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2012 began with great uncertainty over federal tax policy and now, with the end of the year approaching, that uncertainty appears to be far from any long-term resolution. A host of reduced tax rates, credits, deductions, and other incentives (collectively called the “Bush-era” tax cuts) are scheduled to expire after December 31, 2012. To further complicate planning, over 50 tax extenders are up for renewal, either having expired at the end of 2011 or scheduled to expire after 2012. At the same time, the federal government will be under sequestration, which imposes across-the-board spending cuts after 2012. The combination of all these events has many referring to 2013 as “taxmeggedon.” (more…)
In recent years, end-of-the-year tax planning for businesses has been complicated by uncertainty over the future availability of many tax incentives. This year is no different. In 2010, Congress extended many business tax incentives for one or two years. Now, those incentives have expired or are scheduled to expire. Whether they will be extended beyond 2012 is unclear as Congress debates the fate the Bush-era tax cuts and across-the-board spending cuts scheduled to take effect in 2013. In the meantime, you need to be aware of the expiring provisions and explore developing a multiyear tax strategy that takes into account various scenarios for the future of these incentives. (more…)
According to the IRS list of Frequently Asked Tax Questions, there is some confusion out there as to exactly when a taxpayer can claim someone as a dependent. So let’s see if we can shed some light on the subject.
There are two categories for claiming a dependent, a Qualifying Child, and a Qualifying Relative. In this article, we are looking at the requirements for a Qualifying Child. The IRS has a specific definition of what a child is. To claim someone as a dependent, they must pass 5 tests:
- Relationship to the Tax Payer
- Age of the individual
- Filing status
The thinking behind the infamous scarlet letter is alive and well in California government.
Last month Gov. Brown signed into law Senate Bill 459, concerning the misclassification of workers. In addition to the large fines for willful misclasification (up to $25,000 per violation), employers must post a notice on their website and “displayed prominently” in an area that is “accessible to all employees and the general public at each location where a violation. . .occurred.”
CCH Outlines Taxes Consumers Face as They Shop Online for Holidays
reprinted from cch.com (http://cch.com/press/news/2011/20111115t.asp)
This holiday season, online shoppers will find more states are looking to make sure gift givers also give their state its fair share – in terms of sales tax for online purchases, according to CCH, a Wolters Kluwer business and a leading global provider of tax, accounting and audit information, software and services (CCHGroup.com). Last year, online shoppers spent more than $1 billion just on Cyber Monday, and online shopping this holiday season is expected to continue to grow at a double-digit rate.
Step 71 of the Business Owners Handbook encourages business owners to establish ethics and community outreach programs early in their planning cycle, but many small business owners still question how some of these programs will help their business.
So, why am I bringing this up? I just spent last weekend at the Alzheimer Association’s Walk to end Alzheimer in Huntington Beach, and the event was packed with business teams – some not even associated with Alzheimer support or research. Why were these companies putting the funds forward, and donating their employee time, when there was little relation back to their fields? (more…)
As many of you have already wrapped-up your tax returns and finding someplace to keep all of the supporting documentation, one of the questions we often here is “How long should I keep this?”. Here’s what you need to keep and what you can throw out without fearing the wrath of the IRS.
I guess the off-the-cuff response to the question is “As long as it is relevant.”, but that doesn’t exactly help. So let’s look at specifics: (more…)
CIRCULAR 230 DISCLOSURE: Pursuant to Regulations Governing Practice Before the Internal Revenue Service, any tax advice contained herein is not intended or written to be used and cannot be used by a taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer.
It’s at the bottom of every email that our office sends out, and at the bottom of all of our web pages. Chances are, it’s even been at the bottom of a letter or two we have sent you. It’s the Circular 230 disclosure, and you will find it in some variation in just about any piece of correspondence from Accountants, Lawyers, or Tax Preparers. (more…)
It’s all part of the American dream – come up with a good idea, borrow some money from the bank, and live comfortably on the proceeds from your own business. And with the recent downturn causing many ill-managed businesses to fold, the opportunities are plentiful.
Unfortunately, funding is not that easy to come by anymore. The number of federally guaranteed loans to Orange County small businesses plunged 34% to 128 loans in the first quarter of 2011 after the higher guarantees for lenders and fee subsidies for borrowers ended Dec. 31 (more…)