Contributed by Elite Bookkeeping & Tax Services
Whenever a business starts there is always the question of how the people that provide services for the business will be paid. Will those services be performed by employees or will independent contractors be used?
Before the business can determine how to treat payments they need to know and make clear the business relationship. It is important to establish this relationship because an employee has taxes withheld, social security and medicare matched by the employer, unemployment insurance paid, workers compensation insurance paid and often benefits provided. An independent contractor just gets paid. It is a big expense difference.
To determine whether an individual is an employee or and independent contractor, the relationship of the business and worker must be examined. It comes down to does the business have control over what and how a job will be done or do they just control the results of the job. The determination falls into three categories: behavior control, financial control, and type of relationship.
Behavioral Control
Employees are generally subject to instructions about when, where, and how to work. The employer controls when and where the work is performed and what hours the person will be at the job. The person is told what tools and equipment to use, who else can be hired to assist with the work and where to purchase supplies and services. They are told what work is to be performed by a specific individual and what order or sequence to follow. Employees also may be required to receive training by the employer.
Independent Contractors can be hired to do a certain job in a certain place and be completed by a certain time. However, how the job is done is up to the contractor. When the work is performed, what equipment is used, who is hired to assist and where materials and supplies are purchased are up to the Independent Contractor. They also obtain and pay for their own training.
Financial Control
An employee is generally guaranteed a regular wage amount for an hourly, weekly or other period of time, even if the wage or salary is connected with a commission. They may be paid whether work is being performed or not. An employee generally does not have an investment in the company unless there are stock options available. They usually have any expenses they incur for things such as travel, phone, or equipment reimbursed.
An Independent Contractor is not reimbursed for any expenses. They generally have a business of their own or a significant investment in the facilities and equipment used to perform the work. An Independent Contractor is free to offer services to the general public and can take on jobs for other companies or individuals. They generally advertise their services and maintain a home office or visible business location. They generally get hired and paid by the job, usually a flat fee. Although some jobs can be billed hourly. An Independent Contractor can make a profit or loss on the job.
Type of Relationship
An Employee generally signs a employee contract. The employee is generally provided benefits such as insurance, pension plan, vacation and sick pay. Employee's are engaged for an indefinite period of time. They perform activities that are a regular daily part of the business. They fill out an IRS W-4 form that tells the employer how much taxes to withhold. They are not free to do business for other companies and in fact some companies have penalties if they do.
Independent Contractors have job by job contracts or for specific project or periods of time that state they are responsible for their own taxes. They are not provided with any benefits. They fill out an IRS W-9 form telling the IRS that no taxes are required to be withheld.
It is important to determine what kind of relationship from the beginning of your business. If you treat an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that person. Also, if you pay an individual as an Independent Contractor, they do not qualify for unemployment of workers compensation so if they try to collect it, you will want to be ready to verify they are not an employee.
For assistance with bookkeeping or tax services, contact Elite Bookkeeping directly at (800) 416-3820. Visit their web site at http:www.elitebookkeeping.biz
Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.
Showing posts with label Bookkeeping and Taxes. Show all posts
Showing posts with label Bookkeeping and Taxes. Show all posts
Oct 10, 2012
Winning the Tax Game- End of the Season Tax Tips
Contributed by Robyn Yelton, EA
Elite Bookkeeping & Tax Services Inc.
If you think gridlock is a football term, you may not be too far out of bounds. Tax cuts, tax increases and tax provisions are being passed back and forth in Washington, D. C. and whoever fumbles, loses. That can be bad news for taxpayers.
Look at what hangs in the balance: Lower tax rates, the 15% capital gains rate on long-term investments, the 2% payroll tax cut, the 35% maximum estate and gift tax rates, direct IRA payouts to charity, higher alternative minimum tax exemptions, the deduction for state sales taxes and even the $250 deduction for out-of-pocket teacher supplies. And you thought the potential for a 2012 catastrophe was only a Mayan myth.
Although we may be down to the final quarter of the year, there is still time before the two-minute warning, to take a look at your tax situation and see if you can save a few tax dollars.
• The American Opportunity Tax Credit expanded the Hope Credit, providing a credit of up to $2,500 of the cost of qualified tuition and related expenses. Up to $1,000 of the credit can be returned to a taxpayer as a refund. The credit was supposed to end in 2010, but it was extended through 2012. This could be the credit's last year if Congress is looking for ways to cut the federal deficit.
• If you’re in the top tax bracket of 35%, you may want to accelerate income into 2012, if possible. If Congress doesn't act, the highest tax rate will rise to 39.6% in 2013.
• Along with the possibility of higher ordinary income tax rates, there's the possibility of higher capital gains rates on investment income in 2013. The top capital gains rate for investments held for more than a year is 15% for most taxpayers through 2012, and zero capital gains tax for investors in the 10% and 15% tax brackets. If your crystal ball says capital gains taxes are going up next year, you may want to consider locking in profits on long-term investments before the end of this year.
• Giving to charity can help reduce your tax bill if you are able to itemize deductions. In addition to contributions made by cash, check or credit card, the crisp fall air may provide the energy, while the potential of a lower tax bill may provide the incentive to clean out closets looking for items in good condition, that you can donate to a qualified charitable organization. Remember to make a list of the items and determine their fair market value. Clip the list to the door hangar or receipt that you receive from the organization and keep with your tax return documents for your records.
• If you believe that charity begins at home and you want to give away your estate's assets while you're still around to get thanks, you can give up to $13,000 each to as many individuals as you wish without any tax costs to you or your gift recipients in 2012.
• Sometimes, a major life change is thrown your way and you may not think of it as a tax deduction. If you found yourself looking for a new job, agency fees, resume expenses, career counseling costs and travel related to the job search may be deductible even if the job search was unsuccessful.
If you moved because of a change in job location, the cost of moving your household goods and family members may be deductible.
Unreimbursed travel expenses for military reservists, including the National Guard, may be deductible.
The fee that you pay for renting a safe-deposit box, the cost of having your taxes prepared, the advisory or management fees you pay a firm to manage your investments may also be overlooked deductions.
Some of these tax breaks require you to itemize. Others are available even if you claim the standard deduction. Naturally, there may be eligibility requirements to meet and in some cases, there will be extra worksheets, forms or schedules. And you will always need to have documentation for these often-overlooked deductions.
• Even if you’re thinking you’ll never be able to retire, putting money into a retirement account can save you tax dollars. Employees should contribute as much as they can to their 401(k) or similar plans at work.
If you’re eligible, you may want to contribute to an Individual Retirement Account (IRA). Although Roth IRA contributions are not deductible, traditional IRA contributions may be, depending on your income and whether or not you are covered by an employer’s plan.
Self-employed folks also have a variety of retirement plans from which to choose: SEP (Simplified Employee Pension) IRA, or Solo 401(k) or SIMPLE (Savings Incentive Match Plan for Employees) IRA. Some taxpayers may be able to contribute to a Traditional IRA.
For 2012, remember Roth IRA conversion taxes! If you converted a traditional IRA to a Roth IRA in 2010, you were allowed to span the taxes due on the converted amounts equally over the 2011 and 2012 tax years. Your first Roth conversion tax bill was included on your 2011 return, but make sure you plan for the 2012 conversion bill.
Along those lines, it is not too late to adjust the amount of Federal or state tax withheld from your paycheck. If you owed taxes last year, or received a larger refund than expected, you may want to take a look at adjusting your withholding. Remember: the goal is to pay the least amount of taxes. The final quarter of the year is the perfect time to talk to your Enrolled Agent to make sure the game plan you discussed at the beginning of the year still applies, and you’ll surely be the winner at tax time.
For assistance with your bookkeeping and tax needs, contact Elite Bookkeeping & Tax Services directly at (800) 416-3820.
Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.
Elite Bookkeeping & Tax Services Inc.
If you think gridlock is a football term, you may not be too far out of bounds. Tax cuts, tax increases and tax provisions are being passed back and forth in Washington, D. C. and whoever fumbles, loses. That can be bad news for taxpayers.
Look at what hangs in the balance: Lower tax rates, the 15% capital gains rate on long-term investments, the 2% payroll tax cut, the 35% maximum estate and gift tax rates, direct IRA payouts to charity, higher alternative minimum tax exemptions, the deduction for state sales taxes and even the $250 deduction for out-of-pocket teacher supplies. And you thought the potential for a 2012 catastrophe was only a Mayan myth.
Although we may be down to the final quarter of the year, there is still time before the two-minute warning, to take a look at your tax situation and see if you can save a few tax dollars.
• The American Opportunity Tax Credit expanded the Hope Credit, providing a credit of up to $2,500 of the cost of qualified tuition and related expenses. Up to $1,000 of the credit can be returned to a taxpayer as a refund. The credit was supposed to end in 2010, but it was extended through 2012. This could be the credit's last year if Congress is looking for ways to cut the federal deficit.
• If you’re in the top tax bracket of 35%, you may want to accelerate income into 2012, if possible. If Congress doesn't act, the highest tax rate will rise to 39.6% in 2013.
