck Stops Here – The phrase “the buck stops here” was made famous by President Harry Truman. It essentially means that you won’t pass the buck to anyone, but will be responsible for making the decisions. I happen to believe that “the buck stops here” is one of the keys to improving your financial life.
Funny Tax Videos for the Thanksgiving Weekend
How a Recession Changes the Rules for Executive Staffing – The days of vice-presidents in every department and huge holiday bonuses have come to an end. For those who benefited from those practices, that is bad news for you. For those who run companies that once had that type of set-up, you now have an opportunity to make positive changes to improve your bottom line. The corporate structures of yesteryear, if used in today’s economy, will lead you straight to the poor house, along with all of the hard-working men and women you employ. The recent recession has changed all the rules, especially when it comes to executive staffing.
Big 1099 Changes in 2011 for Business Owners and Rental Property Owners – Beginning in January 2011, if you pay any one person or company more than $600 in a year to provide you with either goods OR services, you’ll need to track that information and issue that person/company a 1099-MISC in 2012. You can thank the Patient Protection and Accountability Act (PPACA) passed in March of 2010 for this new rule. Under the old rules, you only provided 1099-MISCs to service providers who met the $600+ threshold, and…
3 Steps to Avoid Form 1099 Penalties
Read This Before You Hire a Financial Advisor – While managing your finances is certainly not an easy task, personal finance at its most basic level is simply making sure that you are earning more than you are spending, and that your savings will be able to carry you through life after you’ve stopped working full-time. Even though it sounds simple enough, there are a lot of moving pieces to balance in a financial package, including investments, insurance, credit cards, mortgages and more. And with the global economic downturn humbling many of us, more and more people are turning to outside advisors for personal finance help. But even hiring outside help can be confusing if you don’t fully understand what you’re getting yourself into, and it’s certainly not cheap. So before you pay someone else, your time and effort is probably best spent uncovering the answers to some basic questions and gaining a deeper understanding of your inclinations, your financial habits, and what you can do to control them.
U.S. tax expatriates expanding – Have you ever seriously considered giving up your United States citizenship to avoid paying the IRS? Apparently more Americans are doing just that. The Financial Times of London reports that three times as many Americans renounced their citizenship in 2009 as did in 2008.
10 out of 9 accountants can’t count – There are basically three types of accountants: those who can count and those who cannot. But who needs to count or add anyway? We have the sum command in Excel and calculators that can fit in a shirt’s pocket. We don’t need to foot or cross-foot any longer: QuickBooks never fails to produce a trial balance displaying the equality of debits and credits, except for that one client in Toledo.
A Week in Perspective
It would seem that while I was out of town last week I had a lot of extra time to look around. Surf the net if you will. This weeks perspective is the largest I have ever posted. I hope you all have the time to enjoy each site as the information is as always well worth the read.
Finding Work You Enjoy – Recently asked if folks would take a pay cut for happiness. Not surprisingly, many people said that they would. While I’d also be willing to take a pay cut to increase happiness, I’d rather take a pay increase, and/or make my job more enjoyable. In other words, I think there are usually other options
And My favorite post this week has three videos.
If Anyone Wonders Why the Economy Isn’t Adding Jobs – All I am going to say here is Read it and watch the videos. Oh, Russ I’d like to know where do you get these videos?
This weeks must read
CASE IN POINT – By reducing one’s AGI one can often increase a multitude of deductions and credits and reduce taxable Social Security or Railroad Retirement benefits. Here is an excellent case in point.
Verify the Background When Hiring a Bookkeeper – Always follow your gut instinct:-if something doesn’t feel right, it probably isn’t! Always verify the background and skills of anyone you hire to handle your books before they begin work.
How and When to Say No to a Client – We’ve discussed saying no to potential clients before, but the post was focused on how to recognize bad clients and/or bad projects and deadbeats. While it’s definitely important to pay attention to the red flags that may be telling you that a prospect or a project is a dud, there are other times you may find yourself refusing work.
Here are some instances when you may decide to turn a project down:
Lame Duck, Lame Duck, Goose! – Nothing is quite so exciting as a lame duck Congress. And I mean that in the most snarky, sarcastic, rolling of my eyes kind of way.
