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Twenty-Two Last-Chance Opportunities for Tax Savings
August 23rd, 20091. Income. Up to $2,400 of unemployment compensation benefits are excluded from gross income by the recipient. However, the exclusion is not available for benefits received in tax years beginning after 2009 [IRC Sec. 85(c)].
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
LOCAL SAN JOSE ENTREUPENEUR ONE OF EIGHT TO WIN CONTEST!
July 30th, 2009Tammy Foley, owner of We Train U-2™, wins the opportunity to “pitch her business” to over 3,000 people at conference
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™ 9th 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.
Scams
July 6th, 2009
Be Aware of Scams
Charity Fraud
This scam preys on the public’s generosity in giving to reputable charities by soliciting funds for disreputable or fraudulent ones.
Foreign Lotteries
A call or letter tells consumers that they may have already won a big prize in a foreign lottery, obtainable merely by providing bank account or credit card information.
Foreign Money Offers
A “foreign government official” offers an opportunity to split a huge sum of money if he can just transfer funds to your bank account-and naturally, he needs your account information.
Identity Theft
This is on the rise! Be aware and take the steps to protect yourself as much as possible. Go to our website: www.WeKeepYourBooks.com and click on “NEWS” to check out our archived newsletter from March 16, 2009 to give you some tips on what to do to cover your bases!
Internet Auctions
Though thousands of legitimate transactions take place online each day, sometimes goods purchased never arrive or are less valuable than promised.
“Phishing”
Con artists look to gather personal information by asking consumers to “update” or “validate” their billing information, including credit card and Social Security numbers.
Sweepstakes
This very common scam tells consumers they have won something, and they need only pay a fee for processing, taxes or delivery to claim their prize.
Work at Home
This scam offers great payouts for little work at home, telling consumers they need only pay up-front supply, training or materials charges – charges they rarely recoup.
Hiring a Tax Person
June 29th, 2009|
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.
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| 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: 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. |
Lowering Property Taxes
June 24th, 2009House 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.
I hope this helps you during this economical difficult time.
Tammy
Avoid Identity Theft and Fraud
June 23rd, 20091. The next time you order checks have only your initials (instead of first name) and last name put on them. If someone takes your checkbook, they will not know if you sign your checks with just your initials or your first name, but your bank will know how you sign your checks.
2. Do not sign the back of your credit cards. Instead, put “PHOTO ID REQUIRED.”
3. When you are writing checks to pay on your credit card accounts, DO NOT put the complete account number on the “For” line. Instead, just put the last four numbers. The credit card company knows the rest of the number, and anyone who might be handling your check as it passes through all the check-processing channels will not have access to it.
4. Do not put phone numbers on your checks. If you have a PO Box, use that instead of your home address. If you do not have a PO Box, use your work address. Never have your SS# printed on your checks.
5. Place the contents of your wallet on a photocopy machine. Do both sides of each license, credit card, etc. You will know what you had in your wallet and all of the account numbers and phone numbers to call and cancel. Keep the photocopy in a safe place. Also carry a photocopy of your passport when traveling either here or abroad. We have all heard horror stories about fraud that is committed on us in stealing a name, address, Social Security number, credit cards.
6. When you check out of a hotel that uses cards for keys (and they all seem to do that now), do not turn the “keys” in. Take them with you and destroy them by placing a magnet on them. This will erase any assocation with you as the holder of the key. Those little cards have all of the information you gave the hotel, including address and credit card numbers and expiration dates. Someone with a card reader, or employee of the hotel, can access all that information with no problem whatsoever.
Here is some critical information to limit the damage in case this happens to you or someone you know:
1. We have been told we should cancel our credit cards immediately. The key is having the toll free numbers and your card numbers handy so you know whom to call. Keeep those where you can find them.
2. File a police report immediately in the jurisdiction where your credit cards, etc., were stolen. This proves to credit providers you were diligent, and this is a first step toward an investigation (if there ever is one). However, here is what is perhaps most important of all
3. Call the three national credit reporting organizations immediately to place a fraud alert on your name and Social Security number. The alert means any company that checks your credit knows your information was stolen, and they have to contact you by phone to authorize new credit.
Here are the numbers to contact about your wallet and contents being stolen:
1.) Equifax: 1-800-525-6285
2.) Experian (formerly TRW): 1-888-397-3742
3.) TransUnion: 1-800-680-7289
4.) Social Security Administration (fraud line): 1-800-269-0271
5.) Police Department (obtain local number of where item was stolen).
For more information:
http://www.scambusters.org/creditcardfraudprevention.html
11 Tips on How to find a Bookkeeper
June 23rd, 2009During this time of economic hardships business owners are trying to find ways to cut back. One of those ways is letting their bookkeeper or accounting go. I do not recommend letting your accounting or bookkeeping go since it is the pulse of knowing if your company is making money.
Hiring a bookkeeper can leave us flustered with not knowing who to trust. We sent out a question to find out what people do when looking for a bookkeeper. I hope this will help.
1. First I always try to get a reference thru word of mouth. If I can’t find what I need then I Google it. I also read the comments by other customers, if any negative I usually move to the next. I also like simple and intuitive websites!
2. As a start, I would Google “bookkeepers – San Jose California”. My criteria would depend upon my business requirements first, reference checking second, and then cost.
3. Today people would probably ask a friend or type San Jose Bookkeeper into Google. It use to be the phone book, but no more, of course.
4. If I needed a bookkeeper I would ask friends and family or look in the yellow pages on yahoo and look at reviews if any one posted a comment.
5. I would go to Google and put in San Jose Bookkeeping. Then talk to 3 or 4 sources to compare pricing and service. Would think of a few key items I need bookkeeping help with like: Payroll (picking out # of employees) to make comparison fare. Monthly Expenses into QuickBooks, Billing, Ease of how service is setup? I.e. communicating through email or personal office visits, etc., what are the rules or criteria of the bookkeeping service?
6. I’d send an email to friends to see if they knew of anyone. I’d search Yahoo and see what came up. Then I’d search that company/person to see if anything else came up on them. I would probably check the BBB to make sure there were no complaints against them. In order for me to feel comfortable they’d have to have a minimum of 10 years experience (probably the more, the better), and I’d ask them to give me the name of a client or two who would be willing to share their experience with me.
7. I would Google “Bookkeepers San Jose, CA” or, if I had a phone book handy I would look in the Yellow Pages!
8. I would look online for a bookkeeper. Craigslist, bookkepper.com, or the newspaper etc. I have a neighbor that is a bookkeeper and she advertises in our subdivision newsletter. I would just look for advertisements.
9. First we would look in the yellow pages. Second we would ask any accountants, CPA’s or Tax preparers for a recommendation. Third we would look in the newspaper under the SERVICES classification. Hope this helps.
10. I would call around to different, small CPA companies (and also to the corporate CFOs I know) and see if any of them could recommend anyone who worked for them or who worked free-lance. I would assume that they would be the people “in the know” who would be able to refer qualified people.
11. I would start with the Better Business Bureau Org. They rate businesses and in some cases provide recommendations. The next place would be with the State Franchise/Business Licensing department. Criteria for selecting a bookkeeping firm would length in business, any complaints filed, type of services and hours offered, Charges for the services and lastly interviewing candidates to see if there is a “connection” or comfort level with the individual, individuals, and the business.
We Train U-2 provides training for the business owners to help them understand their bookkeeping. If you are not doing your bookkeeping and have a bookkeeper our course will let you know what your bookkeeper should be doing for you and your company. Check out our online training courses page at www.wetrainu2.com.