• Along with the possibility of higher ordinary income tax rates, there's the possibility of higher capital gains rates on investment income in 2013. The top capital gains rate for investments held for more than a year is 15% for most taxpayers through 2012, and zero capital gains tax for investors in the 10% and 15% tax brackets. If your crystal ball says capital gains taxes are going up next year, you may want to consider locking in profits on long-term investments before the end of this year.
• Giving to charity can help reduce your tax bill if you are able to itemize deductions. In addition to contributions made by cash, check or credit card, the crisp fall air may provide the energy, while the potential of a lower tax bill may provide the incentive to clean out closets looking for items in good condition, that you can donate to a qualified charitable organization. Remember to make a list of the items and determine their fair market value. Clip the list to the door hangar or receipt that you receive from the organization and keep with your tax return documents for your records.
• If you believe that charity begins at home and you want to give away your estate's assets while you're still around to get thanks, you can give up to $13,000 each to as many individuals as you wish without any tax costs to you or your gift recipients in 2012.
• Sometimes, a major life change is thrown your way and you may not think of it as a tax deduction. If you found yourself looking for a new job, agency fees, resume expenses, career counseling costs and travel related to the job search may be deductible even if the job search was unsuccessful.
If you moved because of a change in job location, the cost of moving your household goods and family members may be deductible.
Unreimbursed travel expenses for military reservists, including the National Guard, may be deductible.
The fee that you pay for renting a safe-deposit box, the cost of having your taxes prepared, the advisory or management fees you pay a firm to manage your investments may also be overlooked deductions.
Some of these tax breaks require you to itemize. Others are available even if you claim the standard deduction. Naturally, there may be eligibility requirements to meet and in some cases, there will be extra worksheets, forms or schedules. And you will always need to have documentation for these often-overlooked deductions.
• Even if you’re thinking you’ll never be able to retire, putting money into a retirement account can save you tax dollars. Employees should contribute as much as they can to their 401(k) or similar plans at work.
If you’re eligible, you may want to contribute to an Individual Retirement Account (IRA). Although Roth IRA contributions are not deductible, traditional IRA contributions may be, depending on your income and whether or not you are covered by an employer’s plan.
Self-employed folks also have a variety of retirement plans from which to choose: SEP (Simplified Employee Pension) IRA, or Solo 401(k) or SIMPLE (Savings Incentive Match Plan for Employees) IRA. Some taxpayers may be able to contribute to a Traditional IRA.
For 2012, remember Roth IRA conversion taxes! If you converted a traditional IRA to a Roth IRA in 2010, you were allowed to span the taxes due on the converted amounts equally over the 2011 and 2012 tax years. Your first Roth conversion tax bill was included on your 2011 return, but make sure you plan for the 2012 conversion bill.
Along those lines, it is not too late to adjust the amount of Federal or state tax withheld from your paycheck. If you owed taxes last year, or received a larger refund than expected, you may want to take a look at adjusting your withholding. Remember: the goal is to pay the least amount of taxes. The final quarter of the year is the perfect time to talk to your Enrolled Agent to make sure the game plan you discussed at the beginning of the year still applies, and you’ll surely be the winner at tax time.
For assistance with your bookkeeping and tax needs, contact Elite Bookkeeping & Tax Services directly at (800) 416-3820.
Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.
Sep 14, 2012
Tax Benefits of Medical and Dental Reimbursement Plan
UTILIZATION OF THE TAX BENEFITS AFFORDED BY A MEDICAL AND DENTAL REIMBURSEMENT PLAN
In recent years one of the more common tax benefits utilized by closely held corporations was the Executive Medical and Dental Reimbursement Plan (Section 105(h) of the Internal Revenue Code). Section 89 of the Internal Revenue Code enacted by the Tax Reform Act of 1986 would have repealed section 105(h) and replaced it with a more complex set of rules. Congress repealed Section 89 in 1989 and reinstated Section 105(h). The plan must meet certain eligibility and benefits requirements, otherwise the plan is deemed discriminatory, and all (or a portion) of the benefits paid thereunder would be included in the gross income of the employees so benefited.
Eligibility Requirements
A plan satisfies the nondiscriminatory eligibility requirements if it meets either of two standards, which are similar to the nondiscriminatory eligibility requirements applicable to pension plans prior to revision of the 1986 Tax Reform Act. Under the first alternative eligibility standard, a plan must benefit at least 70% of all employees (or 80% percent of all employees if at least 70% percent of the employees are eligible). Under the second alternative eligibility standard, a plan must benefit a classification of employees set up by the employer and found by the Secretary of the Treasurer not to be discriminatory in favor of employees who are highly compensated individuals. In applying the alternative eligibility standards, the act provides that there may be excluded from consideration any employee who: (1) has not completed 3 years of service, (2) has not attained the age of 25, or (3) is a part time or seasonal employee.
In addition, employees in a collective bargaining unit can be excluded from consideration under the rules similar to those provided for qualified pension plans if there is evidence that accident and health benefits were the subject of good faith bargaining. Similarly, the Act provides for the exclusion of nonresident aliens, under pension plan rules.
Benefit Requirements
The act further provides that benefits must not discriminate in favor of employees who are highly compensated individuals. A plan does not meet the requirement of nondiscriminatory benefits unless all benefits provided for employees who are highly compensated individuals are also provided for all other employees. In testing plan benefits for discrimination, all facts and circumstances are to be taken into account. Consequently, if a plan, or a particular benefit provided by a plan, is terminated, the termination would cause plan benefits to be discriminatory if the limited duration of the plan or benefit has the effect of discrimination in favor of the highly compensated. This situation could arise, for example, where the duration of a particular benefit roughly coincides with the period during which a highly compensated employee utilizes that benefit. The requirements of the act are not violated merely because benefits under an employers plan are offset by benefits paid under a self-insured or insured plan of the employer or another employer, or by benefits paid under Medicare or Federal or State law.
Highly Compensated Employee
A highly compensated employee is: (1) one of the five highest paid Officers, (2) a Shareholder (owning more than 10 percent of stock, directly or indirectly), or (3) one of the highest paid 25% of all employees (other than employees who may be excluded from consideration).
Excess Reimbursement
Excess reimbursement to a highly compensated employee during a plan year under a self-insured medical reimbursement plan is included in the gross income of the employee for the taxable year in which the plan years ends. Reimbursement is an excess reimbursement if it is a discriminatory benefit, that is, if it made under a plan benefit which is provided for an employee who is highly compensated, but not to all employees who are not highly compensated.
In addition, a portion of the total amount reimbursed during a plan year to each employee who is highly compensated is an excess reimbursement if the plan does not meet the nondiscriminatory eligibility requirements. The excess reimbursement portion is determined by multiplying the total amount reimbursed to the employee during the plan year by a fraction, the numerator of which is the total amount reimbursed during that year to all employees who are highly compensated and the denominator of which is the total amount during that year to all employees. In computing the amount of an excess reimbursement because a plan does not meet the nondiscriminatory eligibility requirements, however, discriminatory benefits are not taken into account.
Regulations promulgated by the Secretary of the Treasury provide that reimbursements for certain medical diagnostic procedures do not have to be considered part of a plan, and are not subject to the nondiscrimination requirements of Section 105(h). Included with your new Corporate Kit is a copy of a plan together with a special set of minutes adopting the plan. To set the plan in operation, the papers need only be completed.
For assistance with incorporating your business contact
American Corporate Enterprises, Inc. Toll free (888)274-1130
http://www.americancorpenterprises.com
For assistance with bookkeeping and taxes contact
Elite Bookkeeping & Tax Services, Inc. Toll free (800)416-3820
http://www.elitebookkeeping.biz
Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.
Jan 20, 2012
Tax Checklist
Contributed by Sara Zaro- Enrolled Agent, Certified Bookkeeper
Elite Bookkkeeping & Tax Services
This contains a Tax Checklist to help you organize your tax documents and some frequently overlooked tax deductions that might help reduce your tax bill.
Whenever we talk about taxes, the following caveats apply: “It depends,” and “these deductions may not apply to all taxpayers.” If you have any questions about these or any other tax-related matters, please let us know.
Charitable contributions: In addition to the usual cash donations that you have made throughout the year, you may be able to deduct the cost of using your vehicle if you volunteer your time or provide a service to a qualified charitable, educational or nonprofit organization.
There are two options available for claiming vehicle expenses and, naturally, the IRS requires you to have “reliable written records” for either method:
To use the standard charitable mileage rate of 14¢ per mile, your records must show the name of the organization, the dates you drove your car for your charitable work and the number of miles driven.
To use the actual vehicle expenses, your records must show the costs of operating your vehicle that directly relate to your volunteer work.
You can also deduct parking fees and tolls regardless of which method is used.
So, if you are a scout leader, a Red Cross volunteer, spend a few hours helping out at the local Food Bank or are actively involved with your religious organization, your vehicle expenses may increase your charitable contribution deduction.
In addition to volunteer miles driven, you may have spent money out of your own pocket within the scope of your volunteer work. These expenses might include office supplies, uniforms, and even travel expenses if you were away from home while performing your charitable service. These documentation requirements for out-of-pocket expenses apply:
You must have “adequate records” to prove the amount of the expenses.
You must obtain an acknowledgement from the organization before you file your tax return that contains a description of the services you provide, a statement that says you were not reimbursed for the expenses, and that you receive no tangible (other than religious) benefit from the organization.