How Getting Married Affects Your Taxes – When you get married, your tax situation changes – for better or for worse – and there are decisions to make regarding how the two of you should file. Here are the most important things to know.
If your first 2011 paycheck is smaller, thank, er, blame Congress – the payroll withholding tables for 2011 that employers (or payroll companies that workplaces outsource the job to) are now based on what the law will be in January.
“Many of life’s failures are people who did not realize how close they were to success when they gave up.” – Thomas Edison
ITEMIZED DEDUCTIONS: A COMPLETE GUIDE TO SCHEDULE A – a new comprehensive special report that discusses just about everything that is, and is not, deductible on the 2010 Schedule A.
In it he discusses –
- Deducting Medical Expenses,
- Deducting Taxes,
- Deducting Interest,
- Deducting Contributions,
- Deducting Casualty and Theft Losses, and
- Deducting Miscellaneous Deductions
Spend the money. You need this. I was allowed to review this and it is the best information you can find.
The Case For (and Against) Killing the Mortgage Interest Deduction – he chairmen of the president’s deficit commission skewered a number of sacred cows in their widely discussed, and widely criticized, report. But few ideas have received more outrage than the plan to limit the mortgage interest deduction — the costliest tax giveaway in the United States. What is the mortgage interest deduction and why should we want to reduce it?
Why Clients Cling to the Stock Market—Even When They Suffer – Why do people stay in the stock market even when they take losses? What is the psychology behind this dilemma? A financial planner must understand this psychology.
Retirement Planning Strategies – The strategies you use will depend on how far away you are from possible retirement, your expenses, the tax bracket you expect to be in, what you expect to be able to do once you’ve retired, and how long you believe you might live. (With so many variables to consider, getting professional, customized advice is a great idea when it comes to planning for retirement.)
Meanwhile, here are a few government resources that may get you thinking:
Retiring Early? – Okay let’s be honest here, how many people my age are actually going to be retired at 50 or 55? I got into it with my mom this weekend because the TRUTH is pretty much none. And an even bigger truth is that people my mom’s age of 58 can’t AFFORD to be retired like her because they don’t have the awesome pension and medical plan she has. Bottom line? She’s the last of the dinosaurs.
Year-End Tax Planning – Going Against Conventional Tax Knowledge? – For years, we accountants have advised clients to “defer income” and “accelerate expenses.” The thought behind this strategy is that it is better to pay tax next year than it is to pay it this year. In most years, under most circumstances, this approach makes perfect sense. But. . .
Some Thoughts on Passive Personal Finance Barriers – there are many opportunities to utilize passive barriers in your own financial life. I certainly use them in my own life in order to subtly push myself into good financial habits. Here are nine passive barriers you can utilize in your own life to encourage better financial results:
How to make sure your QuickBooks Company File agrees to your tax return – You may not even be aware of it because your CPA very possibly makes an adjustment without even bothering you about it, but it is very possible and in my experience very likely that each year when you submit your QuickBooks Company file or your profit and loss and balance sheet to have your tax returns prepared the Retained Earnings Account does not reconcile.
Impulse Control – Breaking free of such impulses can have a very large and dramatic effect on your finances. It becomes easier to budget and plan ahead. You suddenly have more resources each month with which you can save, pay off debts, or invest for the future. Best of all, you find that you value the things that you do buy a lot more than you used to.
5 tax moves to make now – Everyone’s talking about what taxes might look like in 2011. Quit worrying about future IRS bills! Make some tax moves now that could lower what you’ll owe Uncle Sam on your 2010 income tax return. Here are five easy ones.
2 Child-Care Tax Breaks So You Can Go to Work – As many parents know, it can cost money to go to work. Those with kids under the age of 13 may have to set aside a little extra for childcare expenses. Fortunately, a federal income tax credit can help pay the bill. It’s available to all eligible parents, regardless of their income (although lower-income folks get bigger credits). You might also be eligible for your employer’s childcare flexible spending account plan. When the FSA deal is available, it can be a bigger tax-saver than the credit. Here’s what you need to know about both breaks.
