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Chris Blach, QuickBooks ProAdvisor |
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Archive for May, 2010
The Post-Tax Blues: How to Accelerate Receivables with QuickBooks
Tuesday, May 18th, 2010
Household Employees and Withholding Taxes
Monday, May 17th, 2010|
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| If you employ someone to work for you around your house, it is important to consider the tax implications of this arrangement. While many people disregard the need to pay taxes on household employees, they do so at the risk of stiff tax penalties. As you will see, these rules are quite complex, even for such a relatively minor employee, and a mistake can bring on tax headaches. (more…) |
What are Your Chances of an IRS Audit?
Friday, May 14th, 2010|
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The IRS has issued its annual data book, which provides statistical data on its fiscal year 2009 activities, including how many tax returns it examines (audits), and what categories of returns it focuses its resources on.
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Cobra Subsidy has Been Extended Again to May 31
Friday, May 14th, 2010|
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| Workers who lose their jobs during April and May may qualify for a 65-percent subsidy on their COBRA health insurance premiums, according to the Internal Revenue Service. The American Recovery and Reinvestment Act established this subsidy to help workers who lost their jobs as a result of the recession maintain their employer sponsored health insurance.The Continuing Extension Act of 2010, enacted April 15, reinstated the COBRA subsidy, which had expired on March 31. As a result, workers who are involuntarily terminated from employment between Sept. 1, 2008 and May 31, 2010, may be eligible for a 65-percent subsidy of their COBRA premiums for a period of up to 15 months. In some cases, workers who had their hours reduced and later lose their jobs may also be eligible for the subsidy.
Employers must provide COBRA coverage to eligible individuals who pay 35 percent of the COBRA premium. Employers are reimbursed for the other 65 percent by claiming a credit for the subsidy on their payroll tax returns:
Employers must maintain supporting documentation for the claimed credit. There is much more information about the COBRA subsidy, including questions and answers for employers, and for employees or former employees, on the COBRA pages of IRS.gov. Some people who are eligible for the COBRA subsidy also qualify for the health coverage tax credit (HCTC) and may want to choose the more generous HCTC benefit, instead. The HCTC pays 80 percent of health insurance premiums for those who qualify. See more at HCTC: Eligibility Requirements and How to Receive the HCTC. |
Tax-Free Employer Health Coverage Now Available for Children Under Age 27
Friday, May 14th, 2010|
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| As a result of the recently enacted Affordable Care Act, health coverage provided for an employee’s children under 27 years of age is now generally tax-free to the employee, effective March 30, 2010.The Internal Revenue Service announced that these changes immediately allow employers with cafeteria plans –– plans that allow employees to choose from a menu of tax-free benefit options and cash or taxable benefits –– to permit employees to begin making pre-tax contributions to pay for this expanded benefit. (IRS Notice 2010-38 ) (more…) |
Financial Planning Tips for May 2010
Tuesday, May 4th, 2010|
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When to Review Your Life Insurance Coverage It makes good financial sense to periodically examine your life insurance coverage to make sure the coverage is still sufficient. After all, life insurance is often a family’s most important financial and estate planning tool. With today’s frequent changes in financial circumstances and goals, it’s a good idea to re-examine your life insurance coverage on the occurrence of any of the following:
A Slip of the Lip May Bring on a Tax Audit Many taxpayers have learned, to their dismay, that it generally isn’t wise to talk carelessly about their taxes – especially about sensitive areas. Why? Because the wrong person overheard their careless talk and “turned informer,” either for revenge or in the hope of an “informer’s reward.” An informer’s “tip” to the IRS will often trigger a tax audit. Even though the taxpayer has done nothing improper, he or she may have to suffer through the audit. Not only is this time-consuming, but it can also result in additional taxes due to the discovery of an innocent error on the return or the disallowance of a marginal deduction.
Check Your Credit Report Order a copy of your credit report from one of the major credit reporting agencies. Read the report carefully and report any discrepancies to the appropriate agencies. This not only ensures that the records are accurate, but also helps prevent others from obtaining credit in your name.
Review Budget vs. Actuals Compare April income and expenditures with your budget. Make adjustments as appropriate to your May expenditures. Make sure you have invested your planned savings amount for April.
Make Withholding Adjustments Based on the results of your prior year’s tax return, make any necessary adjustments to your tax withholding by completing Form W-4 and giving it to your employer.
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Looking for Status of Refund?
Tuesday, May 4th, 2010|
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You can go online to check the status of your 2009 refund 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after you mail a paper return. Be sure to have a copy of your 2009 tax return available because you will need to know your filing status, the first Social Security number shown on the return, and the exact whole-dollar amount of the refund. You have three options for checking on your refund:
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Haven’t Filed an Income Tax Return? What to Do
Tuesday, May 4th, 2010|
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Filing a past due return may not be as difficult as you think. Taxpayers should file all tax returns that are due, regardless of whether or not full payment can be made with the return. Depending on an individual’s circumstances, a taxpayer filing late may qualify for a payment plan. All payment plans require continued compliance with all filing and payment responsibilities after the plan is approved. It is important, however, to know that full payment of taxes saves you money. Here’s What to Do |
Federal Tax Due Dates For May 2010
Tuesday, May 4th, 2010|
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| May 10 | Employers – Social Security, Medicare, and withheld income tax. File Form 941 for the first quarter of 2010. This due date applies only if you deposited the tax for the quarter in full and on time.Employees – who work for tips. If you received $20 or more in tips during April, report them to your employer. You can use Form 4070 |
| May 17 | Employers – Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in April.Employers – Social security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in April. |
How to Select An Auditor for Your Employee Benefit Plan
Monday, May 3rd, 2010|
Daniel B. Weintraub, CPA, Partner |
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Choosing an auditor is one of the most important duties a plan administrator has. In addition to performing the required audit, the right auditor can provide advice on plan regulatory, operational and tax issues. Your auditor must be a licensed or certified public accountant and should have specialized training, both in the classroom and on the job. One of the most common reasons for deficient employee benefit plan audits is the failure of the auditor to perform tests in areas unique to employee benefit plan audits. A well trained and experienced plan auditor will be familiar with employee benefit plan practices and operations, as well as the specialized financial, regulatory, and auditing standards that apply to such plans. Among other things, a well crafted audit will address asset and participant account valuation, proper recording of plan obligations, participant eligibility, contributions including timely remittance, and propriety of plan benefit payments. A thorough audit will also entail a review of the plan’s internal controls, tax status, and compliance with certain ERISA guidelines. A well performed and documented audit is a key protection for your employee benefit plan, its participants and those charged with fiduciary responsibility for the plan. If you would like more information about employee benefit plan audits, please email or call me at 716-204-9000.
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