The final point under the category of charitable contributions, is simply a reminder regarding noncash contributions: In recent years the IRS has stiffened the required documentation for donations of clothing and other household items to nonprofit organizations like the Salvation Army or the Goodwill Industries. “Three bags of clothing” or “two boxes of books” is not an adequate description of the donated items to claim the deduction. You must have a list of the donated items along with the fair market value you have placed on those items, and some form of receipt or acknowledgement from the organization.
Here are a few handy websites to help you evaluate your noncash items:
Two different Salvation Army evaluation guides can be found here:
http://www.satruck.com/ValueGuide.aspx
http://www.salvationarmysouth.org/valueguide.htm
You can download an evaluation guide from the yellow box in the middle of this Goodwill Industries web page:
http://www.goodwill.org/get-involved/donate/taxes-and-your-donation/
This Usedprice.com link contains Blue Book valuations for different categories of noncash donations from television sets and computers to guns, musical instruments, power tools and more:
http://www.usedprice.com/
Medical Expenses: In addition to the usual deductions for out-of-pocket medical expenses like prescriptions, copays, dental work and glasses, you may also be able to deduct the amount that you pay for medical insurance premiums. The deduction is not just limited to medical, hospitalization and prescription plans, it can also include dental, optical (including contact lens replacement coverage), and certain qualified long-term care plans. Also, the amounts you pay for Medicare Part B and D, and in some cases, Part A, are also deductible insurance premiums.
As with the deduction for charitable miles, there is also a deduction for medical miles and the same two choices apply: the standard medical mileage rate or actual expenses. Be aware that the medical mileage rate for 2011 changed in mid-year! For medical miles driven from January 1 to June 30, the rate is 19¢ per mile; From July 1 – December 31, the rate is 23.5¢ per mile. You can also deduct parking fees and tolls regardless of which method is used for car expenses.
Looking back to 2011, it’s been a relatively quiet year for tax changes, and we can all appreciate that! Congress passed the two-month extension of the Social Security tax reduction and will consider a longer extension when it reconvenes early in 2012.
Tax Checklist
This form is to assist you in gathering your income tax information. Use it as a guide for information you need to provide. Any questions, please call or e-mail.
GENERAL INFORMATION:
□ First, middle initial, and last names of taxpayers and dependents as written on the Social Security cards, and dates of birth for taxpayers and all dependents, especially new dependents.
□ Address, (city, state, zip), telephone number, and e-mail address.
□ Marital Status: Single ___ Married ___ Head of Household ___ Separated ___
□ Number of Dependents: ___ Did any dependents have any income? Yes ___ No ___
□ Do all dependents live with you? Yes ___ No ___
TYPES OF INCOME:
□ Wages - All W-2's □ Income from Rentals - All 1099-MISC
□ Pensions/Retirements - 1099-R □ Business Income - All 1099-MISC
□ Social Security - SSA-1099 □ Farm Income
□ Bank Interest - 1099-INT □ Alimony Received - Total amount
□ Dividends - 1099-DIV □ Unemployment - 1099-G
□ Commissions - 1099-MISC □ State Tax Refund - 1099-G
□ Tips and Gratuities □ Miscellaneous - Jury Duty, Gambling, Other
□ Sales of Stock, Mutual Funds - 1099-B
BUSINESS INCOME & EXPENSE ITEMS: This list is not all encompassing. If you don’t see an expense listed below, ask.
Total (Gross) Income
Advertising
Auto: Parking &Tolls
Business Phone Expense
Cell Phone Expense
Subcontractors
Commissions Paid
Insurance
Interest Paid
General Office Expense
Rent/Lease Fees Paid Legal or Professional Fees
Repairs
Cleaning/Maintenance Dues & Publications
Equipment/Supplies
Tools
License Fees/Taxes Paid
Utilities
Education Expense
Association Dues
Bank/Credit Card Fees
Postage
Meals/Entertainment
Business Miles & Total Miles Asset Purchases
Hotel/Travel Expense
ADDITIONAL ITEMS FOR RENTAL PROPERTIES:
Keys
Condo/PUD Fees
Management Fees
Mortgage Statements
Yard Work
Termite Treatment Expense
Utilities
Mileage/Travel
Other
DEDUCTIONS/CREDITS TO INCOME:
Self-employed Health Insurance
IRAs /Keogh/SEPs
Student Loan Interest
Medical Savings Account
Teacher Expense
Child Tax Credit
Penalty on Early Withdrawal of Savings
Foreign Tax Paid
American Opportunity/HOPE/Lifetime Learning Expenses
Adoption Expenses
* Total Alimony Paid: Must have name and Social Security number of recipient, and amount paid.
* Child Care/Day Care Credit: Must have name, address, Social Security number or EIN of provider, and amount paid.
ESTIMATED TAXES PAID:
Date payment was made, and the amount paid for each Federal and State quarterly tax estimate.
ITEMIZED DEDUCTIONS:
MEDICAL
Medical & Dental bills
Prescriptions
Glasses/Contact Lenses
Out-of-pocket expenses
Medical miles
Lab fees
Hearing Aids
Medical/dental/long term care insurance
TAXES
Prior year state tax paid
City/local tax
Sales tax
Real estate tax
Personal property tax Other
CHARITABLE CONTRIBUTIONS
Church
Boy/Girl Scouts
United Way/CFC
March of Dimes
American Heart
Easter Seals
Red Cross
MDA/MS
YWCA/YMCA
Salvation Army
FoodBank
Payroll deductions
Out-of-pocket Volunteer Expenses
Charitable miles
Other
List and Fair Market Value of household goods and clothing items given to Charitable Organizations.
Elite Bookkeeping & Tax Services will be happy to assist you with your tax needs. Feel free to call us at (800)416-3820.
Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.
Elite Bookkkeeping & Tax Services
This contains a Tax Checklist to help you organize your tax documents and some frequently overlooked tax deductions that might help reduce your tax bill.
Whenever we talk about taxes, the following caveats apply: “It depends,” and “these deductions may not apply to all taxpayers.” If you have any questions about these or any other tax-related matters, please let us know.
Charitable contributions: In addition to the usual cash donations that you have made throughout the year, you may be able to deduct the cost of using your vehicle if you volunteer your time or provide a service to a qualified charitable, educational or nonprofit organization.
There are two options available for claiming vehicle expenses and, naturally, the IRS requires you to have “reliable written records” for either method:
To use the standard charitable mileage rate of 14¢ per mile, your records must show the name of the organization, the dates you drove your car for your charitable work and the number of miles driven.
To use the actual vehicle expenses, your records must show the costs of operating your vehicle that directly relate to your volunteer work.
You can also deduct parking fees and tolls regardless of which method is used.
So, if you are a scout leader, a Red Cross volunteer, spend a few hours helping out at the local Food Bank or are actively involved with your religious organization, your vehicle expenses may increase your charitable contribution deduction.
In addition to volunteer miles driven, you may have spent money out of your own pocket within the scope of your volunteer work. These expenses might include office supplies, uniforms, and even travel expenses if you were away from home while performing your charitable service. These documentation requirements for out-of-pocket expenses apply:
You must have “adequate records” to prove the amount of the expenses.
You must obtain an acknowledgement from the organization before you file your tax return that contains a description of the services you provide, a statement that says you were not reimbursed for the expenses, and that you receive no tangible (other than religious) benefit from the organization.
The final point under the category of charitable contributions, is simply a reminder regarding noncash contributions: In recent years the IRS has stiffened the required documentation for donations of clothing and other household items to nonprofit organizations like the Salvation Army or the Goodwill Industries. “Three bags of clothing” or “two boxes of books” is not an adequate description of the donated items to claim the deduction. You must have a list of the donated items along with the fair market value you have placed on those items, and some form of receipt or acknowledgement from the organization.
Here are a few handy websites to help you evaluate your noncash items:
Two different Salvation Army evaluation guides can be found here:
http://www.satruck.com/ValueGuide.aspx
http://www.salvationarmysouth.org/valueguide.htm
You can download an evaluation guide from the yellow box in the middle of this Goodwill Industries web page:
http://www.goodwill.org/get-involved/donate/taxes-and-your-donation/
This Usedprice.com link contains Blue Book valuations for different categories of noncash donations from television sets and computers to guns, musical instruments, power tools and more:
http://www.usedprice.com/
Medical Expenses: In addition to the usual deductions for out-of-pocket medical expenses like prescriptions, copays, dental work and glasses, you may also be able to deduct the amount that you pay for medical insurance premiums. The deduction is not just limited to medical, hospitalization and prescription plans, it can also include dental, optical (including contact lens replacement coverage), and certain qualified long-term care plans. Also, the amounts you pay for Medicare Part B and D, and in some cases, Part A, are also deductible insurance premiums.
As with the deduction for charitable miles, there is also a deduction for medical miles and the same two choices apply: the standard medical mileage rate or actual expenses. Be aware that the medical mileage rate for 2011 changed in mid-year! For medical miles driven from January 1 to June 30, the rate is 19¢ per mile; From July 1 – December 31, the rate is 23.5¢ per mile. You can also deduct parking fees and tolls regardless of which method is used for car expenses.