How to Survive the Holidays without Wiping Out Your Savings Account – It’s almost that time of year again. I’m not talking about gingerbread houses, cocoa, and caroling; I’m talking about shopping, impulse-buying, digging ourselves into more credit card debt, and raiding our savings accounts. We undoubtedly lose a bit of sanity, self-control, or both when it comes to holiday spending.
How to Keep Your Identity – and Your Credit – Safe While Shopping – Each year more people are becoming victims of identity theft. When this happens, it could take years for the person to regain their rightful identity and their good credit standing. And the bad news is that identity thieves are getting much more sophisticated about identity theft and will stop at almost nothing
How to Avoid Identity Theft and Protect Your Finances – One of the hot financial topics today is identity theft. And if you think it can never happen to you, you are wrong. According to the Federal Trade Commission (FTC), there were 1.3 million people falling victim to the crime, which accounts for 21% of total complaints.
Tax cuts outlook spurs Roth conversions – It’s looking more likely that the expiring Bush tax cuts will live at least a bit longer and that’s starting to have a domino effect. Take Roth IRA conversions. With the elimination of the $100,000 income cap, anyone can now convert a traditional IRA to a Roth.
How to Start Investing (with $1,000 or Less) – I want you to know that it is possible to get started with investing, even if you don’t have a huge amount. I’ve included a small guide on how you can set up an IRA and maintain your contributions. Hopefully you can use it as a jumping point and build from it.
Finding Money to Invest – I know your type. You always say you’re going to start investing for your future once you have just a little extra money in your account. The problem is time keeps passing by and that extra money always seems to end up somewhere else!
Not Sure About a Roth Conversion in 2010? Don’t Fret – As you’ve undoubtedly seen EVERYWHERE, 2010 is a special year with regard to Roth Conversions. This is due to two changes to the law that took effect this year: 1) the income limit on Roth Conversions was lifted – previously if your MAGI was greater than $100,000 you couldn’t do a conversion; and 2) there is a special provision for 2010 conversions that allows you to spread the tax over 2011 and 2012.
Take your Required Minimum Distribution – RMD – RMDs dictate when tax sheltered retirement plans should end. This is because congress did not intend on allowing retirement plans to be major multi-generational wealth transfer vehicles. With the concept of the stretch IRA you can push this to the limit, but still have to contend with a required annual distribution.
More Tricks to Get Going: Saving Enough for Retirement!
Making the Most of Your Workplace Retirement -
Planning for a secure retirement can be challenging, but the sooner you start, the easier it will be. The Department of Labor’s Employee Benefits Security Administration offers the following tips to help you succeed in reaching your retirement goals:
Rollover 401(k)s to an IRA – Why and How – studies show that the average American holds over eight jobs between the ages of 18 and 45. Because of that, many are asking the question during job transitions, “what do I do with my retirement benefits now that I’ve changed jobs?” Today, you may have retirement benefits in a variety of different accounts. You may have a 401(k), IRA, 403(b) or a privately held pension plan especially if you’re a federal, state, or government employee. It would make sense (where possible) to consolidate all of these accounts in to one fund, right?
In Graphics: How Does a 529 Plan Work?
From Traditional IRA to Roth IRA: New Rollover Rules – For years prior to 2010, only taxpayers with modified AGI of $100,000 or less generally were permitted to convert a traditional IRA into a Roth IRA. For years beginning in 2010 and after, the AGI limitation has been eliminated. Thus, regardless of AGI, all otherwise eligible taxpayers will be allowed to convert an IRA to a Roth IRA. The amount converted is includible in income as if a withdrawal had been made, but no early withdrawal penalties are assessed.
Seven Errors to Avoid in the IRS Offer in Compromise Process – While the IRS is more determined than ever to enforce collection activity for back taxes owed, the IRS Offer in Compromise program can help taxpayers who are experiencing significant financial problems get a fresh start, if they qualify.
However, it is important to note that the IRS Offer in Compromise acceptance rate is less than 23% (less than one in four will be accepted) when a taxpayer prepares, submits, and negotiates his/her offer without professional expert representation.
