December
Major Tax Deadlines
Keep up to date with important tax deadlines
What's New in Taxes
Homebuyer's credit extended
Under
prior law, an eligible first-time homebuyer could claim a maximum
credit of $8,000 for a principal residence purchased before December 1,
2009. The credit began to phase out for single filers with a modified
adjusted gross income (MAGI) above $75,000 and joint filers above
$150,000.
New rules in 2010 open Roth IRA conversions to everyone
Beginning in 2010, the rules governing Roth IRA conversions will undergo a significant change.
New Business
NOL carryback extended by recent law
Normally,
a business can carry back a net operating loss (NOL) for only two years
before carrying it forward for up to 20 years. A prior law change
allowed a carryback for three, four, or five years to qualified small
businesses for NOLs in tax years beginning or ending in 2008.
Wages or dividends? An important tax question for shareholder-employee
S
corporations are the most popular form of corporate business structure.
There are excellent tax planning benefits uniquely available to S
corporation shareholders who are also employees, not the least of which
is the opportunity to manage self-employment and payroll tax
liabilities.
Smart Business
Try a different gift idea this year
Are you searching for gift ideas for the holiday season? It's never
easy, especially for older children and teenagers. They're too old for
toys, but do they really need another sweater or computer game?
Develop three habits to stay out of debt
Staying
out of debt is simple, but it's not easy. It requires fortitude. It
means foregoing impulsive purchases in exchange for long-term financial
freedom. Staying out of debt requires that you deny cravings, at least
temporarily, for the "must-have" stuff that beckons from every mall,
television advertisement, and magazine.
November
Major Tax Deadlines
Keep up to date with important tax deadlines
What's New in Taxes
Little change for 2010 tax numbers
There
was minimal inflation in 2009; therefore, tax numbers that are annually
adjusted for inflation will see little or no change for 2010. The IRS
has released the 2010 numbers for the more than three dozen tax breaks
that are subject to annual inflation adjustments.
Year-end tax reminders
The clock is ticking on tax moves you might benefit from if you act before December 31. Here are some year-end reminders.
New Business
Time's running out for 2009 business tax planning
Although it's getting late in the year, small business owners still have time to reduce their 2009 tax bill.
Take time to do a "banker" review
Have
you taken a look at your company's banking relationship lately? Chances
are you opened an account at a local branch when you started the
business and haven't changed since. But your business and its banking
needs have almost certainly changed.
Smart Business
Three important IRA reminders
As you do your tax and financial planning over the next several months, keep these current and future IRA rules in mind:
Start an IRA for your working child
Most
children are not into saving for the future. But the current tax and
investment benefits are worth considering. A few dollars invested at an
early age can return large sums at retirement time.
October
Major Tax Deadlines
Keep up to date with important tax deadlines
What's New in Taxes
A new vehicle could bring tax savings
If
you're thinking of buying a new car, truck, motorcycle, or motor home
this year, you might benefit from a tax break included in the "Recovery
Act of 2009." Here are the details.
Mortgage debt relief: Answers to frequently asked questions
To
compound the financial woes resulting from a foreclosure or other
mortgage restructuring for your home, the IRS generally imposes tax
when debt is cancelled. In other words, you're taxed on the amount
forgiven by the lender as if you actually received it as income.
However, Congress provided some relief to homeowners under the
"Mortgage Forgiveness Debt Relief Act of 2007."
New Business
Our workforce is changing
Things are changing on the job front. Here are a few workforce numbers reported recently.
Six questions to ask before starting a business
Throughout
America, in rural towns and large cities, companies come and go with
clockwork frequency. That specialty store with the ragged sign and
lousy service? It's been replaced by a funky restaurant that serves
great linguini. Yesterday's bicycle shop is today's bakery. It's no
wonder. Creating a company that can survive even a few years is not an
easy feat.
Smart Business
Income levels down in 2008 and not much improvement expected in 2009
The Census Bureau's annual report on income and poverty provides a snapshot of the state of the U.S. economy.
Credit card fraud: Will you be the next victim?
Credit card fraud has been around since the advent of credit cards, but the thieves have advanced with technology.
September
Major Tax Deadlines
Keep up to date with important tax deadlines
What's New in Taxes
The IRS reminds taxpayers to use new tax breaks
The
IRS has issued a news release reminding taxpayers to take advantage of
the tax breaks provided in the "American Recovery and Reinvestment Act
of 2009," the recovery law passed earlier this year.