Looking back to 2011, it’s been a relatively quiet year for tax changes, and we can all appreciate that! Congress passed the two-month extension of the Social Security tax reduction and will consider a longer extension when it reconvenes early in 2012.
Tax Checklist
This form is to assist you in gathering your income tax information. Use it as a guide for information you need to provide. Any questions, please call or e-mail.
GENERAL INFORMATION:
□ First, middle initial, and last names of taxpayers and dependents as written on the Social Security cards, and dates of birth for taxpayers and all dependents, especially new dependents.
□ Address, (city, state, zip), telephone number, and e-mail address.
□ Marital Status: Single ___ Married ___ Head of Household ___ Separated ___
□ Number of Dependents: ___ Did any dependents have any income? Yes ___ No ___
□ Do all dependents live with you? Yes ___ No ___
TYPES OF INCOME:
□ Wages - All W-2's □ Income from Rentals - All 1099-MISC
□ Pensions/Retirements - 1099-R □ Business Income - All 1099-MISC
□ Social Security - SSA-1099 □ Farm Income
□ Bank Interest - 1099-INT □ Alimony Received - Total amount
□ Dividends - 1099-DIV □ Unemployment - 1099-G
□ Commissions - 1099-MISC □ State Tax Refund - 1099-G
□ Tips and Gratuities □ Miscellaneous - Jury Duty, Gambling, Other
□ Sales of Stock, Mutual Funds - 1099-B
BUSINESS INCOME & EXPENSE ITEMS: This list is not all encompassing. If you don’t see an expense listed below, ask.
Total (Gross) Income
Advertising
Auto: Parking &Tolls
Business Phone Expense
Cell Phone Expense
Subcontractors
Commissions Paid
Insurance
Interest Paid
General Office Expense
Rent/Lease Fees Paid Legal or Professional Fees
Repairs
Cleaning/Maintenance Dues & Publications
Equipment/Supplies
Tools
License Fees/Taxes Paid
Utilities
Education Expense
Association Dues
Bank/Credit Card Fees
Postage
Meals/Entertainment
Business Miles & Total Miles Asset Purchases
Hotel/Travel Expense
ADDITIONAL ITEMS FOR RENTAL PROPERTIES:
Keys
Condo/PUD Fees
Management Fees
Mortgage Statements
Yard Work
Termite Treatment Expense
Utilities
Mileage/Travel
Other
DEDUCTIONS/CREDITS TO INCOME:
Self-employed Health Insurance
IRAs /Keogh/SEPs
Student Loan Interest
Medical Savings Account
Teacher Expense
Child Tax Credit
Penalty on Early Withdrawal of Savings
Foreign Tax Paid
American Opportunity/HOPE/Lifetime Learning Expenses
Adoption Expenses
* Total Alimony Paid: Must have name and Social Security number of recipient, and amount paid.
* Child Care/Day Care Credit: Must have name, address, Social Security number or EIN of provider, and amount paid.
ESTIMATED TAXES PAID:
Date payment was made, and the amount paid for each Federal and State quarterly tax estimate.
ITEMIZED DEDUCTIONS:
MEDICAL
Medical & Dental bills
Prescriptions
Glasses/Contact Lenses
Out-of-pocket expenses
Medical miles
Lab fees
Hearing Aids
Medical/dental/long term care insurance
TAXES
Prior year state tax paid
City/local tax
Sales tax
Real estate tax
Personal property tax Other
CHARITABLE CONTRIBUTIONS
Church
Boy/Girl Scouts
United Way/CFC
March of Dimes
American Heart
Easter Seals
Red Cross
MDA/MS
YWCA/YMCA
Salvation Army
FoodBank
Payroll deductions
Out-of-pocket Volunteer Expenses
Charitable miles
Other
List and Fair Market Value of household goods and clothing items given to Charitable Organizations.
Elite Bookkeeping & Tax Services will be happy to assist you with your tax needs. Feel free to call us at (800)416-3820.
Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.
Jan 18, 2012
Tax Preparer Questions
Contributed by Sara Zaro- Enrolled Agent, Certified Bookkeeper
Elite Bookkeeping & Tax Services
If you pay someone to prepare your tax return, the IRS urges you to choose that preparer wisely. Taxpayers are legally responsible for what’s on their tax return even if it is prepared by someone else. So, it is important to choose carefully when hiring an individual or firm to prepare your return. Most return preparers are professional, honest and provide excellent service to their clients.
This year, the IRS wants to remind all taxpayers that they should use only preparers who sign the returns they prepare and enter their Preparer Tax Identification Numbers (PTINs).
Here are a few points to keep in mind when someone else prepares your return:
• Check the person's qualifications. New regulations require all paid tax return preparers to have a Preparer Tax Identification Number (PTIN). In addition to making sure they have a PTIN, ask if the preparer is affiliated with a professional organization and attends continuing education classes. The IRS is also phasing in a new test requirement to make sure those who are not an enrolled agent, CPA, or attorney have met minimal competency requirements. Those subject to the test will become a Registered Tax Return Preparer once they pass it.
• Check the preparer's history. Check to see if the preparer has a questionable history with the Better Business Bureau and check for any disciplinary actions and licensure status through the state boards of accountancy for certified public accountants; the state bar associations for attorneys; and the IRS Office of Enrollment for enrolled agents.
• Find out about their service fees. Avoid preparers who base their fee on a percentage of your refund or those who claim they can obtain larger refunds than other preparers. Also, always make sure any refund due is sent to you or deposited into an account in your name. Under no circumstances should all or part of your refund be directly deposited into a preparer’s bank account.
• Ask if they offer electronic filing. Any paid preparer who prepares and files more than 10 returns for clients must file the returns electronically, unless the client opts to file a paper return. More than 1 billion individual tax returns have been safely and securely processed since the debut of electronic filing in 1990. Make sure your preparer offers IRS e-file.
• Make sure the tax preparer is accessible. Make sure you will be able to contact the tax preparer after the return has been filed, even after the April due date, in case questions arise.
• Provide all records and receipts needed to prepare your return. Reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items. Do not use a preparer who is willing to electronically file your return before you receive your Form W-2 using your last pay stub. This is against IRS e-file rules.
• Never sign a blank return. Avoid tax preparers that ask you to sign a blank tax form.
• Review the entire return before signing it. Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
• Make sure the preparer signs the form and includes his or her preparer tax identification number (PTIN). A paid preparer must sign the return and include his or her PTIN as required by law. Although the preparer signs the return, you are responsible for the accuracy of every item on your return. The preparer must also give you a copy of the return.
The IRS can help many taxpayers prepare their own returns without the assistance of a paid preparer. Before seeking a paid preparer, taxpayers might consider how much information is available directly from the IRS through the IRS Web site.
For assistance with your bookkeeping or tax needs, feel free to contact
Elite Bookkeeping & Tax Services at:
Toll Free (800)416-3820
http://www.elitebookkeeping.biz
EMAIL
Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.
Elite Bookkeeping & Tax Services
If you pay someone to prepare your tax return, the IRS urges you to choose that preparer wisely. Taxpayers are legally responsible for what’s on their tax return even if it is prepared by someone else. So, it is important to choose carefully when hiring an individual or firm to prepare your return. Most return preparers are professional, honest and provide excellent service to their clients.
This year, the IRS wants to remind all taxpayers that they should use only preparers who sign the returns they prepare and enter their Preparer Tax Identification Numbers (PTINs).
Here are a few points to keep in mind when someone else prepares your return:
• Check the person's qualifications. New regulations require all paid tax return preparers to have a Preparer Tax Identification Number (PTIN). In addition to making sure they have a PTIN, ask if the preparer is affiliated with a professional organization and attends continuing education classes. The IRS is also phasing in a new test requirement to make sure those who are not an enrolled agent, CPA, or attorney have met minimal competency requirements. Those subject to the test will become a Registered Tax Return Preparer once they pass it.
• Check the preparer's history. Check to see if the preparer has a questionable history with the Better Business Bureau and check for any disciplinary actions and licensure status through the state boards of accountancy for certified public accountants; the state bar associations for attorneys; and the IRS Office of Enrollment for enrolled agents.
• Find out about their service fees. Avoid preparers who base their fee on a percentage of your refund or those who claim they can obtain larger refunds than other preparers. Also, always make sure any refund due is sent to you or deposited into an account in your name. Under no circumstances should all or part of your refund be directly deposited into a preparer’s bank account.
• Ask if they offer electronic filing. Any paid preparer who prepares and files more than 10 returns for clients must file the returns electronically, unless the client opts to file a paper return. More than 1 billion individual tax returns have been safely and securely processed since the debut of electronic filing in 1990. Make sure your preparer offers IRS e-file.
• Make sure the tax preparer is accessible. Make sure you will be able to contact the tax preparer after the return has been filed, even after the April due date, in case questions arise.
• Provide all records and receipts needed to prepare your return. Reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items. Do not use a preparer who is willing to electronically file your return before you receive your Form W-2 using your last pay stub. This is against IRS e-file rules.
• Never sign a blank return. Avoid tax preparers that ask you to sign a blank tax form.
