Tax News
Attention Landlords: New 1099 Reporting Requirements
It looks like Congress is going to either delay or repeal the enhanced 1099 reporting requirements scheduled to begin January 1, 2011 for most businesses. Unfortunately, the additional 1099 requirements for landlords will be retained.
Beginning January 1, landlords must track all payments to painters, plumbers, handymen, accountants and anyone else who performs services related to their rental property. If the total paid to any individual or company exceeds $600 for the year the landlord will be required to file Form 1099-MISC with both the service provider and the IRS in January 2012.
Landlords will need all service providers to complete a Form W-9 Request for Taxpayer ID Number before paying for any services to be performed. Form W-9 will give you all the information required when filing Form 1099. You can download Form W-9 from irs.gov.
Failure to properly file 1099's will result in penalties for each 1099 not filed and a loss of the deduction!
Home Energy Efficiency Credit Expiring
Time is running out to take advantage of the Federal tax credit for making energy saving upgrades to your home. To qualify for the credit all improvements must be installed by December 31, 2010. Remember that no more than $1,500 in credit can be deducted for 2009 and 2010 combined. Any credit deducted on your 2009 return reduces the amount available for 2010.
No Decision Regarding Renewal of Bush Era Tax Laws
Recent reports from Washington indicate that a compromise will be reached prior to the end of the year extending most if not all of the Bush era tax cuts. Unfortunately no additional details are available at this time.
Also, we do not have final legislation renewing a number of credits that expired 12/31/09. These credits range from the expanded education credit to direct charitable distributions from IRA's.
Is My Health Insurance Going To Be Taxable?
Update: In a prior newsletter we discussed the misunderstandings circulating regarding the reporting ((and taxing) of employer-paid health insurance. The IRS has since issued new guidelines:
- The cost paid by your employer to provide coverage is still not taxable.
- The requirement for employers to report the cost of coverage on your W-2 has been deferred, making this reporting optional in 2011.
Stay tuned for further changes.
Important Dates
December 23—January 2. Accountability closed for holidays
(All payroll processing will be completed as normalduring our Holiday break)
January 15. Two deadlines:
- Fourth Federal and State Estimated Tax payment due (Pay the state by Dec. 31 to deduct on 2010 return)
- First day to e-file 2010 tax returns.
March 15. Corporate tax filing deadline
Accountability News
Tax Season 2011 Is (almost) Here
Thanksgiving is over, Christmas is just around the corner and we're just over a month away from Tax Season 2011! Where does the time go?
Below are three compliance issues we wanted to make you aware of prior to the beginning of the season.
Email Security. Technology, especially the ease of communicating via email, has had a huge impact (mostly for the better) on our business. Unfortunately there is also a downside: Security, or the lack thereof. Beginning with Tax Season 2011 we will be encrypting all email we send that contains sensitive financial information.
We will be including a flier with our annual tax letter detailing the encryption process and step-by-step instructions for opening encrypted email.
Engagement Letter. We will need to have a signed Engagement Letter and Privacy Policy for every client prior to preparing a tax return. We will have a copy of our 2011 engagement letter available on our website for you to review prior to your tax appointment. Clients who mail, email or fax their information to us rather than coming to our office will be required to mail, email or fax a copy of the signed letter to us before we can begin work on their return.
Missing Info. Taxes are complicated and many of our clients need to get additional missing information to us after their appointment in order to complete their return. To meet IRS compliance requirements, all additional information must be hard copy either emailed, faxed or mailed to us. We are no longer permitted to take information over the phone.
If we need additional information to complete your return we will print a Missing Information report for you listing all items needed. When you have all of the needed information you will email, ax or mail it to our office. An added benefit of hard copy is that we can scan it into your file along with the rest of the information used to prepare your return.
Get A Head Start On Your 2010 Business Tax Return and Save $$$
To help you get started on your year-end closing (and save you some money) we're having an Early Bird Special for our business tax clients. We will be discounting our fees for the accounting review portion of your business tax preparation fees.
Schedule an appointment by December 15 to have us review the first three quarters of your 2010 books and we'll discount our fee by 20 percent! This offer is available to all business tax filers, from self-employed Schedule C's to corporations.
An additional benefit: by having the first three quarters done before year-end, the time (and fees) required to prepare your tax return next spring will be reduced. This should speed the process, allowing us to complete your return filing earlier!
Merry Christmas & Happy New Year
We want to wish everyone a blessed holiday season as we celebrate the birth of our savior. We know the past few years have been difficult for many but let's dwell on what we have and give thanks to God. It is during times like these that we learn what is truly important and trust in God to give us comfort and peace. Our prayer for you this holiday season is that you and your families are healthy and happy.
God bless you.
— Karen, Gary, Vikki, Sally & Leah
Office Hours:
Monday — Thursday
Friday and Saturday |
Tax Season Hours:(Beginning January 22, 2011) Monday — Thursday Friday and Saturday |