September 22, 2011 - had a few conversations about operating agreements this week. CLICK HERE for a good article the explains why its som important to have one. FYI this is not just important if youhave partners, but also for the single member LLC. Usually you use a lawyer to draft an agreement, but there are free templates and other low cost solutions as well.
September 13, 2011 - here's a question I get a lot - How do I deduct my home office expenses not that I file a corporate tax return.....CLICK HERE to find out. Any questions feel free to call or email.
June 22, 2011: ATTENTION SMALL BUSINESS OWNERS - CT tax laws are changing.
You must read these two items now.
The first link is a summary of the CT tax law changes. SALES TAX RATES are increasing to 6.35% effective 7/1/11. Certain services that were non-taxable are now taxable such as pet grroming and boarding, manicure services, spa services and more. Please read this.
Second - the department will be mailing to business owners a special assessment bill in August. You will be billed about $30 times the the average number of employees that you have had for the last year. Payment is due August 31, 2011.
CLICK HERE for the CT tax change summary.
CLICK HERE for the Special Assessment announcement.
FYI - if you don't own a small business it can't hurt to read about the CT tax law changes.
May 12, 2011: OK its been a while but tax season is done and I am back. Thought I would share this piece on the expected increases in tax rates in 2013. Let me know what you think - CLICK HERE for the article.
December 20, 2010: What a surprise - a new tax law was just passed. The good news is that because of this new law we will probably pay less in taxes next year. On the other hand this bill continues to increase our national deficit. At some point don't we have to learn to live within our means?
Anyway......if you CLICK HERE you will find a good article that is easy to read and gives a good overview of the new law. Most of this simply keeps things going the way they are now.
A few things jump out at me:
First the increased bonus depreciation on assets put in place from 9/8/10-12/31/11 jumping from 50% to 100% of the purchase price.
Second - the estate tax changes with estates and lifetime gifts under $5 million not being subject to estate or gift tax. I've attached another letter just on the estate tax changes for you to review....CLICK HERE to read this.
Third - 2% reduction in social security tax on wages and self-employment income puts more money in your pocket assuming you have wages or self-employment income.
Please let me know if you have any questions. Look for our organizer mailing in early January. Merry Christmas and Happy New Year!!
December 1, 2010: Here's a sneaky new tax that will hit high income taxpayers in 2013.
High income is defined as wages or self-employment income over $250k if single or $250k if married. If your income exceeds these amounts you will be subject to additional medicare taxes of .9% on your w-2 wages in excess of these amounts. Self employed individuals will pay a 3.8% tax on the excess.
But wait it gets better. There will also be a new 3.8% tax imposed on net investment income if your adjusted gross income is over $200k (single) or $250k (married). Net investment income includes interest, dividends, rental income and more. CLICK HERE for more details on this nasty new tax.
While this is several years away it's never too early to prepare and plan for this tax the will no doubt impact lots of people in Fairfield County CT. Give me a call if you have any questions or would like to discuss this further.
November 19, 2010: It's possible that this will not actually happen but it might. If it does happen here is the scoop......For those of you who own rental real estate.....Starting in 2011 you will need to issue 1099's to all vendors to whom you pay more than $600. These are due in January 2012. You need to account for your expenses and issue the 1099's accurately and on time. You will need to obtain the tax id number and address of these vendors. There are significant penalties for not doing this properly.
Here is an excerpt from an article I recently read:
But the new bill, the Small Business Jobs and Credit Act (H.R. 5297), extends the mandate to private individuals who own property from which they receive rental income. Those people would also now have to fill out paperwork reporting any expenditure they make on that property valued over $600 for the year.
Section 2101 of the bill accomplishes this by considering anyone receiving rental income as “engaged in a trade or business.”
The provision is a revenue-raising measure designed to offset other small business tax incentives and the Small Business Lending Fund Program created in the bill. It is expected to create about $2.5 billion in revenue, according to the Joint Committee on Taxation, the nonpartisan body that determines the budget effects of bills that Congress produces.
Ryan Ellis, tax policy director at the taxpayer advocate group Americans for Tax Reform (ATR), told CNSNews.com that about 10 million Americans are in for a rude awakening in just three months, when they have to begin tracking all of their expenditures related to a rental property.
“There’s 10 million people who don’t know that they’re now suddenly going to be required to do this,” Ellis said. “They don’t have to issue them until January 2012 because it’s a 2011 requirement, but they’ve got to start tracking in January (2011). So I hope their internal accounting is good.”
Writing for ATR, Ellis said, “So imagine that you're renting out your starter condo. You pay a property manager, a plumber, a repairman, a locksmith, a condo association, etc. Imagine having to get a taxpayer identification number, order 1099-MISCs from the IRS, fill them out by hand, keep a copy for yourself, send a copy to each payee (from whom you had to get a tax ID number and other information), and then finally take your legitimate rental deduction. Then the IRS finds some hiccup somewhere, and you get audited -- all to placate an insane Congress.”
This is a link to another good article on this change. http://www.journalofaccountancy.com/Web/20103537.htm
Please feel free to call us if you have questions or will need help complying with this new reporting requirement.
June 17, 2010: CLICK HERE for details of the payroll tax holiday provision of the recent HIRE act. If you hired someone after Feb. 3, 2010 (and before December 31, 2010) that worked 40 hours or less in the 60 day period prior to his/her hire date you may not have to pay social security taxes for this emplopyee for the rest of 2010. This summary will provide details about who is eligible for the payroll tax holiday.
If you have an eligible employee for the payroll tax holiday then have them fill out IRS form W-11. You can click here http://www.irs.gov/pub/irs-pdf/fw11.pdf to access this form.
