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Concept Construction Corporation:
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Archive for April, 2012
Client Spotlight: Concept Construction Corporation
Friday, April 20th, 2012Spring Cleaning: Tax Records You Can Throw Away
Thursday, April 19th, 2012|
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| Spring is a great time to clean out that growing mountain of financial papers and tax documents that clutters your home and office. Here’s what you need to keep and what you can throw out without fearing the wrath of the IRS.Let’s start with your “safety zone,” the IRS statute of limitations. This limits the number of years during which the IRS can audit your tax returns. Once that period has expired, the IRS is legally prohibited from even asking you questions about those returns.The concept behind it is that after a period of years, records are lost or misplaced and memory isn’t as accurate as we would hope. There’s a need for finality. Once the statute of limitations has expired, the IRS can’t go after you for additional taxes, but you can’t go after the IRS for additional refunds, either. (more…) |
10 Facts About Mortgage Debt Forgiveness
Wednesday, April 18th, 2012|
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| Canceled debt is normally taxable to you, but there are exceptions. One of those exceptions is available to homeowners whose mortgage debt is partly or entirely forgiven during tax years 2007 through 2012.Here are 10 things you should know about Mortgage Debt Forgiveness.
1. Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence. 2. The limit is $1 million for a married person filing a separate return. 3. You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure. 4. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence. 5. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion. 6. Proceeds of refinanced debt used for other purposes, to pay off credit card debt for example, do not qualify for the exclusion. 7. If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven. 8. Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax relief provision. In some cases, however, other tax relief provisions — such as insolvency — may be applicable. 9. If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed. 10. Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7. |
QuickBooks Portable Productivity: Invoices, Expenses, and More
Friday, April 13th, 2012|
Chris Blach, |
 Accounting in the cloud is closer than you might think. In fact, it’s here, in some cases. QuickBooks Online, of course, is entirely cloud-based, but it does not yet offer all of the features found in Intuit’s top-of-the-line products, Premier and Enterprise.In the meantime, Intuit itself, as well as third-party developers, have built online apps that fill in some of the gaps. These add-on solutions exist on websites, but they can collect data and synchronize it with desktop QuickBooks. So can that iPhone or Android that’s sitting on your desk right now. (more…) |
5 Tips for Taxpayers with Foreign Income
Monday, April 9th, 2012|
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| U.S. citizens and resident aliens, including those with dual citizenship who have lived or worked abroad during all or part of 2011, may have a U.S. tax liability and a filing requirement in 2012. Here are 5 tips for taxpayers with foreign income. 1. Filing deadline. U.S. citizens and resident aliens residing overseas or those serving in the military outside the U.S. on the regular due date of their tax return have until June 15, 2012 to file their federal income tax return. To use this automatic two-month extension beyond the regular April 17, 2012 deadline, taxpayers must attach a statement to their return explaining which of the two situations above qualifies them for the extension. 2. World-wide income Federal. Law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. 3. Tax forms. In most cases, affected taxpayers need to fill out and attach Schedule B, Interest and Ordinary Dividends, to their tax return. Certain taxpayers may also have to fill out and attach to their tax return the new Form 8938, Statement of Foreign Financial Assets. Some taxpayers may also have to file Form TD F 90-22.1 with the Treasury Department by June 30, 2012. 4. Foreign earned income exclusion. Many Americans who live and work abroad qualify for the foreign earned income exclusion. If you qualify for tax year 2011, this exclusion enables you to exempt up to $92,900 of wages and other foreign earned income from U.S. tax. 5. Credits and deductions. You may be able to take either a credit or a deduction for income taxes paid to a foreign country or a U.S. possession. This benefit is designed to lessen the tax burden that results when both the U.S. and another country tax income from that country. If you had foreign income last year, let us know. We’ll help you figure out whether you have any tax liability and if you do, which forms you need to file and when. |
Six Facts about the Alternative Minimum Tax
Sunday, April 8th, 2012|
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| The Alternative Minimum Tax attempts to ensure that anyone who benefits from certain tax advantages pays at least a minimum amount of tax. The AMT provides an alternative set of rules for calculating your income tax. In general, these rules should determine the minimum amount of tax that someone with your income should be required to pay. If your regular tax falls below this minimum, you have to make up the difference by paying alternative minimum tax.
Here are six facts you should know about the AMT and changes for tax year 2011.