Do a year-end investment review to cut taxes and increase returns
This
is a good time of year to review and rebalance your investment
portfolio. Although the recent market volatility has been disastrous
for many investors, there may still be some year-end moves you can make
that will cut your 2009 taxes and increase your after-tax returns. As
you identify investments to buy and sell, keep the following tax
implications in mind:
New Business
IRS urges small businesses to use tax breaks
The
"American Recovery and Reinvestment Act," the economic stimulus law
passed earlier this year, included a number of tax-saving opportunities
for businesses. Because some of these tax breaks are available for a
short time only, the IRS is urging small businesses to act now to
benefit from the provisions.
Is your business prepared for flu season?
The
government is encouraging businesses to look ahead to the upcoming fall
and winter flu season and to make plans to minimize the flu's effects
on business productivity. Flu season may be worse this year due to the
H1N1 or swine flu which still has not been effectively brought under
control.
Smart Business
New credit card rules become effective
The
new "Credit Card Accountability, Responsibility and Disclosure Act of
2009" (CARD), which is designed to protect consumers from unfair credit
practices, generally does not take effect until February 2010. But a
few provisions went into effect on August 20, 2009.
As things change, update your beneficiaries
Although
life's only certainties may be death and taxes, we rarely enjoy
planning for them. But without planning, your assets can go to
unintended recipients - including the government.
August
Major Tax Deadlines
Keep up to date with important tax deadlines
What's New in Taxes
An update on tax collections
The
economy hasn't been doing well, and when the economy slumps, so do tax
collections. The American Institute for Economic Research reported a
34% drop in federal taxes collected in April 2009 compared with April
2008. For the 12 months ended in April 2009, tax revenue dropped 44%
compared to a year earlier.
Put midyear tax planning on your summer agenda
Summer's
here, and probably the last thing on your mind is tax planning. The
problem is that if you wait until December, there's little time for
changes to take effect. But if you take the time to plan now, you still
have six months for your actions to make a difference on your 2009 tax
return. With the recent tax changes, planning for the reduction of your
2009 taxes is more important than ever. Here are some suggestions to
get you started.
New Business
IRS defines new groups for work credit
The
work opportunity tax credit is available to businesses that hire
workers from certain disadvantaged target groups. The credit is based
on the first-year wages paid to qualifying employees.
Consider incremental cost in business purchasing
If you run a business, you probably make many different kinds of
purchasing decisions. You might buy some items infrequently and only
one at a time (for example, computers). At the other extreme, there are
probably some items that you buy regularly and in relatively large
quantities. For a print shop, paper might be your highest volume
purchase. For a manufacturing business, it might be plastic or steel.
Smart Business
Social security and Medicare to go broke earlier than expected
The federal government estimates that Medicare and social security will
run out of money even sooner than previously predicted. According to
these latest estimates, Medicare will be depleted in 2017, and the
social security trust fund will run out in 2037
Consider direct education gifts - There's no limit and no taxes
There are many ways to pay for a child's education, but one of the
methods that you might not be aware of is that of direct education
gifts.
July
Major Tax Deadlines
Keep up to date with important tax deadlines
What's New in Taxes
Changes affect 529 plans
Two
changes could affect your 529 college plan. First, during 2009 and
2010, you can use 529 funds for tax-free purchases of computers,
peripherals such as printers, certain educational software, and
Internet access.
Follow the road to savings with tax credits
A
tax deduction should never be overlooked, but it's a tax credit that
can make a big difference in your tax bill. While a deduction will
reduce your tax liability, it will only reduce it by your marginal tax
rate. For example, if you're in the 25% bracket, a $1,000 deduction
will save you $250 in taxes. But a credit is a dollar for dollar
reduction of your tax liability.
New Business
Final increase in federal minimum wage this month
July
24, 2009, brings the third and final increase in the federal minimum
wage mandated by the "Small Business and Work Opportunity Act of
2007." That law was signed by George W. Bush on May 25, 2007.
New COBRA health subsidy: What employers and employees need to know
Job
loss brings many challenges to families, and that often includes
obtaining affordable health insurance coverage. Under a 1985 federal
law referred to as "COBRA," many employees who are discharged can keep
health insurance coverage provided by their former employer for as many
as 18 months. But to do so, the employee has to pay 100% of the COBRA
premiums.
Smart Business
Factor graduation rates into choice of college
As
college costs seem to increase every year, you might want to look at
graduation rates for the colleges being considered by your
family. After all, six years of college will certainly cost more
than four.
How to raise financially literate children
If
everything your children ever learned about personal finances came from
the mass media, they might think credit is a limitless resource and
savings something you only find on a clearance rack. To fill in the
gaps in their financial education, parents should teach their children
the fundamentals of handling money. But where do you start? Perhaps
begin with the following benchmarks of financial literacy.
