• The newly enacted tax cut creates a new 2011 and 2012 estate tax. The new rules are taxpayer friendly in two respects. First, they are easy to understand. Second, they contain$5 million exclusion (portable, if properly elected, for husband and wife, giving a married couple an exclusion of $10 million).
• Tax law gives choices to the executors who are handling the estates of those who died in 2010. Choice one is to apply the 2010 rules. Choice two is to apply the newly enacted 2011 and 2012 estate tax rules.
• Tax law creates trouble for selected fringe benefits that the S corporation gives to a more than 2 percent shareholder. The loss of benefits and accompanying complications are factors to consider in the selection of the S corporation as your choice of business entity.
• As a business owner, you should have your health insurance in a tax-advantaged position. If it is not possible or practical to utilize the Section 105 medical reimbursement plan, consider the health savings account.
• Here is the big picture on how the health savings account (HSA) works for the proprietor, S corporation owner, and C corporation owner. The good news is threefold: (1) the tax deduction for the high-deductible insurance, (2) the tax deduction for the HSA investment account, and (3) the tax-deferral and tax-free use of the HSA investment account.
• You need time and rate of investment return on your side to make your HSA investment grow to your satisfaction. One consideration for a higher rate of return is a self-directed HSA that allows you to invest in individual stocks, real estate, and mortgages.
• You need to strategize your purchase of high-deductible insurance to maximize your HSA tax-favored investment portfolio.
• The health savings account (HSA) offers the opportunity to save on insurance costs and create an investment nest egg. To learn how the HSA could work for you, do some easy arithmetic, like we show you in this article.
Monday, February 28, 2011
Wednesday, February 23, 2011
Taxpayers, beware: IRS warnes of new taxpayer penalities
The IRS has recently warned that it is stepping up its efforts aimed at taxpayer audits. High net worth taxpayers, small business taxpayers, rental property owners, a among a large group of taxpayers that may now face new IRS audits.
In addition the IRS is warning of new penalties and fines for taxpayers if they fail to follow the tax rules. Reporting items without records, or failing to report income, or making up deductions are just a few of the growing list of issues that new examinations will be looking for.
Tax Issues:
Follow Up Action Print out this ALERT and provide to
Inform all clients that is an important issue and to review their
requirements under the new taxpayer penalty issues.
Tax Professionals may face penalties for preparing returns where there are no formal books and records. Clients may be required to reconstruct their books and records before they can file a return.
Compare differences in prior year tax returns with current year return:
Review bank records against gross receipts for differences
Review any large dollar transactions
Look for comingling in corporate books and records
Review any independent contractor expense (AUDIT ISSUE)
Advise all clients of potential higher audit risk this year
– TAXPAYER ADVISORY BULLETIN
This year should see in some cases, an estimated 200% increase in number of IRS audits and examinations. Taxpayers should be advised of following:
In addition the IRS is warning of new penalties and fines for taxpayers if they fail to follow the tax rules. Reporting items without records, or failing to report income, or making up deductions are just a few of the growing list of issues that new examinations will be looking for.
Tax Issues:
Follow Up Action Print out this ALERT and provide to
Inform all clients that is an important issue and to review their
requirements under the new taxpayer penalty issues.
Tax Professionals may face penalties for preparing returns where there are no formal books and records. Clients may be required to reconstruct their books and records before they can file a return.
Compare differences in prior year tax returns with current year return:
Review bank records against gross receipts for differences
Review any large dollar transactions
Look for comingling in corporate books and records
Review any independent contractor expense (AUDIT ISSUE)
Advise all clients of potential higher audit risk this year
– TAXPAYER ADVISORY BULLETIN
This year should see in some cases, an estimated 200% increase in number of IRS audits and examinations. Taxpayers should be advised of following:
- Review records and receipts
- Review bank records for unreported income
- Review receipts for deductions claimed
- Keep all records for possible audit
- Do not make up numbers for your return
- Make sure to compare information to return
- Maintain good records for business or rentals
Monday, February 14, 2011
How to find tax services in the South Bay
It's that time of year again. That time of year when your W-2 and 1099 statements start showing up in the mail. That time of year when you have to start looking for tax services in Torrance and South Bay to help you maximize your tax return.
Finding a Torrance tax account that provides tax preparation services in South Bay can seem like a difficult ordeal with the plethora of possible service providers to choose from, but it's really a very straight forward process based on what you are trying to accomplish.
The first thing you need to do is ask yourself why you are looking tax preparation services in South Bay. The most common reasons people pay for tax services in South Bay is because:
The next step to finding a tax services in South Bay is to shop around for prices and then assess what's affordable for you based on professional liscenses. By following these simple steps, you'll be able to find affordable tax services in South Bay.
Finding a Torrance tax account that provides tax preparation services in South Bay can seem like a difficult ordeal with the plethora of possible service providers to choose from, but it's really a very straight forward process based on what you are trying to accomplish.