• Review the entire return before signing it. Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
• Make sure the preparer signs the form and includes his or her preparer tax identification number (PTIN). A paid preparer must sign the return and include his or her PTIN as required by law. Although the preparer signs the return, you are responsible for the accuracy of every item on your return. The preparer must also give you a copy of the return.
The IRS can help many taxpayers prepare their own returns without the assistance of a paid preparer. Before seeking a paid preparer, taxpayers might consider how much information is available directly from the IRS through the IRS Web site.
For assistance with your bookkeeping or tax needs, feel free to contact
Elite Bookkeeping & Tax Services at:
Toll Free (800)416-3820
http://www.elitebookkeeping.biz
Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.
Aug 10, 2011
Saving For Education
Contributed by Sara Zaro, Pres.
Elite Bookkeeping & Tax Services
Planning for educational expenses can be challenging when there are so many options out there for your clients to choose from. The following information outlines some of the choices available to them and explains the tax benefits associated with these options. Together you can use this newsletter to review options and potentially come up with a feasible plan for managing educational expenses.
Planning for educational expenses is no easy task. It’s hard to know how much to set aside or where to invest it. Here is a brief summary of some of the options available to you and the tax benefits associated with these options. This is by no means an exhaustive list; however it should provide you with a general knowledge with which to move forward. If after reading this you find that you have questions or would like to discuss any of the information in more depth, please give me a call.
College Facts
Before we explore the different options available for paying and saving for college, let’s first look at what going to college costs. The following information refers to the 2010-2011 school year. Keep in mind that tuition and fees at public four year colleges and universities has gone up an average of 5.6% per year beyond the rate of general inflation.
Public 2 yr: $2,713, R&B negligible
Public 4 yr, In-state: $7,605, R&B $8,535
Public 4 yr, Out of state: $19,595, R&B $8,535
Private 4 yr. Nonprofit: $27,293, R&B $9,700
Private 4 yr. For profit: $13,935, R&B neglible
By the time your child or grandchild graduates high school, it’s hard to know what your savings goal should be. There are several websites that offer a calculator that helps you predict how much a higher education will cost. Savingforcollege.com is one such website and it also offers up a wealth of information about paying for college.
Paying for College
There are a lot of ways a college education can be paid for, including both out of pocket expenses and financial aid such as scholarships, grants, loans, fellowships and work study programs. Financial aid is an important thing to keep in mind when planning how to pay for a college education. Colleges calculate student financial aid by calculating the cost of attendance (COA) then subtracting the expected family contribution (EFC). Most colleges use the information obtained from the student’s Free Application for Federal Student Aid (FASFA) form to calculate the EFC.
The formula for this calculation is made up of four parts outlined below:
1. 50% of student’s income (Adjusted Gross Income (AGI) plus untaxed income and benefits, less income protection allowance, less deductions for certain taxes)
2. 20% of certain student’s assets
3. 22-27% of parents income (AGI plus untaxed income and benefits, less income protection allowance, less deductions for certain taxes, less employment expense)
4. 2.6-5.6% of certain parent’s assets less asset protection allowance.
It’s important to remember that tax savings are often dwarfed by potential financial aid awards. Shifting assets into your child or grandchild’s name now in order to shift the tax burden of the income may later reduce their financial aid eligibility. Be sure to discuss the future impact of any tax saving transactions with your tax professional to help reduce the potentially negative impact on financial aid.
Saving for College
There are several ways to invest and save specifically for the expense of college. Having a working understanding of your options will help you to decide which is best for your needs and circumstance. Here are four options to consider. The tax benefits of the following options come from using the funds for qualified higher education expenses. In each case it is important to remember to reduce the qualified higher education expenses by tax exempt educational benefits such as the American Opportunity Tax Credit, the Lifetime Learning Credit, QTP payments or reimbursements, Coverdell Education Savings Account payments, VA benefits, grants, scholarships and fellowships.
Education Savings Bonds
Savings bonds have long been given to a child or grandchild as an investment in that child’s future. They are a very safe investment with a low to moderate return. The interest earned on the savings bond is tax free if the bond proceeds (principal plus interest) are used to pay for qualified higher education expenses. If you elect to exclude the interest on your tax return, it must be done in the year you redeem the savings bond.
Traditional and Roth IRA’s
IRA’s are usually thought of as a way to save for retirement because there is typically a 10% penalty for funds withdrawn before age 59 ½. However, they should not be overlooked when considering saving for education. With a traditional IRA, your contributions can be tax deductible and can grow tax deferred. With a Roth IRA, your contributions aren’t deductible, but they do have the potential to grow tax free. With either option, you can contribute 100% of your earned income up to the annual contribution limit ($5,000 or $6,000 for 50 and older). With a traditional IRA, if you and/or your spouse have earned income and you are filing jointly, you are eligible to make contributions until the year you reach 70 ½ years old. There is no age limit with a Roth IRA, however your modified adjusted gross income must fall within certain limits depending on your filing status. If you aren’t eligible to contribute to a Roth Ira, consider converting your Traditional IRA over and enjoy tax free earnings in the future.
Coverdell Education Savings Accounts (CESA)
Coverdell Education Savings Accounts are a very attractive college savings vehicle for many people. With a CESA you can make non-deductible contributions to a specially designated investment trust account. The account grows federal tax free and when used for qualified higher education expenses, withdrawals are also tax free. If funds are used for something other than qualified education expenses, then there is a 10% penalty and income tax must be paid on the earnings.
CESAs allow anyone to deposit up to $2,000 a year for an eligible beneficiary without being taxed on earnings, so long as their modified adjusted gross income falls within the allowable limits. Contributions can come from family, friends, neighbors and even corporations. The eligible beneficiary must be under age 18 at the time of deposit and must use the funds before age 30. If the funds are not withdrawn before the beneficiary reaches age 30, a portion of the earnings on the account will be taxable and subject to an additional 10% tax. These taxes may be avoided by rolling the account over for another family member. The age 18 and age 30 limitations are waived in special needs cases. Beneficiaries of CESAs should receive a form that shows the amount contributed during the year. If the amount reported exceeds the $2,000 limit, corrective action should be taken as soon as possible in order to avoid a 6% excise tax.
As mentioned earlier, some of these savings options can have an adverse impact on the beneficiary’s eligibility for financial aid. CESAs are treated as an asset of the account holder. If the account holder is a student, this could have a high impact on eligibility; however, if the account is owned by a dependent student, it is considered an asset of the parent for financial aid purposes. If the account is owned by the parent, there is a low impact on financial aid regardless. Also, qualified distributions from a CESA are not counted as income on the FASFA and therefore do not reduce eligibility.
529 Plans
A 529 Plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. The state sets up the plan with an asset management company of its choice and you open an account with that asset management company according to the state’s predetermined plan features. Every state now has at least one 529 Plan available, and it is up to each state to determine what its plan will look like. Fortunately, you are not restricted to your state’s 529 Plan. You can live in Vermont, choose a plan from Iowa and go to school in California. It pays to research a variety of plans being offered to ensure that you choose the one best suited to your needs.
The benefits of a 529 Plan are similar to those of a CESA. You pay no federal taxes on the accounts earnings provided that when they are withdrawn they are used for qualified education expenses. In most states, earnings are also tax deferred. As with a CESA, 529 Plans should be reported as a parental assent when owned by a dependent student. Anyone can contribute, but unlike a CESA there are no income limitations that might make you ineligible. There is also no age limit for when money has to be used. If the beneficiary chooses not to attend college, the account can be rolled over to another family member. If the beneficiary ends up getting a scholarship, any unused money can be withdrawn without paying a penalty, just the taxes. Perhaps the greatest difference between a CESA and a 529 Plan is who has control of the account. With a CESA, the beneficiary typically gains control of the account at age 18. However, with a 529 Plan, you retain control of the account.
There are two types of 529 plans. The first is a prepaid tuition plan that is state sponsored and has residency requirements. This option allows you to lock in tuition prices at eligible colleges and universities, which provides a hedge against tuition inflation. All prepaid plans cover tuition and mandatory fees, though some allow you to purchase a room and board option or use excess tuition credits for other qualified expenses. The second type of 529 Plan available is the college savings plan. While this option doesn’t allow you to lock in college costs at today’s rate, it can be more appealing due to its high flexibility. There are no age or residency restrictions and no contribution limits. All investment options come with risks; however there are age based portfolios available that automatically shift towards more conservative investments as the beneficiary moves closer to college age which reduces the risk.
You can find more information regarding specific plans in their offering circular, or disclosure statement. The National Association of State Treasurers created the College Savings Plan Network which provides links to most 529 plan websites.
Planning for education expenses is no small task. Your tax professional can give you more detailed information about the options discussed here. It is important to ask questions so you can be as informed as possible when moving forward. Naturally, the earlier you begin saving for college, the more money you will accrue. All of these options will have some impact on financial aid, so be sure to take everything into consideration.
For more information about Elite Bookkeeping & Tax Services visit
http://www.elitebookkeeping.biz
Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.
Elite Bookkeeping & Tax Services
Planning for educational expenses can be challenging when there are so many options out there for your clients to choose from. The following information outlines some of the choices available to them and explains the tax benefits associated with these options. Together you can use this newsletter to review options and potentially come up with a feasible plan for managing educational expenses.
