Tax News
Deadline For Issuing Brokerage Statements Extended
The deadline for brokers to issue Form 1099-B's reporting gains and losses from stock transactions has been extended to Feb. 16th. The new deadline also applies to Form 1099-S's and 1099-Misc's reporting substitute dividends or tax-exempt interest as well as composite reporting statements that include 1099-INT or 1099-DIV. In previous years the deadline for issuing these statements had been Jan. 31st
2010 Mileage Rates
The IRS has issued standard mileage rates for 2010. Beginning on January 1 the rates will be:
- 50 cents per mile for business mileage, down from 55 cents in 2009
- 16.5 cents per mile for medical and moving, down from 24 cents in 2009
- 14 cents per mile for charitable mileage, no change from 2009
IRS Enforcement Activities Increasing
In an effort to close the "Tax Gap" and increase compliance with the tax code Congress increased the IRS budget to $12.2 billion for FY 2010. A majority of the increased funding is allocated to enforcement, which will increase to $5.5 billion.
With the increased funding the IRS will focus on:
- Increasing front-line enforcement resources
- Increasing compliance through enhanced research
- Investing in technology to improve computer matching of taxpayer records
With the budget increase and additional resources targeted towards enforcement the IRS is focused on increasing revenue and cracking down on tax evasion.
New Use Tax Requirements for Businesses
If you have $100,000 or more in gross receipts from all businesses you operate and you don't currently hold a reseller' s permit you are now required to register with the State Board of Equalization and pay any sales and use tax due by April 15, 2010. The new law applies to purchases made during the 2009 calendar year on which California sales tax was not charged by the vendor at time of purchase. You are required to report all such purchases and pay the applicable sales tax. This includes purchases made on the internet and from out-of-state vendors who do not collect California sales tax.
The requirement to pay tax on these purchases is not new. However, with more purchases each year being made on the Internet and from out-of-state sellers, California is placing a much higher priority on enforcement and collection
This fall the BOE sent 180,000 letters to taxpayers, informing them of the new registration and filing requirement. The letters went to corporations, partnerships, LLC's, Schedule C, E and F filers. If taxpayers do not respond to the letter, the BOE will register them automatically.
Individuals are also required to pay the applicable sales tax on purchases they make each year on which California sales tax was not charged by the vendor at time of purchase.. Taxes are paid on the FTB Form 540 when you file your individual tax return.
Currently the BOE has received 1,495 voluntary payments for a total of $6 million, which averages $4,000 per response. This new legislation has the potential of generating millions of dollars for the State of California.
Important Dates:
January 11—Tax returns can be e-filed
January 15— Fourth quarter 2009 Estimate due
January 18— Accountability Tax Season Office Hours begin
January 31—
- W-2's due to employees
- Fourth quarter Payroll Reports due
- Annual PR Reports due
Accountability News
Refer Three And WIN!
We are accepting new clients and greatly appreciate referrals from our clients. As a thank-you for your support, we're offering you a chance to win your choice of a three-day, two-night vacation or $500 in gas or grocery rebates.
For each new client you refer you will be entered into a drawing to be one of two lucky winners. Refer three clients and you win automatically! (A new client is anyone who has not patronized Accountability in the past five years and completes a return filing with us in 2010.)
Click here for more details — or call us at (909) 627-5927.
No Increase In Tax Preparation Fees!
2009 was a difficult year for many of our clients. Job losses, mortgage problems and the overall economic crisis have presented our nation with difficult challenges. One bright spot we have seen is people pulling together to help one another, sharing what they have with those in even greater need.
To assist you in stretching limited budgets our fee schedule for preparing 2009 tax returns will remain the same as 2008. As always, your preparation fees will be calculated based on the forms required to complete your return, so a change in your filing requirements may result in a change in your preparation fees.
Changes in Payroll Withholding In 2009 May Hurt You Now
As part of the effort to stimulate the economy the IRS & California changed 2009 withholding rates, which decreased the amount being withheld from your paycheck. This decrease in withholding could mean that you will owe taxes when you file your 2009 tax return.
We understand that filing your taxes is not something most people look forward to doing. However, the sooner you have your tax returns prepared the more time you have to prepare for paying any taxes you may owe.
Remember, if you do owe you still have until 4/15/10 to pay your taxes, even if you file your return in January.
Cash for Clunkers Taxable?
The Cash for Clunkers program was very successful for thousands of individuals. There has been confusion about this program regarding whether the voucher amount received is subject to income taxes. The good news is that under the Act, the voucher is not included in the gross income of the purchaser for federal income tax purposes.
Did you know — when you put The and IRS together, it spells Theirs?
Food For Thought
There are three things that will endure — faith, hope and love — and the greatest of these is love.
(1 Corinthians 13:13)
As we enter into a new year, let's remember to show love to others.
Accountability Office Hours:
January 2 - January 17, 2010
Monday - Thursday
9:30am - 4:30pm
Tax Season Hours begin January 18, 2010
— Karen Spencer
President