If you need information about the AMT and your tax situation, please let us know. |
Haven’t Filed Your Taxes Yet? Don’t Panic
Saturday, April 7th, 2012|
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We are into April already. Are your taxes done? If not, here’s some last-minute tax advice for you:
Don’t Procrastinate AnymoreDon’t Panic If You Can’t PayRequest an Extension of Time to File – But Pay on Time |
Claiming the Small Business Health Care Tax Credit
Friday, April 6th, 2012|
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If you’re a small business owner with fewer than 25 full-time equivalent employees you may be eligible for the small business health care credit that went into effect in 2010. What is the Small Business Health Care Credit?The small business health care tax credit, part of the Affordable Care Act enacted in 2010, is specifically targeted to help small businesses and tax-exempt organizations provide health insurance for their employees. Small employers that pay at least half of the premiums for employee health insurance coverage under a qualifying arrangement may be eligible for this credit. How Does the Credit Save Me Money?For tax years 2010 through 2013, the maximum credit is 35 percent for small business employers and 25 percent for small tax-exempt employers such as charities. An enhanced version of the credit will be effective beginning Jan. 1, 2014 and the rate will increase to 50 percent and 35 percent, respectively. The amount of the credit you receive works on a sliding scale, so the smaller the business or charity, the bigger the credit. Simply put, if you have more than 10 FTEs or if the average wage is more than $25,000, the amount of the credit you receive will be less. If you pay $50,000 a year toward workers’ health care premiums–and you qualify for a 15 percent credit–you’ll save $7,500. If you save $7,500 a year from tax year 2010 through 2013, that’s a total savings of $30,000. And, if in 2014 you qualify for a slightly larger credit, say 20 percent, your savings go from $7,500 a year to $12,000 a year. Is My Business Eligible for the Credit?To be eligible for the credit, you must cover at least 50 percent of the cost of single (not family) health care coverage for each of your employees. You must also have fewer than 25 full-time equivalent employees (FTEs) and those employees must have average wages of less than $50,000 a year. Let’s take a closer look at what this means. A full-time equivalent employee is defined as either one full-time employee or two half-time employees. In other words, two half-time workers count as one full-timer or one full-time equivalent. Here is another example: 20 half-time employees are equivalent to 10 full-time workers. That makes the number of FTEs 10 not 20. Now let’s talk about average wages. Say you pay total wages of $200,000 and have 10 FTEs. To figure average wages you divide $200,000 by 10–the number of FTEs–and the result is your average wage. In this example, the average wage would be $20,000. Can Tax-Exempt Employers Claim the Credit?Yes. The credit is refundable for small tax-exempt employers too, so even if you have no taxable income, you may be eligible to receive the credit as a refund as long as it does not exceed your income tax withholding and Medicare tax liability. Can I Still Claim the Credit Even If I Don’t Owe Any Tax This Year?If you are a small business employer who did not owe tax during the year, you can carry the credit back or forward to other tax years. Also, since the amount of the health insurance premium payments are more than the total credit, eligible small businesses can still claim a business expense deduction for the premiums in excess of the credit. That’s both a credit and a deduction for employee premium payments. Can I File an Amended Return and Claim the Credit for Previous Tax Years?If you can benefit from the credit this year but forgot to claim it on your tax return there’s still time to file an amended return. Businesses that have already filed and later find that they qualified in 2010 or 2011 can still claim the credit by filing an amended return for one or both years. Give us a call if you have any questions about the small business health care credit. And, if you need more time to determine eligibility this year we’ll help you file an automatic tax-filing extension. |
Financial Tips for April 2012
Thursday, April 5th, 2012|
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| Review Your Retirement Plans How much have you accumulated so far? How much do you need to retire comfortably at the desired date? Professional advice may be helpful in determining how much you should be saving and what the best investment vehicles are.Inventory Your Non-Financial Assets Perform an inventory of your non-financial assets (e.g., home, furniture, cars, personal belongings). Compare this inventory to your property insurance coverage. Is your insurance adequate for your assets? You may need a rider to your policy for certain items such as jewelry. If some assets are no longer in use, consider selling them or donating them to charity. You may be entitled to a deduction based upon the fair market value of the assets. Review Budget vs Actuals Schedule Estimated Tax Payments Review Retirement Contributions |
Federal Tax Due Dates for April 2012
Thursday, April 5th, 2012|
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