Fixing FBAR – The curent rules for reporting foreign bank accounts are a mess. Many taxpayers have innocently exposed themselves to horrendous fines for foot-fault violations of these obscure rules — even when they are fully tax compliant. The Treasury’s shoot-the-pickpockets enforcement policy makes a bad situation worse.
How to Raise Financially Savvy Kids – Children are often not adequately prepared for a financially savvy adult life. Between a lack of formal education and bad habits at home, kids can often be set up to make some costly mistakes once they set out on their own. Therefore, it is essential that parents begin to instill financial values in their children and it is never too early to start.
20 Blogs Accounting Students Will Love.
Helping your boss, his wife, and his mistress evade taxes may be unwise – An Ohio accountant was sentenced last week to 11 years in prison on federal tax charges. It would take me at least that long to understand the situation that led to his sentence.
Students get a grip on money – She plans on keeping track of her spending by writing down and budgeting all of her expenses, a tip she learned at the Get a Grip on Your Finances workshop.
CPA Websites Marketing Tips – Why This Feature Draws in More Clients
Criminal borrowing – When a small business fails to remit payroll withholding to the IRS, sometime they justify it to themselves as only a short-term loan to tide the business over tough times. The IRS doesn’t look at it that way at all, as a South Dakota manufacturer has learned the hard way:
Got Payroll Tax Problems? Get Help from a Tax Professional – If you are in a position in a company that allows you to make the payroll tax decisions, we hope that you are making the right decision. It is so easy to divert the money to be used in other areas of the business yet what you may not know is that the IRS acts aggressively when collecting past payroll taxes. If you owe past payroll taxes, seek help from a tax professional – a tax attorney or Certified Tax Resolution Specialist – before the IRS seeks you out and puts you out of business and behind bars.
“For myself, I am an optimist – it does not seem to be much use being anything else.” – Sir Winston Churchill
Zapper Zapped – There are some technologies that the IRS doesn’t appreciate at all. High in the IRS black book of bad modernity is “zapper” software, which is software designed to hide from the IRS revenues recorded in other accounting software. The IRS displayed its feelings in this Justice Department press release:
Did Obama do good? – Found this piece from the NYT from a friend’s link, How Obama saved capitalism and lost the midterm elections. So what has impressed me? Well how about the 77% return on the stock market and 48% if you invested in the S & P index? Amazing. Seriously you would think that we are out of a recession.
Tax Basis: An Infographic – With the repeal of the estate tax for 2010, and its return in 2011, the concept of tax basis has extra significance this year. The following infographic illustrates some of the basics associated with this complex concept.
RESTATING MY THOUGHTS ON “TAX EXPENDITURES” – As expected the proposal to start from “ground zero” by doing away with all “tax expenditures” currently in the Tax Code from the discussion draft issued by the co-chairmen of President Obama’s National Commission on Fiscal Responsibility and Reform has not been universally praised.
How Much Money do Small Business Owners Make? – Many people are curious about what the average small business owner earns. The IRS Statistics of Income provides some data on the average income of sub chapter S corporations and sole proprietorships, which helps to estimate small business owners’ earnings.
4 People You Should Never Hire – There are many people you can hire to make your life a little easier. These people have successful businesses because people operate on the assumption that they just don’t have enough time to do certain tasks. The truth is, you don’t need to hire these people because you do have enough time to take care of the tasks they would take care of for you. In fact, most of the time hiring these people simply constitutes laziness on your part.
How to Tell if an Option is In the Money – A stock option that is considered to be in the money holds what is called intrinsic value. The intrinsic value of an option is the difference between the strike price and the actually share price of the stock. In this case, the strike price of the option is more valuable than the actual share price of the stock if it were to be exercised.
Did you miss the guest post I had yesterday? If so please check it out, Simple solutions to IRS tax debt problems
Couples and Money: Do You Have Joint or Separate Finances? – Should a long-term couple (married or not) have combined or separate finances?
How Do Couples Divide Their Money?