Planning for educational expenses is no easy task. It’s hard to know how much to set aside or where to invest it. Here is a brief summary of some of the options available to you and the tax benefits associated with these options. This is by no means an exhaustive list; however it should provide you with a general knowledge with which to move forward. If after reading this you find that you have questions or would like to discuss any of the information in more depth, please give me a call.
College Facts
Before we explore the different options available for paying and saving for college, let’s first look at what going to college costs. The following information refers to the 2010-2011 school year. Keep in mind that tuition and fees at public four year colleges and universities has gone up an average of 5.6% per year beyond the rate of general inflation.
Public 2 yr: $2,713, R&B negligible
Public 4 yr, In-state: $7,605, R&B $8,535
Public 4 yr, Out of state: $19,595, R&B $8,535
Private 4 yr. Nonprofit: $27,293, R&B $9,700
Private 4 yr. For profit: $13,935, R&B neglible
By the time your child or grandchild graduates high school, it’s hard to know what your savings goal should be. There are several websites that offer a calculator that helps you predict how much a higher education will cost. Savingforcollege.com is one such website and it also offers up a wealth of information about paying for college.
Paying for College
There are a lot of ways a college education can be paid for, including both out of pocket expenses and financial aid such as scholarships, grants, loans, fellowships and work study programs. Financial aid is an important thing to keep in mind when planning how to pay for a college education. Colleges calculate student financial aid by calculating the cost of attendance (COA) then subtracting the expected family contribution (EFC). Most colleges use the information obtained from the student’s Free Application for Federal Student Aid (FASFA) form to calculate the EFC.
The formula for this calculation is made up of four parts outlined below:
1. 50% of student’s income (Adjusted Gross Income (AGI) plus untaxed income and benefits, less income protection allowance, less deductions for certain taxes)
2. 20% of certain student’s assets
3. 22-27% of parents income (AGI plus untaxed income and benefits, less income protection allowance, less deductions for certain taxes, less employment expense)
4. 2.6-5.6% of certain parent’s assets less asset protection allowance.
It’s important to remember that tax savings are often dwarfed by potential financial aid awards. Shifting assets into your child or grandchild’s name now in order to shift the tax burden of the income may later reduce their financial aid eligibility. Be sure to discuss the future impact of any tax saving transactions with your tax professional to help reduce the potentially negative impact on financial aid.
Saving for College
There are several ways to invest and save specifically for the expense of college. Having a working understanding of your options will help you to decide which is best for your needs and circumstance. Here are four options to consider. The tax benefits of the following options come from using the funds for qualified higher education expenses. In each case it is important to remember to reduce the qualified higher education expenses by tax exempt educational benefits such as the American Opportunity Tax Credit, the Lifetime Learning Credit, QTP payments or reimbursements, Coverdell Education Savings Account payments, VA benefits, grants, scholarships and fellowships.
Education Savings Bonds
Savings bonds have long been given to a child or grandchild as an investment in that child’s future. They are a very safe investment with a low to moderate return. The interest earned on the savings bond is tax free if the bond proceeds (principal plus interest) are used to pay for qualified higher education expenses. If you elect to exclude the interest on your tax return, it must be done in the year you redeem the savings bond.
Traditional and Roth IRA’s
IRA’s are usually thought of as a way to save for retirement because there is typically a 10% penalty for funds withdrawn before age 59 ½. However, they should not be overlooked when considering saving for education. With a traditional IRA, your contributions can be tax deductible and can grow tax deferred. With a Roth IRA, your contributions aren’t deductible, but they do have the potential to grow tax free. With either option, you can contribute 100% of your earned income up to the annual contribution limit ($5,000 or $6,000 for 50 and older). With a traditional IRA, if you and/or your spouse have earned income and you are filing jointly, you are eligible to make contributions until the year you reach 70 ½ years old. There is no age limit with a Roth IRA, however your modified adjusted gross income must fall within certain limits depending on your filing status. If you aren’t eligible to contribute to a Roth Ira, consider converting your Traditional IRA over and enjoy tax free earnings in the future.
Coverdell Education Savings Accounts (CESA)
Coverdell Education Savings Accounts are a very attractive college savings vehicle for many people. With a CESA you can make non-deductible contributions to a specially designated investment trust account. The account grows federal tax free and when used for qualified higher education expenses, withdrawals are also tax free. If funds are used for something other than qualified education expenses, then there is a 10% penalty and income tax must be paid on the earnings.
CESAs allow anyone to deposit up to $2,000 a year for an eligible beneficiary without being taxed on earnings, so long as their modified adjusted gross income falls within the allowable limits. Contributions can come from family, friends, neighbors and even corporations. The eligible beneficiary must be under age 18 at the time of deposit and must use the funds before age 30. If the funds are not withdrawn before the beneficiary reaches age 30, a portion of the earnings on the account will be taxable and subject to an additional 10% tax. These taxes may be avoided by rolling the account over for another family member. The age 18 and age 30 limitations are waived in special needs cases. Beneficiaries of CESAs should receive a form that shows the amount contributed during the year. If the amount reported exceeds the $2,000 limit, corrective action should be taken as soon as possible in order to avoid a 6% excise tax.
As mentioned earlier, some of these savings options can have an adverse impact on the beneficiary’s eligibility for financial aid. CESAs are treated as an asset of the account holder. If the account holder is a student, this could have a high impact on eligibility; however, if the account is owned by a dependent student, it is considered an asset of the parent for financial aid purposes. If the account is owned by the parent, there is a low impact on financial aid regardless. Also, qualified distributions from a CESA are not counted as income on the FASFA and therefore do not reduce eligibility.
529 Plans
A 529 Plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. The state sets up the plan with an asset management company of its choice and you open an account with that asset management company according to the state’s predetermined plan features. Every state now has at least one 529 Plan available, and it is up to each state to determine what its plan will look like. Fortunately, you are not restricted to your state’s 529 Plan. You can live in Vermont, choose a plan from Iowa and go to school in California. It pays to research a variety of plans being offered to ensure that you choose the one best suited to your needs.
The benefits of a 529 Plan are similar to those of a CESA. You pay no federal taxes on the accounts earnings provided that when they are withdrawn they are used for qualified education expenses. In most states, earnings are also tax deferred. As with a CESA, 529 Plans should be reported as a parental assent when owned by a dependent student. Anyone can contribute, but unlike a CESA there are no income limitations that might make you ineligible. There is also no age limit for when money has to be used. If the beneficiary chooses not to attend college, the account can be rolled over to another family member. If the beneficiary ends up getting a scholarship, any unused money can be withdrawn without paying a penalty, just the taxes. Perhaps the greatest difference between a CESA and a 529 Plan is who has control of the account. With a CESA, the beneficiary typically gains control of the account at age 18. However, with a 529 Plan, you retain control of the account.
There are two types of 529 plans. The first is a prepaid tuition plan that is state sponsored and has residency requirements. This option allows you to lock in tuition prices at eligible colleges and universities, which provides a hedge against tuition inflation. All prepaid plans cover tuition and mandatory fees, though some allow you to purchase a room and board option or use excess tuition credits for other qualified expenses. The second type of 529 Plan available is the college savings plan. While this option doesn’t allow you to lock in college costs at today’s rate, it can be more appealing due to its high flexibility. There are no age or residency restrictions and no contribution limits. All investment options come with risks; however there are age based portfolios available that automatically shift towards more conservative investments as the beneficiary moves closer to college age which reduces the risk.
You can find more information regarding specific plans in their offering circular, or disclosure statement. The National Association of State Treasurers created the College Savings Plan Network which provides links to most 529 plan websites.
Planning for education expenses is no small task. Your tax professional can give you more detailed information about the options discussed here. It is important to ask questions so you can be as informed as possible when moving forward. Naturally, the earlier you begin saving for college, the more money you will accrue. All of these options will have some impact on financial aid, so be sure to take everything into consideration.
For more information about Elite Bookkeeping & Tax Services visit
http://www.elitebookkeeping.biz
Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.
Jul 6, 2011
Bookkeeping, Tax Services and Training
Do you need help with bookkeeping or tax services? Elite Bookkeeping & Tax Services is ready to help you whether you're just starting out or looking to expand.
We offer one-on-one training to help you properly set up your corporate books. With our class we offer set up, training and the software for one low price.
Give us a call today toll free at (800)416-3820 and ask for Robyn or Sara.
Visit our web site at http://www.elitebookkeeping.biz
Follow us on Twitter @elitebookkeepg
Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.
Jun 29, 2011
New Tax Rules For 2011
Contributed by Sara Zaro, President
Elite Bookkeeping & Tax Services
In order to keep you informed of what’s new in the tax rules, here is a summary of key points you need to know for 2011. These key changes have been broken down into three categories: Personal Income Taxes, Personal and Business Retirement Changes, and Tax Changes for Businesses. This is not an exhaustive list. The intent here is to briefly explain the changes; especially the ones that can potentially benefit you. At the end, you’ll also find some additional tips to help you prepare and plan for the 2011 tax year. If after reading this information you think that a financial and tax planning review may be something you are interested in, or if you have any questions, please give me a call. The really significant methods to reduce your tax liability require not only planning ahead, but the expert guidance of a licensed tax practitioner.
