Tax News

American Opportunity Tax Credit Replaces Hope Education Credit

Under the American Recovery and Reinvestment Act of 2009, the Hope Credit was renamed the American Opportunity Tax Credit. It was enhanced in six ways for 2009 and 2010:

  1. Qualifying period now covers first four years of college (Previously, only the first two years were covered.)
  2. Maximum credit is now $2,500 (from $1,800)
  3. AMT may now be offset
  4. Qualified expenses now include materials (books, computers, etc.) along with tuition and fees
  5. Up to 40 percent is now refundable (Prior to 2009 it was not refundable.)
  6. AGI phaseout range increased to $80,000-$90,000 for single and $160,000-$180,000 for married filing jointly

2010 Gift Tax Exclusion

For 2010, the amount of money you can gift to another individual without triggering a Gift Tax return remains $13,000 — the same as in 2009.

IRS Announces Employment Tax Audit Program Beginning November 2009

The IRS has begun a three year National Research Program (NRP). The Among other purposes, the NRP results will be used to analyze taxpayer compliance. Anita Bartels, Senior Program Analyst with the IRS believes the IRS will review over 2,000 employers each year.

The audit will focus on four primary areas:

  1. Worker classification (employee vs independent contractor)
  2. Fringe benefits
  3. S-Corp officer's compensation
  4. Reimbursed expenses (especially mileage)

California Estimated Tax Payments for 2010 Change (AGAIN!)

Prior to 2009, California required each of four estimated payments to be 25 percent of the total for the year. In 2009, the estimated payments changed to: 30%, 30%, 20% and 20%.

For 2010, they are changed to: 30%, 40%, 0% and 30%.

The due dates remain the same: April 15, June 15, September 15 and January 15, 2011.

Quick tax tip: Making your fourth state estimated tax payment by Dec. 31st will allow you to deduct it on your Federal 2010 return.

California Dependent Exemption Slashed

For Tax Year 2009 the California exemption credit for dependents has been reduced to $98, down from $309 in 2008. The net result of this change is an increase in California tax due of $211 for EACH dependent claimed on your return.

Don't forget your California Use Tax!

Don't know what California Use Tax is? Wondering if you owe anything? Find answers at our news page.

Important Dates:


 

Accountability News

Refer Three New Clients And WIN

We're excited about our new referral promotion. Read the details, and you will be too. A 3-day, 2-night vacation could be yours! Or, how about $500 in rebates on groceries or gasoline!

The first of our Refer 3 And Win 2010 Vacation Packages was awarded Friday Jan. 28th! Our client referred 3 new clients to us and WON!

Find out more.

Information For New Clients

We now have a page especially for people who are looking for a tax preparer — here.

Getting Ready For Your Tax Appointment

Tax law has always been complicated, and with all of the changes in the past few years it's become even more complex. For us, the answer to keeping up with all the changes is education. We complete our required Continuing Education each year, attend seminars, subscribe to numerous newsletters and journals and stay current with IRS updates and publications.

Still, the key to a great tax return is great records. You'll find tools to help you prepare at our Getting Ready page.

And, to help keep you current, we post updated information on our News page throughout the year.

New addtions to our 2010 Tax Staff

Tax Season Hours (Jan. 18th — April 15th)

Monday - Thursday
9:00am — 9:00pm

Friday & Saturday
9:00am — 5:00pm

Food For Thought

The hardest thing in the world to understand is the income tax. Albert Einstein

— Karen Spencer

President

 

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