“My problem lies in reconciling my gross habits with my net income.” –Errol Flynn
Creating a Financial Plan – The list of required equipment for creating a financial plan isn’t very long: a sharp pencil, an eraser, blank paper.
Small Businesses and Expanded 1099 Filing Obligations - Will the new 1099 reporting be repealed? It would be a good idea given that it is not really designed to lower the tax gap. Congress should find alternatives that really do address the tax gap without requiring compliant businesses to incur great costs. A challenge of course will be Congress to find a revenue offset that people will tolerate.
Will the 1099 rule be the first part of Obamacare to be repealed? – It looks that way. Max Baucus, Senate Finance Committee Chairman, says he will introduce a stand-alone bill to repeal the Obamacare provision that vastly expands the Form 1099 requirements for businesses.
This is great. Social Security vs. Saving – “. . . started work at age 20 retire at age 70. Over 50 years of work I average $50,000 a year. If I put 10% of my income away every month from age 20 to age 70 how would I come out versus depending on the government social security checks I would receive after retirement.”
Small Business Guide to Cloud Computing – Let’s start with defining cloud computing. Cloud computing can simply be defined as a computing model in which services (e.g. web based email) and storage (e.g. web hosting) are provided over the Internet.
Deficit cutting proposals are not popular – The survey found that 57 percent of respondents were uncomfortable with gradually raising the Social Security retirement age to 69 over the next 60 years. Roughly 70 percent had qualms about cutting Social Security, Medicare and defense programs in order to reduce the deficit.
Deductions, Credits and Tax Reform
The Grand Delusion: Balancing the Federal Budget Without Tax Increases – The deficit cannot be eliminated merely by cutting spending, unless Congress wants to strip the military down to pretty much nothing, eliminate Social Security and Medicare, and put an end to a variety of other programs.
Do YOU Want To Pay More to the IRS? Learn About the AMT - Without the alternative Minimum Tax patch, middle-class taxpayers could owe a greater amount of alternative tax to the IRS. Congress needs to take action and save taxpayer’s money A.S.A.P!
The best time to start a startup is not tomorrow, not next week, and certainly not next year. The time is right now, at this very second. Here’s why: 14 Reasons Why You Need To Start A Startup
Intuit 2020 Report: 20 Trends That Will Shape the Next Decade builds on more than five years of research led by the Institute for the Future and Emergent Research. It is the first in a series of reports looking at key trends affecting consumers and businesses in the coming years. Subsequent reports will drill down into specific trends and industries, but the current report presents a broad overview.
20 Questions to Ask Yourself Before Accepting a New Job – before you jump at the opportunity, I recommend taking a few minutes to really evaluate the position and how well it meets your needs.
Why You Don’t Want a Tax Guy Doing Your Books – In short, I suggest you hire two accounting professionals – one to do your taxes and advise you on tax law with certain decisions and another with the skills to help you make your business the best it can be.
Tax Filing Using Tax Software – Have you ever wondered just how hard is to file a tax return? If you are single or even married and don’t have many claims or exceptions to report then you might want to consider filing return yourself; and even if you did have to claim several items in your return, today’s tax software applications are up to date with all the changes made to tax laws, those who use these programs usually end up saving quite a lot in tax return fees.
Be sure to check out these round ups from other sources.
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’
BlogRoll Beans “Almost” Thanksgiving Addition
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – WEDNESDAY EDITION
In Pursuit of Debt Freedom: Mint’s Personal Finance Roundup
Top Blogs On Startups – This is a list of the best startup blogs, ranked daily based on traffic, search authority and online buzz.
Other info:
Building the Firm of the Future
How to Write Magnetic Headlines
13 Great Sites for WordPress Tips, Tutorials, and Hacks
11 Ways To Do More With Online Video
50 Ways to Get Your Site Noticed
How exceptional is your client service?
A Week in Perspective
The Turbo Tax defense doesn’t work in Tax Court. No Gold at the End of the Rainbow – The Court also noted that they gave plenty of opportunities for the Aus to negotiate a settlement with the IRS, and/or to consult attorneys regarding their case. They didn’t until the Court was about to render its decision. Had they asked a tax professional or an attorney familiar with tax law about their case, they likely would have been advised to settle and they would be paying less than they’ll have to.
