Tax News: Extra $$ In your paycheck now may hurt later
The Obama stimulus package passed earlier this year reduced the withholding from employees checks starting in April. This reduction was intended to work out to be about $800 (the amount of the stimulus) over the balance of the year. This works great for the married couple with only one wage earner in the household. But if you have two incomes, each will receive an extra $800 in their paychecks during the year, possibly resulting in under-withholding and a decrease in your expected refund (or even a balance due). If you are concerned that you are not having sufficient money withheld for federal or state taxes, ask your employer to withhold more for both federal and state. You can also call our office and set up a time to have a W4 calculation done. There is a fee of $50 for this calculation.
Estimated Tax Payments Reduced For Qualified Taxpayers
The American Recovery and Reinvestment Act of 2009 (ARRA) reduced the estimated tax payment requirements for certain qualified individuals. For 2009, the required annual payment is the lesser of 90 percent of the tax shown on the return for 2009 or 90 percent of the tax shown on the return for the preceding year.
Under this rule, a qualified individual is defined as anyone whose adjusted gross income for the preceding year is less than $500,000 and who certifies that more than 50 perent of the gross income shown on the return for the preceding year was income from a small business. A small business for this purpose is one that employs fewer than 500 employees.
Last Day to File Your 2008 Taxes Is Rapidly Approaching
October 15th is the final filing deadline for 2008 personal tax returns. All returns not filed by that date will be subject to late filing penalties. Each of our clients whose 2008 return is incomplete because of missing information will be receiving an e-mail listing the items we need to complete the return. Once you have all of the needed information, please call or email us to schedule an appointment to complete your return.
First Time Homebuyers Credit Fraud
The IRS announced its first successful prosecution related to fraud involving the first-time homebuyers credit. To date, the IRS has 24 open cases under investigation regarding fraud related to the credit. This is another example of the increasing IRS compliance and enforcement effort.
Important Dates
- Aug 11
Seminar: Corporation, S-Corp or LLC: which entity structure is best for you?
- Aug 15
Last day to file Non-profit 2008 tax return
- Sept 7
Accountability office closed for Labor Day
- Sept 15
- Last day to file corporation and partnership 2008 tax returns
- 3rd Qtr Estimated Tax Payment Due
- Seminar: Compliance and accounting for LLC's corporations, S-corps and partnerships
- Oct 15
Last day to file 2008 personal tax return
Accountability News: Karen's a grandma (again)!
July was a sad month and a happy month for us. My sister-in-law went to be with the Lord on July 7 after a year-long battle with cancer. Thank you for all the prayers and support given us during this time. Then on July 18th, our daughter delivered her third child — a handsome little boy, Nathan Cash Rodriguez. He was 6lb 8oz, 19.5 inches long. His older brother Aiden (4) and sister Paisley (2) were happy because they were going to Disneyland with Grandpa and Grandma after their baby was born.
Tax Seminars: Knowledge Is Power
Accountability hosted the second in our series of our tax education seminars last month. We had another full house for our discussion of tax issues related to owning rental property. We would like to thank Eurydice Turk for sharing her experience as both a realtor and a landlord. We all came away with a clearer understanding of both the current rental real estate market and the reality of owning rental property. Thanks again Eurydice!
Based on the level of interest for this seminar and the prior session discussing self-employment, we are considering a second presentation on both of these topics. If you or someone you know would be interested in attending, e-mail us, indicating which seminar(s) you are interested in and how many will be attending.
Here's what's coming up:
August 11th, 7:00 pm
Corporation, S-Corp or LLC? Things you need to know before you decide
- Are you a good candidate?
- Which entity type best serves your needs?
- Costs vs. benefits.
- Filing: When, Where and How?
- Tax and liability advantages.
- Compliance requirements.
- How NOT to lose livability protection.
One of the most important and complex decisions a business owner faces is whether to remain a sole proprietor or create a corporation, LLC or other entity. (LLC's have also become attractive for landlords looking for liability protection.)
The availability of on-line legal services has decreased the cost for setting up business entities and created the impression that the process is simple and straightforward. The truth is that every year we see clients who have created tax and legal nightmares because they didn't understand the initial filing process or the ongoing compliance requirements.
Our guest speaker will be an attorney who will discuss legal issues related to entity formation. If you are interested in attending, please e-mail us to reserve your seat.
Food for thought
Commit your work to the Lord, and then your plans will succeed. (Proverbs 16:3)
— Karen Spencer
President