June
Major Tax Deadlines
Keep up to date with important tax deadlines
What's New in Taxes
School's out! That means moving time for millions
Millions
of people move each year, often during the summer months when children
are out of school. If you're considering a move this summer, be aware
that moving can have some important tax consequences.
Energy-saving home improvements could cut your 2009 taxes
President
Obama signed the "American Recovery and Reinvestment Act of 2009" into
law on February 17, 2009. Among the various provisions in the law are
new energy tax credits that can really add up to savings for the
homeowner.
New Business
2009 vehicle deductions
Each
year the IRS publishes depreciation limits for business vehicles first
placed in service that year. Because 50% bonus depreciation is allowed
only for new vehicles, these limits are different for new and used
vehicles.
New rules for NOLs
Essentially, a net operating loss or NOL is generated when a business has more deductions than income.
Smart Business
"Do Not Call" doesn't prevent scammers
Registering
with the National Do Not Call Registry is supposed to keep you from
getting all those annoying mass marketing phone solicitations.
How to deal with finances after a spouse's death
The
death of a spouse can leave the survivor with a bewildering array of
financial problems. In many families, one partner handles all the
financial matters. If that partner passes away first, without having
discussed and documented the couple's financial affairs, the survivor
may face a steep learning curve or make poor financial decisions out of
ignorance.
May
Major Tax Deadlines
Keep up to date with important tax deadlines
What's New in Taxes
IRS gives up on private debt collection
The
use of private debt collection agencies to collect overdue taxes was
started in 2006. Some in Congress have agitated for an end to the
program from its very beginning. Now, after an extensive review
of the cost-effectiveness of the program, the IRS announced that it
will not renew contracts with the private agencies.
How long should you keep tax records?
After
filing your 2008 tax return, you may be wondering how long to keep your
tax records. Unless fraud, evasion, or a substantial understatement of
income is involved, the IRS generally has only three years in which to
question your return. If the IRS asks, you must be able to prove the
validity of your tax return, which includes providing the underlying
supporting data. How long you keep your paperwork depends directly on
the statute of limitations, but here are some guidelines.
New Business
Government jobs pay more than private sector jobs
Even as the economy struggles, workers in government jobs are enjoying an increase in pay and benefits.
How does your company measure up?
No
matter how successful your business has been in the past, you can
probably do better. And if you've been struggling to keep your head
above water, there's certainly room for improvement. So how can you
gain ground on the competition?
Smart Business
Credit card companies trim rewards
The
economic downturn has claimed another casualty: the rewards
programs offered by credit card companies. Used to encourage
credit card holders to charge purchases, these programs offered cash
rebates, airline tickets, and other freebies for each dollar charged.
Put your tax refund to good use
Did you recently receive an income tax refund? Here are some suggestions for making the most of it.
APRIL
Major Tax Deadlines
Keep up to date with important tax deadlines
What's New in Taxes
IRS expands 2009 homebuyer credit
The
IRS announced recently that taxpayers who qualify for the first-time
homebuyer tax credit on a home purchased from January 1, 2009, through
November 30, 2009, may claim the credit on either their 2008 income tax
return due April 15, 2009, or on their 2009 tax returns due April 15,
2010.
Use the "saver's credit" to cut your tax bill
Would
you like to shave $1,000 off your income tax bill? Would your spouse
like to join in the tax savings of up to $2,000 on a joint return? This
potential savings comes in the form of a tax credit called the
"retirement savings contributions credit" or "saver's credit." Unlike a
tax deduction, a tax credit is a dollar for dollar reduction of the
taxes you owe.
New Business
Big business expresses views on health care reform
According
to a recent survey of 489 U.S. employers, big companies do not favor
many of the proposals now being offered for reforming the country's
health care system. Nearly 88% of those surveyed opposed the idea of
replacing the tax exclusion for employer-paid health insurance premiums
with refundable health care tax credits for employees.
Are you a fireman or a business manager?
In
your business are you constantly putting out fires caused by cash
shortages? How well you manage your cash flow affects your business's
profitability and longevity. Here are a few "fire prevention"
suggestions.
Smart Business
Federal Reserve releases financial statistics
A
report from the Federal Reserve states that Americans lost a record
17.9% of their net worth in 2008. U.S. "net worth" is a measure of
households' assets minus liabilities. The 2008 net worth was $51.5
trillion in 2008, the lowest since 2003. In just the fourth quarter of
2008, net worth dropped 9%, the largest quarterly decline recorded
since 1951.