Disability Insurance Policy To Protect Your Most Important Asset – Your Income – Ask yourself this question. What is your most important and valuable asset? Think about it for a minute. Is it your house? Your savings or your 401(k) retirement plan? Your sports car or rare memorabilia? While all of these things are both important and valuable, none of them truly represent your MOST valuable asset
Don’t Get Taken! What Passive Income Really Means
Love And Money – Love and money don’t always go hand in hand. It can be the cause of countless arguments especially since most of us have different money styles. However, with a few guidelines to promote better money communication, money can become a source of joy within a relationship rather than a stress inducer.
I like this – My “Reverse” Black Friday
ANOTHER ONLINE DEBATE – It seems the announcement of THE SCHEDULE C LETTER has re-opened the online debate of “Should a Sole Proprietor Incorporate, or A One-Person LLC Elect To Be Taxed As A Corporation, For No Other Reason Than to Reduce the Chance of an IRS Audit?” –
The Answer is individually situational. Please see a lawyer then see you tax professional before making your choice.
Not Going To Happen – All over the tax blogs today has been coverage of the President’s Debt Reform Panel’s Tax Reform Panel options for cleaning up the American Tax Code. It looks well thought out and I intend to give it much more study over the next couple of days. But it doesn’t matter what the options suggest, it won’t happen.
Veterans Day 2010: Tax considerations for members of the military
Home Improvements That Qualify for Tax Deductions – Did you know that some home improvements may qualify for federal tax deductions or tax credits? Knowing which renovations and improvements are eligible for tax deductions can help you decide whether or not to make the improvements, and can help you correctly claim deductions or credits for these renovations when you file your taxes.
The One Thing to Drop from Your Budget Like a Hot Potato
Financial Loopholes to Take Advantage of Now – In 2001 Congress passed a massive tax reform bill called the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), which provided tax cuts to all Americans, in all income levels, via a multitude of changes to the tax code. These tax benefits have come to be known as the Bush tax cuts.
Tax Relief FAQ: How Does the IRS Compute Penalties For Delinquent Tax Returns? – An important step in avoiding IRS tax trouble is to understand how the IRS approaches delinquent tax return penalties.
1099s – The Good, the Bad and the Ugly - Having a small business issue 1099s for these purchases starting in 2012 would be pointless:
- $852 of office supplies purchased from Staples
- $2,592 of airline tickets purchased directly from the airlines
- $1,300 of services from their CPA firm
Issuing a 1099 for $700 of services rendered by a web designer makes sense though and existing law already covers that.
Steve Jobs Is NOT Giving You Tax Advice (But If He Did…) – . . . , as marketing goes, it’s pretty darn clever. And despite whether you love Apple or not, you have to give them credit for consistently being above the curve on the marketing side. As a tax geek, I’m a little bit in love. Using the Tax Code as a marketing tactic is genius (so, hey Apple, call me).
How to Work a Job Fair – Before You Go to a Job Fair, It’s best to be prepared for a job or career fair. Before you go, prepare yourself to impress, and have an idea of what companies you want to talk to. As get ready to go, consider taking these actions:
So I Won a Free Trip to the Bahamas. Now, How do I Report It on my Tax Return? - “I will not be sent a Form 1099-MISC. So how should I account for this on my tax return?”
What are the odds of an Obama compromise on Bush rates? – Tax planners got all excited yesterday when top White House aide David Axelrod hinted to the Huffington Post website that the President might be ready to extend the 2010 tax rates for top earners. Absent new legislation, the top marginal rate will rise from 35% to 39.6% in 2011 — and higher when phase-outs are counted. But if the Axelrod statements are a trial balloon, the President isn’t ready to climb aboard just yet. CNN reports on comments he made in Seoul:
Lottery winnings, charitable donations and the tax collector – By now I’m sure you’ve heard about the Nova Scotia couple who hit the lottery and then gave away most of their $10.9 million (Canadian) winnings to charities.