Tax Savings opportunities to take advantage of as you plan for the current tax year:
Income Tax Provisions
These provisions were created or extended as a result of the Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the "2010 Tax Act")
• Maintaining long term capital gains and dividend tax rate at 15%
• If you have appreciated stock positions, you might consider liquidating the stock in order to recognize the capital gain at the current preferential rate of 15%.
• If you've avoided paying dividends to avoid paying income tax on the distribution, you should consider declaring and paying a dividend to take advantage of the reduced income tax rate of 15%.
• Allowing 100% bonus depreciation allowance for equipment placed in service between September 8, 2010 and December 31, 2011
• This includes buildings, machinery, vehicles, and furniture as well as intangible property such as patents, copyrights and computer software.
• Permits a Section 179 deduction for property placed in service up to $500,000
• Be aware of availability of bonus depreciation and Sec 179 deductions to place equipment in service-or upgrade computers and software during 2011.
• Permitting taxpayers to elect through 2011 to deduct State and local sales taxes in lieu of State and local income taxes
Personal Income Taxes
Payroll Tax Holiday
Employees will only pay 4.2% OASDI (Social Security) tax on compensation received during 2011, rather than the 6.2%, up to $106,800 which is the wage base for 2011. Beginning in 2011, self-employed persons will pay only 10.4% Social Security self-employment taxes on self-employment income up to the wage base for 2011 ($106,800). In both cases, the maximum savings for 2011 will be $2,136 (2% of the wage base) per taxpayer. If both spouses earn at least as much as the wage base, the maximum savings will be $4,272.
"Green” Upgrades
The majority of tax credits for energy efficiency home improvements expired at the end of 2010. However, you can still get the 30% credit (no cap) on larger “green” home improvements such as installing solar panels, wind turbines or geothermal power. The new tax credit for energy efficient home improvements has caps on specific items, as well as caps your tax credits, on small improvements like insulation, energy efficient windows, and HVAC, to $500 for your lifetime.
Health Plan Reimbursements
Beginning this year, over the counter medications cannot be reimbursed with excludible income through a health flexible spending arrangement (FSA), health reimbursement account (HRA), health savings account (HSA), or Archer MSA (medical savings account) unless the medicine is prescribed by a doctor or is insulin. This new rule applies to amounts paid after 2010, however it does not apply to amounts paid in 2011 for medications or drugs bought prior to Jan 1 2011. Additionally, for distributions after 2010, the additional tax on distributions from an HSA that are not used for qualified medical expenses increases from 10% to 20% of the disbursed amount. Archer MSA increases from 15% to 20% of the disbursed amount.
Personal and Business Retirement Changes
Retirement Plans
Income limitations on the ability to convert a traditional IRA to a Roth IRA have been eliminated. Therefore any taxpayer may choose to convert from IRA to Roth IRA. Qualified distributions from Roth IRA are not included in gross taxable income and there are no minimum distributions from Roth IRA. Contributions to Roth IRA ARE NOT deductible and the value of the traditional IRA account that is converted IS included in taxpayer's taxable income in such year and subject to current income tax rates.
Despite the resulting tax liability, this conversion may be worth considering if you’re working under the assumption that income tax rates will increase in the future. By converting to a Roth IRA, it's possible to "lock in" a lower effective tax rate. Also, converting a portion of IRA to Roth IRA, a taxpayer has “diversified” their IRA assets by presenting the opportunity to take distributions from a Roth IRA which are not subject to income tax. This minimizes the overall income tax in a given (future) tax year.
Through the end of 2011, a taxpayer over 701/2 years old may direct distribution of up to 100k from their IRA to a qualified public charity; this amount will count toward the taxpayer’s required minimum distribution, but is excluded from the taxpayer’s taxable income. Taxpayers will not receive a charitable deduction for the donation, however the exclusion of the distribution from taxable income provides a greater income tax benefit.
After December 31, 2010, small employers may provide employees with a "simple cafeteria plan." An employer that uses this kind of plan gets safe harbor from the nondiscrimination requirements for cafeteria plans as well as from the requirements for certain types for qualified benefits offered under a cafeteria plan, including group term life insurance, benefits under a self-insured medical expense reimbursement plan, and benefits under a dependent care assistance program.
Tax Changes for Businesses
Built in Gain Tax
C corporations that elect to be taxed as an S corporation may be subject to tax on the sale of appreciated assets owned at the time the S election is made - the “built in gain tax." This tax is imposed upon the sale of an asset within a certain period of time after S election-generally 10 years. However, in 2011, this period is reduced to 5 years. For an S corporation with appreciated assets potentially subject to the Built in Gain Tax, if the election was made effective in 2006 or earlier, the appreciated assets could be sold prior to December 31, 2011 without the imposition of Built in Gain Tax. The 10-yr period is scheduled to be effective January 1 2012, so S corporations and their shareholders should consider selling assets that otherwise would be subject to the Built in Gain Tax in 2011.
Up-to-$1000 credit for “retained workers”
Employers may claim a “retention credit” for retaining qualifying new employees (some formerly unemployed workers who meet specific requirements). The amount of the credit is either $1000 or 6.2% of wages, whichever’s less, paid to the retained qualified employee during a 52 consecutive week period. The wages for such employment for the last 26 weeks must be at least 80% of the wages earned in the first 26 weeks. This credit may be claimed for a qualified retained worker for the first tax year ending after March 18, 2010, assuming the retained employee satisfies the 52 consecutive week requirement. Just a reminder, this credit only applies to qualifying employees hired after February 3, 2010 and before January 1, 2011.
There are a lot of tax changes coming your way and likely your business is experiencing some unusual ups and downs. Here are some additional tips to get your tax planning for 2011 off to the right start:
• Get your 2011 bookkeeping caught up as soon as possible with projections for the year. Is your income going up, down or staying the same?
• Check for state nexus issues. Are there are other states you now need to plan for?
• What new projects or investments are coming up that may change your current strategy?
• Review your income projections, state nexus changes and tax law changes with your EA at a minimum three times: Now, September (creating your year-end planning) and December.
There are also some tax breaks that you should be thinking about this year, and every year. Plan for deductions, such as mortgage interest and points paid on refinancing. Keep receipts and documentation of goods and money donated to charity. You can even get a mileage deduction when you travel on behalf of working for charity, so note this information. Other tax breaks include those related to your home office and home business. Think about what you might spend your money on this year, and then prepare yourself to properly document it so that you can minimize your tax liability.
For more information contact Elite Bookkeeping & Tax Services at
(800)416-3820.
Visit our web site at http://www.elitebookkeeping.biz
Follow us on Twitter at @elitebookkeepg
Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.
Elite Bookkeeping & Tax Services
In order to keep you informed of what’s new in the tax rules, here is a summary of key points you need to know for 2011. These key changes have been broken down into three categories: Personal Income Taxes, Personal and Business Retirement Changes, and Tax Changes for Businesses. This is not an exhaustive list. The intent here is to briefly explain the changes; especially the ones that can potentially benefit you. At the end, you’ll also find some additional tips to help you prepare and plan for the 2011 tax year. If after reading this information you think that a financial and tax planning review may be something you are interested in, or if you have any questions, please give me a call. The really significant methods to reduce your tax liability require not only planning ahead, but the expert guidance of a licensed tax practitioner.
Tax Savings opportunities to take advantage of as you plan for the current tax year:
Income Tax Provisions
These provisions were created or extended as a result of the Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the "2010 Tax Act")
• Maintaining long term capital gains and dividend tax rate at 15%
• If you have appreciated stock positions, you might consider liquidating the stock in order to recognize the capital gain at the current preferential rate of 15%.
• If you've avoided paying dividends to avoid paying income tax on the distribution, you should consider declaring and paying a dividend to take advantage of the reduced income tax rate of 15%.
• Allowing 100% bonus depreciation allowance for equipment placed in service between September 8, 2010 and December 31, 2011
• This includes buildings, machinery, vehicles, and furniture as well as intangible property such as patents, copyrights and computer software.
• Permits a Section 179 deduction for property placed in service up to $500,000
• Be aware of availability of bonus depreciation and Sec 179 deductions to place equipment in service-or upgrade computers and software during 2011.
• Permitting taxpayers to elect through 2011 to deduct State and local sales taxes in lieu of State and local income taxes
Personal Income Taxes
Payroll Tax Holiday
Employees will only pay 4.2% OASDI (Social Security) tax on compensation received during 2011, rather than the 6.2%, up to $106,800 which is the wage base for 2011. Beginning in 2011, self-employed persons will pay only 10.4% Social Security self-employment taxes on self-employment income up to the wage base for 2011 ($106,800). In both cases, the maximum savings for 2011 will be $2,136 (2% of the wage base) per taxpayer. If both spouses earn at least as much as the wage base, the maximum savings will be $4,272.
"Green” Upgrades
The majority of tax credits for energy efficiency home improvements expired at the end of 2010. However, you can still get the 30% credit (no cap) on larger “green” home improvements such as installing solar panels, wind turbines or geothermal power. The new tax credit for energy efficient home improvements has caps on specific items, as well as caps your tax credits, on small improvements like insulation, energy efficient windows, and HVAC, to $500 for your lifetime.
