With unemployment nearing double digits, you may have friends or family members who are out of work—or you may be facing a layoff yourself. If so, you may be surprised to learn that unemployment benefits are treated just like regular wages and are subject to income tax.

If you have any questions please contact your tax preparer.

A temporary tax law rule provides some relief for individuals receiving unemployment benefits in 2009. The American Recovery and Reinvestment Act created special income exclusion for the first $2,400 of unemployment benefits received by an individual in 2009. However, any benefits over and above that amount will be taxed.

On the plus side, there may be tax write-offs available to unemployed individuals that can reduce the tax bite. Depending on an individual’s personal tax situation, deductible amounts may include:
1 Job-search expenses, including resume costs, employment agency fees, job counseling, travel costs, and the like.
2 Moving expenses in connection with a new job.
3 Education expenses for brush-up courses or new training.

The key here is to keep careful track of expenses. Make sure to keep receipts for all out-of-pocket costs

2. Personal deductions. Clients can claim a deduction (whether they itemize or claim the standard deduction) for sales or excises taxes paid on the purchase of a new vehicle. The deduction (phased out at higher income levels) does not apply to purchases after December 31, 2009 [IRC Sec. 164(b)(6)(G)].

3. Personal deductions. Clients who claim the standard deduction can take an additional deduction for state and local property taxes, up to a maximum of $500 ($1,000 for joint return filers). The deduction is not available for tax years beginning after 2009 [IRC Sec. 63(c)(7)].

4. Personal deductions. A client can elect to take an itemized deduction for state and local general sales taxes instead of an itemized deduction for state and local income taxes, but the election is available only for tax years beginning before Jan. 1, 2010 [IRC Sec. 164(b)(5)(I)].

5. Personal deductions. A client may claim an above-the-line deduction for “qualified tuition and related expenses” paid for the enrollment or attendance of the client, the client’s spouse, or a dependent at an eligible institution of higher education. The deduction cannot exceed $4,000 (phased out at higher income levels) and applies only to tax years beginning before January 1, 2010 [IRC Sec. 222(e)].

6. Personal deductions. The maximum deduction allowed annually for charitable donations is increased in the case of “qualified conservation contributions.” The increased deduction is not available for donations after December 31, 2009 [IRC Sec. 170(b)(1)(E)].

7. Business deductions. For tax years beginning before 2010, teachers in grades K-12 and other eligible educators can claim an above-the-line deduction for up to $250 of their out-of-pocket expenses for books and supplies used in the classroom [IRC Sec. 62(d)(1)].

8. Business deductions. A client can claim an additional 50% depreciation allowance for qualifying business machinery and equipment placed in service before January 1, 2010 [IRC Sec. 168(k)(2)(A)].

9. Business deductions. A client can claim a Section 179 expensing deduction for the first $250,000 of qualifying equipment and machinery placed in service during the year, subject to a phase out if more than $800,000 of eligible property is placed in service during the year. For tax years beginning after December 31, 2009, the maximum Section 179 deduction drops to $125,000 (adjusted for inflation) with the phase-out starting at the $500,000 level [IRC Sec. 179(b)(7)].

10. Business deductions. The cost of qualified leasehold improvement property, restaurant property, and retail space improvement property can be written off over 15 years. The 15-year write-off period is not available for property placed in service after December 31, 2009 [IRC Sec. 168(e)(3)(E)].

11. Business deductions. Business clients may claim enhanced deductions for donations of food inventory to a charitable organization if the organization uses the property solely for the care of the ill, the needy, or infants. The enhanced deduction does not apply to donations after December 31, 2009 [IRC Sec. 170(e)(3)(C)].

12. Business deductions. The maximum first-year depreciation deduction for passenger automobiles used for business purposes is increased by $8,000 for automobiles placed in service before 2010 [IRC Sec. 68(e)(3)(B)].

13. Business deductions. Certain qualifying machinery and equipment used in a farming business may be written off over a five-year cost recovery period. The original use of the property must begin with the taxpayer and the property must be placed in service before January 1, 2010 [IRC Sec. 168(e)(3)(B)].

14. Personal tax credits. A client who hasn’t owned a home during the previous three years can claim a first-time homebuyer credit of up to $8,000 (phased out at higher income levels) for the purchase of a principal residence. The credit can be claimed only for homes purchased before December 1, 2009 [IRC Sec. 36].

15. Business credits. Employers may claim a 20% income tax credit for qualifying differential pay paid to employees on active military duty. The credit expires for payments made after December 31, 2009 [IRC Sec. 45P].

16. Business credits. An eligible contractor may claim a credit of up to $2,000 for each qualified new energy efficient home that the contractor constructs and that is acquired from the contractor for use as a residence. The credit does not apply to homes acquired after December 31, 2009 [IRC Sec. 45L].

17. Alternative minimum tax. Clients can offset nonrefundable personal tax credits, such as the child and dependent care credit and the Lifetime Learning credit, against their alternative minimum liability. The offset will not be available for tax years beginning after 2009 [IRC Sec. 26(a)(2)].

18. Alternative minimum tax. For tax years beginning in 2009, the exemption amounts used in calculating a client’s alternative minimum taxable income of $70,950 for married couples filing a joint return and $46,700 for singles and heads of households. For tax years beginning after 2009, these amounts are scheduled to drop to $45,000 and $33,750, respectively [IRC Sec. 55(d)(1)].

19. Estimated taxes. For small business owners with adjusted gross income of $500,000 or less, the “required annual payment” of 2009 estimated taxes is the lesser of (1) 90% of the current year’s tax or (2) 90% of the prior year’s tax. For 2010, the prior-year’s-tax threshold rises to 100% (or 110% for clients with adjusted gross income of $150,000 or more) [IRC Sec. 6654(d)(1)].