Allen and Violet Large are generous, but they’re no fools. They kept nearly a million for themselves. The septuagenarians say they’ll use the money for emergencies and to buy more lottery tickets.
Good for them! And doubly good for them that Canadian tax law allows them to give away so much of their windfall.
Wash Sale Rule for Investment Losses – All investors experience losses, no matter how experienced or knowledgeable they are. The Internal Revenue Service (IRS) allows investors to deduct capital losses from investing gains in order to reduce your capital gains taxes. Under the IRS rules, short-term capital losses can be used to reduce short-term capital gains, which is extremely beneficial because short-term capital gains tax is equal to your ordinary income tax rate.
Roth Conversion Planning Ideas
5 Ways to Make Sure that a Partnership is a Good Idea for Your Business – Ask most business people their most horrendous business story, and it will almost always involve a partner.
Lucky Number 13: 13 Financial Changes for My 23rd Birthday – now that I’m one day away from being 23, I’ve realized it’s time to start being more financially responsible.
A Week in Perspective
EXPLAINING THE “METHODS” OF MY “MADNESS” – A look into the world of my blogging friend. (RDF- Looking forward to meeting up with you in St. Louis on August 15 – 18, 2011)
November’s Important IRS Dates – A new month is upon us, along with a new set of IRS Deadlines. We’re entering the IRS’s fourth and final quarter. Here’s the important IRS dates you need to know:
IRS Makes Few Changes to Retirement Rules – For the second year in a row, the Internal Revenue Service has announced that there will be no change to the maximum allowable contributions to pension plans or to individual retirement accounts in 2011. Here are the limits that will remain the same in 2011:
Expensing of Business Assets – New Treasury Report – Economic stimulus provisions of the past few years have included bonus depreciation and higher expensing amounts under IRC Section 179.
What Non-profits should know about Tax Form 990 – Form 990 or Return of Organization Exempt from Income Tax form is due to be submitted to the IRS by non-profits. Ever since 2008, this Form has been substantially revised to include several reporting requirements by the IRS. There are a few pertinent changes to the form and its requirements that non-profit organizations should know.
My favorite post this week.
A must read.
Being an Entrepreneur / Your Business – The topic of working on your own, or, even if you don’t the importance of the entrepreneur “in you” wherever you do work. Do you consult, do you have your own clients or are you striving to? There are some principals I think are necessary to make it “on your own” or excel where you are working. While I am a younger CPA and take a lot of pride in what I have accomplished so far, I keep working hard knowing that I have hardly touched the tip of the iceberg of what I can accomplish in my life.
Like my bloging mentor said about The Missouri Taxguy, Do I really need to keep reminding you to check out BlogRoll Beans from Joe Arsenault over at CafeTax? Thanks Joe.
Suggested first Republican budget cut: Congressional salaries – Watch out for the pigs as they pass over Kay.
What if you are donating it to an arson awareness organization?
Another must read –
Commercials, Kids, and Materialism – If you’ve been reading The Simple Dollar for long, you’ll know that this ad takes a swing directly at a lot of different ideas I’ve shared over the years about parenting, money, materialism, and other things. I thought I’d run through them again in light of this ad.
Tax moves to make in November – we have to get through the lame-duck session. In the next few weeks, Congress has vowed to deal with the expiring expiring Bush tax cuts, stimulus tax breaks that are only good for a couple more months, the already ended extenders and even the estate tax that’s scheduled to come back to life on Jan 1. 2011.
Tax Carnival #76: Election Day 2010
Pension Plan Limits for 2011 – The IRS has announced the 2011 cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items.
3 Tips for Launching a New Business – Starting a business may not be one of the easiest things to do, but it could be one of the most rewarding, as well as one of the most financially freeing decisions you could make for yourself. Seeing that most, if not all of us, need some hand-holding whenever we’re starting a new venture, here is some advice on three routine yet absolutely crucial areas of a business.