Health Plan Reimbursements
Beginning this year, over the counter medications cannot be reimbursed with excludible income through a health flexible spending arrangement (FSA), health reimbursement account (HRA), health savings account (HSA), or Archer MSA (medical savings account) unless the medicine is prescribed by a doctor or is insulin. This new rule applies to amounts paid after 2010, however it does not apply to amounts paid in 2011 for medications or drugs bought prior to Jan 1 2011. Additionally, for distributions after 2010, the additional tax on distributions from an HSA that are not used for qualified medical expenses increases from 10% to 20% of the disbursed amount. Archer MSA increases from 15% to 20% of the disbursed amount.
Personal and Business Retirement Changes
Retirement Plans
Income limitations on the ability to convert a traditional IRA to a Roth IRA have been eliminated. Therefore any taxpayer may choose to convert from IRA to Roth IRA. Qualified distributions from Roth IRA are not included in gross taxable income and there are no minimum distributions from Roth IRA. Contributions to Roth IRA ARE NOT deductible and the value of the traditional IRA account that is converted IS included in taxpayer's taxable income in such year and subject to current income tax rates.
Despite the resulting tax liability, this conversion may be worth considering if you’re working under the assumption that income tax rates will increase in the future. By converting to a Roth IRA, it's possible to "lock in" a lower effective tax rate. Also, converting a portion of IRA to Roth IRA, a taxpayer has “diversified” their IRA assets by presenting the opportunity to take distributions from a Roth IRA which are not subject to income tax. This minimizes the overall income tax in a given (future) tax year.
Through the end of 2011, a taxpayer over 701/2 years old may direct distribution of up to 100k from their IRA to a qualified public charity; this amount will count toward the taxpayer’s required minimum distribution, but is excluded from the taxpayer’s taxable income. Taxpayers will not receive a charitable deduction for the donation, however the exclusion of the distribution from taxable income provides a greater income tax benefit.
After December 31, 2010, small employers may provide employees with a "simple cafeteria plan." An employer that uses this kind of plan gets safe harbor from the nondiscrimination requirements for cafeteria plans as well as from the requirements for certain types for qualified benefits offered under a cafeteria plan, including group term life insurance, benefits under a self-insured medical expense reimbursement plan, and benefits under a dependent care assistance program.
Tax Changes for Businesses
Built in Gain Tax
C corporations that elect to be taxed as an S corporation may be subject to tax on the sale of appreciated assets owned at the time the S election is made - the “built in gain tax." This tax is imposed upon the sale of an asset within a certain period of time after S election-generally 10 years. However, in 2011, this period is reduced to 5 years. For an S corporation with appreciated assets potentially subject to the Built in Gain Tax, if the election was made effective in 2006 or earlier, the appreciated assets could be sold prior to December 31, 2011 without the imposition of Built in Gain Tax. The 10-yr period is scheduled to be effective January 1 2012, so S corporations and their shareholders should consider selling assets that otherwise would be subject to the Built in Gain Tax in 2011.
Up-to-$1000 credit for “retained workers”
Employers may claim a “retention credit” for retaining qualifying new employees (some formerly unemployed workers who meet specific requirements). The amount of the credit is either $1000 or 6.2% of wages, whichever’s less, paid to the retained qualified employee during a 52 consecutive week period. The wages for such employment for the last 26 weeks must be at least 80% of the wages earned in the first 26 weeks. This credit may be claimed for a qualified retained worker for the first tax year ending after March 18, 2010, assuming the retained employee satisfies the 52 consecutive week requirement. Just a reminder, this credit only applies to qualifying employees hired after February 3, 2010 and before January 1, 2011.
There are a lot of tax changes coming your way and likely your business is experiencing some unusual ups and downs. Here are some additional tips to get your tax planning for 2011 off to the right start:
• Get your 2011 bookkeeping caught up as soon as possible with projections for the year. Is your income going up, down or staying the same?
• Check for state nexus issues. Are there are other states you now need to plan for?
• What new projects or investments are coming up that may change your current strategy?
• Review your income projections, state nexus changes and tax law changes with your EA at a minimum three times: Now, September (creating your year-end planning) and December.
There are also some tax breaks that you should be thinking about this year, and every year. Plan for deductions, such as mortgage interest and points paid on refinancing. Keep receipts and documentation of goods and money donated to charity. You can even get a mileage deduction when you travel on behalf of working for charity, so note this information. Other tax breaks include those related to your home office and home business. Think about what you might spend your money on this year, and then prepare yourself to properly document it so that you can minimize your tax liability.
For more information contact Elite Bookkeeping & Tax Services at
(800)416-3820.
Visit our web site at http://www.elitebookkeeping.biz
Follow us on Twitter at @elitebookkeepg
Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.
Jun 25, 2011
Safeguarding Tax and Financial Records
The IRS published a newswire some time ago urging people to safeguard their records.
Actually whether or not you live in a hurricane area, there are many things that can happen to destroy important records. We all think about big natural disasters such as hurricanes, tornados, earthquakes, etc. But there are other disasters that can affect anyone no matter where you live. They include such things as fires, flooded basements, theft, accidentally throwing things away, etc.
If you happen to get audited, the IRS doesn't particularly care why you no longer have your records and they will go off the records they can gather. The IRS can provide you with W-2 information, income from interest, dividends, stock sales, 1099 information, interest paid on government student loans, and how much mortgage interest you paid to a financial institution. They don't have records of business deductions, donations, dependents, alimony paid, daycare expenses, medical expenses, etc.
There are several ways you can choose to keep your records safe.
1. Paperless Record keeping: With the wide use of computers, internet bank records, W-2 forms, and other documents can easily be downloaded to your computer. Other documents can be scanned in. This can then be saved onto a USB drive as a back up which can be store in a safety deposit box and/or sent to a relative in another city.
2. CD or DVD: Records can be scanned into the computer and burned onto a CD or DVD. Several copies can be made inexpensively and stored in several places.
3. Record Keeping Companies: There are companies that will copy and keep your records in their vaults so that in the case of a disaster they can provide you with a copy.
4. Protective Boxes and Safes: You can purchase fire proof and water proof boxes and small safes to keep valuable records in. They can work well if you don't live in a place were place where a natural disaster will likely take down the entire house.
For more information contact Elite Bookkeeping & Tax Services Toll Free (800)416-3820 or visit our web site at http://www.elitebookkeeping.biz
Follow us on Twitter at @elitebookkeepg
Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.
Actually whether or not you live in a hurricane area, there are many things that can happen to destroy important records. We all think about big natural disasters such as hurricanes, tornados, earthquakes, etc. But there are other disasters that can affect anyone no matter where you live. They include such things as fires, flooded basements, theft, accidentally throwing things away, etc.
If you happen to get audited, the IRS doesn't particularly care why you no longer have your records and they will go off the records they can gather. The IRS can provide you with W-2 information, income from interest, dividends, stock sales, 1099 information, interest paid on government student loans, and how much mortgage interest you paid to a financial institution. They don't have records of business deductions, donations, dependents, alimony paid, daycare expenses, medical expenses, etc.
There are several ways you can choose to keep your records safe.
1. Paperless Record keeping: With the wide use of computers, internet bank records, W-2 forms, and other documents can easily be downloaded to your computer. Other documents can be scanned in. This can then be saved onto a USB drive as a back up which can be store in a safety deposit box and/or sent to a relative in another city.
2. CD or DVD: Records can be scanned into the computer and burned onto a CD or DVD. Several copies can be made inexpensively and stored in several places.
3. Record Keeping Companies: There are companies that will copy and keep your records in their vaults so that in the case of a disaster they can provide you with a copy.
4. Protective Boxes and Safes: You can purchase fire proof and water proof boxes and small safes to keep valuable records in. They can work well if you don't live in a place were place where a natural disaster will likely take down the entire house.
For more information contact Elite Bookkeeping & Tax Services Toll Free (800)416-3820 or visit our web site at http://www.elitebookkeeping.biz
Follow us on Twitter at @elitebookkeepg
Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.
May 30, 2011
A Golden Opportunity For Gifts
Video courtesy of Journal of Accountancy
Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.
May 26, 2011
Seven Keys To Successful Corporate Tax Preparation
Many individuals look to April 15 every year with dread. For small and large corporations, it's not any different. No matter what type of taxes you're filing, there are many ways to make the process easier. Here are seven keys to success with corporate tax preparation.
1) Know Your Deductions
2) Pay Quarterly Estimated Taxes
3) Remember Other Tax Deadlines
4) Remember Charitable Contributions
5) Ensure Employee Taxes Are Correct
6) Know Sales Tax Guidelines
7) Hire An Expert (It's important to start early!)
View full article
Elite Bookkeeping & Tax Services will be happy to assist you! We're here to help your business succeed. Contact us today at (800)416-3820.
1) Know Your Deductions
2) Pay Quarterly Estimated Taxes
3) Remember Other Tax Deadlines
4) Remember Charitable Contributions
5) Ensure Employee Taxes Are Correct
6) Know Sales Tax Guidelines
7) Hire An Expert (It's important to start early!)
View full article
Elite Bookkeeping & Tax Services will be happy to assist you! We're here to help your business succeed. Contact us today at (800)416-3820.
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