Some tips for the twenty-something generation
Young
people generally feel pretty good about life, but in today's troubled
economic environment, they may wonder if they're making the right
financial moves. Here are some simple (yet effective) financial
strategies for people in their early twenties.
March
Major Tax Deadlines
Keep up to date with important tax deadlines
What's New in Taxes
Tax breaks are included in the new Recovery Act
The
American Recovery and Reinvestment Act of 2009 includes a bevy of new
tax breaks. The key provisions summarized below are generally
retroactive to January 1, 2009.
Itemizing deductions: Three facts you should know
You
know the general rule about itemized deductions: Compare your total
allowable expenses against your standard deduction, and use the amount
that provides the greatest tax benefit.
New Business
New law has tax breaks for businesses
The
American Recovery and Reinvestment Act of 2009 contains a number of
provisions that will affect businesses. Here's a brief overview.
Has your business considered the benefits of going green?
We
see, hear, and read every day that the world is becoming more
environmentally conscious and taking steps to "go green." While many of
these may be out of reach for smaller businesses, there are several
things that even small businesses can do to head toward going green.
Smart Business
Home foreclosures may be slowing
Statistics
on home foreclosures for January 2009 showed a 10% decrease from
December 2008 foreclosures. Though the January rate is still up
18% from a year ago, the decline from December may be an indication
that moratoriums and mortgage modifications may be having an effect.
Put your financial house in order
With
another new year underway, now is a great time to assess your household
finances, make any needed changes, and prepare for new opportunities.
To help you get started, here are a few suggestions.
February
Major Tax Deadlines
Keep up to date with important tax deadlines
What's New in Taxes
2008 tax rebates still available for some
The
Stimulus Act of 2008 provided qualifying taxpayers with rebate checks
last year. People who did not receive the maximum allowed or
whose circumstances have changed since last year may be eligible for
the 2009 version of the rebate - a "recovery rebate credit."
Basis reporting will be required soon
In
just a few short years, brokers will be required to report basis
information to the IRS for stocks, bonds, and other financial
instruments.
New Business
Health care to cost more in 2009
Both employers and employees can expect higher health care costs in 2009.
How to compete against a larger rival
When
Starbucks or Walmart or Home Depot comes to town, how can a small
business successfully compete? That's a tough question, one that's been
the subject of numerous magazine articles, Internet blogs, and doctoral
theses.
Smart Business
Tax strategies for IRA losses
Trillions of dollars disappeared from taxpayers' retirement accounts in
the closing months of 2008, thanks to the crisis in the financial
markets. If your IRA lost value, you might have a tax opportunity to
consider.
Have you done an insurance checkup lately?
When
was the last time you reviewed your insurance coverage? An annual
insurance review makes good financial sense. Here are points to
consider as you review your various insurance policies.
Janaury
Major Tax Deadlines
Keep up to date with important tax deadlines
What's New in Taxes
IRS releases inflation-adjusted tax numbers for 2009
The IRS adjusts many tax numbers for inflation each year. Other numbers change as a result of tax law revision.
In your tax planning for 2009, take the following changes into account:
Control health costs and taxes with a Health Savings Account
Health Savings Accounts (HSAs) have been slow to catch on with the public, but Congress is doing its part to champion
their cause. It has tinkered with the law in recent years to make HSAs more appealing. In fact, you now have a
once-in-a-lifetime opportunity — literally — to transfer funds tax-free to an HSA.
New Business
Some businesses cut matching program
As businesses look for ways to cut costs in the current economic slump, some are conserving cash by eliminating
the company's matching contributions to workers' 401(k) accounts. These employer matches have been a popular employee
benefit, with the employer typically contributing 50% of employees' contributions on up to 6% of their annual pay.
Think through the succession puzzle for business survival
Succession planning is very important for a family owned business. Before you sit down with your tax and legal
advisors to draw up a succession plan, you should think through three key issues: who do you want to succeed you,
when do you want the transition to take place, and how do you want to structure the transition?
.Smart Business
Good news for retirees
Retirees saw trillions of dollars disappear from their retirement accounts in the closing months of 2008, thanks
to the crisis in the financial markets. Some relief for those 70-1/2 and older was included in a year-end law passed
by Congress on December 11, 2008.
The IRA charity option is back again
Remember the 2007 tax rule that allowed individuals 70-1/2 or older the option of contributing up to $100,000 directly
from an IRA to a qualified charity in 2007 without having to treat the IRA distribution as taxable income?