The first thing you need to do is ask yourself why you are looking tax preparation services in South Bay. The most common reasons people pay for tax services in South Bay is because:
- They want to file their taxes quickly with the help of professionals.
- They want help taking advantage of tax credits and deductions to maximize their tax return.
- They need help managing complicated tax situations such as separating business taxes from personal taxes when working as a sole proprietor.
The next step to finding a tax services in South Bay is to shop around for prices and then assess what's affordable for you based on professional liscenses. By following these simple steps, you'll be able to find affordable tax services in South Bay.
Thursday, February 10, 2011
Do you know when your 2011 taxes are due?
If you're like most taxpayers, the only date that comes to mind when you're thinking about Torrance tax preparation services is the April 15th date. But there are many other dates you should be aware of in addition to this date, especially if you are a business owner who files and pays taxes.
Each tax year is divided by quarters. The first quarter of a calendar year consists of January, February and March. The second quarter of calendar year consists of April, May and June. The third quarter of a calendar year consists of July, August and September. And the fourth quarter of a calendar year consists of October, November and December. If you use a fiscal year instead of a calendar year, then the three months that make a quarter may be slightly different from you depending where you're fiscal year begins.
Aside from the quarterly break down of any given tax year, here are some important dates to keep in mind as you gather your tax documents and seek out a tax accountant to help you file your taxes:
2011 Tax Calendar for Tax Preparation
January 15 - If you make quarterly tax payments, then your fourth quarterly tax payment is due from the previous year.
January 31 - This is the day you can expect to receive your 1099 and/or W-2 statements and other relevant tax documents.
February 28 - This is when paper 1099 statements are due to the IRS and paper W-2 statements are due to the Social Security Administration.
March 31 - This is when electronic 1099 statements are due to the IRS and electronic W-2 statements are due to the SSA.
April 15 - This is the infamous tax date that everyone knows as this is the day that your taxes are due if you are a calendar year tax payer, which most people are unless they are running a business. If you make quarterly tax payments, this is also when your first tax payment for the current tax year is due.
June 15 - If you are make quarterly tax payments, this is when your second quarterly tax payment is due for the year.
September 15 - If you make quarterly tax payments, this is when your third quarterly tax payment is due for the year.
October 15 - For individual tax payers who were not able to file their tax returns by April 15th and received and extension, extended tax returns are due on this day.
If a due date happens to fall on a weekend of legally recognized holiday, then the due date is moved to the following business day that is not a weekend or legal holiday.
There are several other important dates to note, but that's for business owners. For now, we'll keep it simple with the basics of individual tax returns.
For questions about your taxes, call Mike at 310-894-9244 or you can email him.
Each tax year is divided by quarters. The first quarter of a calendar year consists of January, February and March. The second quarter of calendar year consists of April, May and June. The third quarter of a calendar year consists of July, August and September. And the fourth quarter of a calendar year consists of October, November and December. If you use a fiscal year instead of a calendar year, then the three months that make a quarter may be slightly different from you depending where you're fiscal year begins.
Aside from the quarterly break down of any given tax year, here are some important dates to keep in mind as you gather your tax documents and seek out a tax accountant to help you file your taxes:
2011 Tax Calendar for Tax Preparation
January 15 - If you make quarterly tax payments, then your fourth quarterly tax payment is due from the previous year.
January 31 - This is the day you can expect to receive your 1099 and/or W-2 statements and other relevant tax documents.
February 28 - This is when paper 1099 statements are due to the IRS and paper W-2 statements are due to the Social Security Administration.
March 31 - This is when electronic 1099 statements are due to the IRS and electronic W-2 statements are due to the SSA.
April 15 - This is the infamous tax date that everyone knows as this is the day that your taxes are due if you are a calendar year tax payer, which most people are unless they are running a business. If you make quarterly tax payments, this is also when your first tax payment for the current tax year is due.
June 15 - If you are make quarterly tax payments, this is when your second quarterly tax payment is due for the year.
September 15 - If you make quarterly tax payments, this is when your third quarterly tax payment is due for the year.
October 15 - For individual tax payers who were not able to file their tax returns by April 15th and received and extension, extended tax returns are due on this day.
If a due date happens to fall on a weekend of legally recognized holiday, then the due date is moved to the following business day that is not a weekend or legal holiday.
There are several other important dates to note, but that's for business owners. For now, we'll keep it simple with the basics of individual tax returns.
For questions about your taxes, call Mike at 310-894-9244 or you can email him.
Thursday, February 3, 2011
Benefits of tax preparation services in Torrance
Filing your taxes doesn't have to be a pain anymore when you use tax preparation services. Some of the benefits of working with a tax accountant in Torrance, such as WK Accounting and Tax Services include:
- Local, convenient location
- Efficient, effective and stress free accounting and tax preparation services
- More than 15 years of professional experience with accounting, bookkeeping and payroll services
- Your first line of financial defense
- Quality service for the first time and every time!
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