20. Retirement plans. The requirement that an IRA owner age 70 ½ or over must receive a minimum distribution annually is suspended for 2009, but is reinstated in 2010 [IRC Sec. 401(a)(9)(H)].

21. Retirement plans. An IRA may exclude from income distributions of up to $100,000 annually if paid directly by the IRA trustee to charitable organization. The exclusion expires in tax years beginning after 2009 [IRC Sec. 408(d)(8)].

22. Employee benefits. Clients who are covered by employer-sponsored health plans and are laid off before January 1, 2010 can qualify for subsidized plan continuation (COBRA) coverage for up to nine months. Employers can claim a credit against employment taxes for the subsidies provided to employees [IRC Sec. 6432

Wednesday, July 29, 2009: After submitting an essay of 400 words or less explaining her business concept and how she does it, Tammy Foley was one of eight entrepreneurs selected out of thousands to “pitch her business” to an audience of over 3,000 at the eWomen Network™ 9^th Annual International Conference and Business Expo next month.  The conference draws entrepreneurs from all over the world.

“This is an exciting opportunity because my clients are entrepreneurs”, said Tammy Foley, President of San Jose’s We Train U-2™.  “I understand their needs, as I have owned my own business for 26 years.  In these tough economic times, small business owners have the weight of the world on their shoulders.  With the Obama administration focusing on small business as the key to better economic health, more and more entrepreneurs are emerging without the knowledge of accounting, taxes or payroll.”

We Train U-2™ provides online QuickBooks^® training for business owners that want control over their small business finances.  In the comfort of their own home, the business owner can learn how to set up QuickBooks^® and enter their own business receipts.  By teaching the basic modules that every owner needs to know, there is no wasted time in learning software that doesn’t apply.

“What sets Tammy apart from the rest is she offers an easy-to-learn online method and 24/7 support” said Pam Bruins, one of the company’s Certified QuickBooks^® Pro Advisors.  “These are not pre-scheduled courses.  These are courses taken at the business owner’s convenience with a “Call Me” button that immediately connects you by phone to a Certified QuickBooks^® Pro Advisor if you have a question, whether it’s midnight in New York or 3:00 AM in California.  I think this unique concept and unheard of customer support is why Tammy and We Train U-2™ were selected to present at the conference.”

We Train U-2™ provides simple solutions to complicated accounting problems through training, consulting and excellent customer service, 24 hours a day 7 days a week!  Please visit www.WeTrainU2.com if you’d like more information, or contact Tammy Foley at (408) 287-4637 or via email at tammy@wetrainu2.com.

Admit it – there’s no escape. You can choose wisely to begin the process of doing your taxes. Another day of procrastination is not going to benefit you or ultimately change the outcome.  

  1. What type of firm are they?  What staff is available to you?  Will there be a CPA, staff accountant, or support staff doing much of your work?  What expertise is available to you such as audits, tax advice, computer specialists, do they handle complicated issues such as multiple states’ tax returns, and do they offer payroll help?

 2. What experience do they have?  Do they have the skills you need in an accountant?  Give the accountant a brief overview of where you see your business going in the next 5 years and see what suggestions he or she would make to help you meet your business goals.

3. Do they have experience in the type of industry you are in?  Do they currently or have they recently worked with clients with similar businesses? Are they up-to-date on special regulations needed to be successful in your type of business?

4. Are they properly licensed? Different industries demand that accountants have special qualifications to be able to file necessary reports. Do they have or are they working on getting these credentials?

5. What computer software are they familiar with?  Are they using or do they have other clients using the same software you have in place?  Do they support that software or will they encourage you to change types of software?

6. How do they bill? This is a much different question than how much do they charge, you need to know if they bill a flat fee or do they bill by the hour.

7. Will they be coming to your business to work on your financials or do they expect you to bring everything to their office? Can you email files to them or fax information as needed?

8. How timely are they? Can you expect your quarterly reports in two weeks after the end of quarter or by the end of the next month? Will you be receiving monthly reports and how soon after month end can you expect them?

9. How technical savvy are they? Are they proficient on the computer, and the internet? Are their skills current or are they using old technology that is outdated?

10. Are they currently involved in any pending lawsuits? This can be tricky, but it can be important to know if they are being sued over an allegedly bad audit, improper audit procedures, or fraudulent practices.

To find out more information on how to relieve some of your burden with these 15 tips, click on:
http://articles.moneycentral.msn.com/Taxes/PreparationTips/DoItRightYour15pointTaxChecklist.aspx
 

We have resources to help you out with this unwanted task. We can help you find the perfect tax preparer for your needs. Contact us today. ]]> http://blog.wetrainu2.com/hiring-a-tax-person/2009/06/29/feed/ 0 http://blog.wetrainu2.com/lowering-property-taxes/2009/06/24/ http://blog.wetrainu2.com/lowering-property-taxes/2009/06/24/#comments Wed, 24 Jun 2009 03:34:02 +0000 Tammy http://blog.wetrainu2.com/?p=44 House Value lower than the Market Value?

“If you think your property is being taxed on a value that is higher than its current market value, submit a Prop 8 temporary relief form or contact the Assessor’s Office, and ask for a review form. Assessment Review Requests should be submitted to the Assessor’s Office no later than August 15, of the current assessment year. After August 15, taxpayers are advised to file an assessment appeal with the Clerk of the Board…” click here for the rest of the article

Click here for the “How To” information from the Assessor’s Office.