How to Fund a Startup – Deciding to start a business is exciting. You are in charge of making decisions large and small, and you have the opportunity to change your life, and possibly other lives as well. But starting a business also brings challenges. Almost all businesses will require some form of capital to start. If you don’t have cash reserves in a savings account or other liquid investment available to use, you’ll have to find other ways to fund your startup. Here are some common methods for getting the money you need to start your business:
Did Obama Really Cut Small-Business Taxes 16 Times? – The assertion that the Obama administration has cut taxes for small business 16 times might surprise some entrepreneurs —But the White House backed the claim with a fact sheet. Here, for the record, are the taxes the administration says it has cut, in its words:
Bill Gates Loses on Election Night
Could Tax Law Professors Be More “Tax Return Hands-On” Than Tax Practitioners? – Mike Foster, who practices with Venable LLP, said, “I don’t even do my tax returns anymore. I don’t know any tax lawyer who does their own tax returns. The forms are Greek even to us.” Hopefully someone does a survey to determine how many tax lawyers do their own returns.
Please Ask Me Before… – …you make decisions that might affect your taxes. . . .
In short, please see me (or your tax professional) before you do something that will affect your taxes. If you’re not sure if there will be an effect, please call and ask.
5 ways to save on heating costs – We are always on the lookout for ways to save a few extra dollars and heating costs are a good place to start, especially in the fall and winter.
FAIR Tax isn’t just a bad tactic; it’s a bad idea. – The Wall Street Journal and the Cato Institute’s Daniel Mitchell have branded the “FAIR Tax” sales tax proposal a loser issue for political candidates. In a more-in-sorrow-than-anger tone, the Journal notes the difficulties of candidates who embrace this national sales tax:
5 Do-It-Yourself Services You Should Leave to the Professionals – Many people are tightening their belts in these uncertain economic times.One of the first places we often look to save money is finding projects around the home that we can do ourselves rather than calling the professionals. All do-it yourself projects are not created equal, though, and there are times when you are better off calling in the professionals rather than potentially causing more problems by doing it on your own.
What is QE2, and What Does it Mean for You? – The big news on the economic front is that the Federal Reserve has decided to launch a second round of “quantitative easing” – dubbed QE2. If you’re not familiar with the concept of quantitative easing
Don’t pay the seller’s income tax – The Foreign Investment in Real Property Tax Act of 1980 requires buyers to withhold 10 percent federal income tax when buying real estate from those diabolical foreign sellers. The IRS can force a buyer who fails to withhold the 10 percent from the purchase payment to come up with the 10 percent withholding out of his own assets.
Saving Money at Christmas – Christmas spending over the last 2 or 3 years has been relatively low in comparison with other years, but that’s all set to change this Christmas. According to the National Retail Federation (NRF), shoppers are ready to part with their cash this holiday season for the first time since the recession hit. The NRF has forecast total retail sales growth of 2.3% for November and December this year, which means that consumers plan to spend an average of $688.87 on holiday shopping this year, an incredible figure. So if that’s the sort of money the average person on the street is willing to spend this Christmas, how many of you are actually trying to save?
Jason Blumer CPA, He’s a Funny Guy
Carnival of Wealth #10 – Halloween Edition
Website 101: How to Build a Site and Get It Online – Building and putting a website online doesn’t have to be difficult or complicated, though. If you are willing to do a little mental gymnastics and learn a few tricks, you can build a simple website on your own and publish it to your server yourself. Here are a few simple tips for do-it-yourselfers.
How Much Will You Spend in Retirement? – When people share their retirement plans with me, they often assume that they’ll be able to reduce their spending once they retire. At first glance, this seems reasonable. After all (they tell themselves) they won’t have to support the kids anymore and the house will be paid for. And the media encourages people to think this way too. They make the argument that once folks retire, they usually spend 80% of what they spend while they are working. This kind of thinking is wrong and dangerous… Unless you are very mindful and really understand how much money you will need to retire.
Five Ways to Save Money on Food – The number one way to save money is by learning how to cook. You might have a hectic schedule and be exhausted at the end of the day but push yourself to prepare a nice meal. You’ll get to enjoy it, expand your knowledge about cooking, and eat better than ordering it from some fast food place. You won’t be good at it in the beginning but over time your skills will improve and you’ll enjoy it even more.
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