HomeBusinessTaxSavings.com

WHAT IS A “PROFESSIONAL SERVICE?”

Ron — Thu, 24 Jun 2010 18:16:06 +0000

What would the new definition of the term
"Professional Services" include? It includes
YOU if your S-Corp is “a trade or business in
which substantially all of the business activities
involve providing services in the fields of health,
law, lobbying, engineering, architecture,
accounting, actuarial science, performing arts,
athletics, investment advice or management,
brokerage services, or consulting.”

That last category, "consulting," is a subjective
catch-all that begs its own definition — but so far
doesn’t get one.

The Tax Code "clarifies" the term "consulting" this
way: "providing advice and counsel."

That's of little help!

Don't SALES people provide advice and counsel?
"I advise you to buy my product, and I will counsel
you on the reasons why."

Folks, this "Tax Extender" bill — complete with the
some 200+ "amendments" tacked on by various
Senators, is going to anything BUT simplify taxes!

It's gonna be messy!

ARE YOU ONE OF MORE THAN 4-MILLION S-CORPORATIONS?

Ron — Thu, 24 Jun 2010 18:15:23 +0000

If so, don’t cancel you free subscription to
"Tax Tips You Can Bank On," because major
changes are in this new tax bill, and they are
not kind to S-Corps.

If passed, the Tax Extender Bill will make
S-Corps begin paying Self-Employment
taxes if your company provides "professional
services." AND, adding insult to injury, the
Bill re-defines the term — much more broadly.

“Tax Extender”

Ron — Thu, 24 Jun 2010 18:14:26 +0000

The “Tax Extender” Bill is coming up for vote
in the Senate. Since the House version of the
Bill came to the Senate last month, nearly 200
amendments have been added by the Senate.
Can you believe it?

I'm saying to myself, "Self, this is not what they
call 'tax simplification'."

IF YOU HIRE YOUR KIDS OR GRANDKIDS, HERE’S HOW TO MAKE IT COUNT – BIG-TIME!

Ron — Tue, 15 Jun 2010 17:18:43 +0000

You can match the child's total earnings (up to a $5,000 max.)
as a contribution to a Roth IRA.

Assuming the minor is only 13 years old, this one-time
$5,000 contribution, assuming a modest 8% growth, will be
worth nearly a half-million dollars by age 70 — even if they do
nothing further but leave it there to grow!

Another benefit – The contributions (that's the amount put in),
but not the earnings (that's the interests/profit/dividends), may
be withdrawn tax-free at any time. That amount could, for
example, be pulled out for a down-payment on a home —
without adverse tax consequences.

HIRING YOUR CHILDREN THIS SUMMER? What the big print giveth, the fine print may taketh away.

Ron — Tue, 15 Jun 2010 17:17:56 +0000

You may know from Chapter 6 of "Home Business Tax
Savings, Made Easy!" that minors can earn up to $5,700
per year in "earned income" tax free.

BUT be aware of the fine print — that tax-free amount
is capped at $950 (not $5,700!) if their "UNearned income"
is more than $300.

Hey, of course that doesn't make any sense. Don’t
try to use logic to understanding it. This is tax law, not
real life!

TAXPAYER ALERT! UNCLE SAM HAS FOUND SOMETHINE ELSE TO TAX!

Ron — Tue, 15 Jun 2010 17:16:59 +0000

Expect the cost in indoor tanning to go up! Yep,
the feds have told that industry to begin collecting
a 10% tax from all tanning customers starting July 1.

You may be in luck however if you tan at a fitness
membership club like Gold's Gym. The new tax
regulations provide an exception for certain fitness
facilities that offer tanning "as an incidental service
to members without a separately identifiable fee."

Just when you think they've taxed everything possible,
they go "Oops! We missed this one! Let's go get it."

Is this a great country, or what? :- )

Home-Business Tax Breaks Just Got EVEN BETTER!!!

Ron — Sun, 13 Jun 2010 17:16:03 +0000

You probably already know (if you have read
"Home Business Tax Savings Made Easy!" )
that new business "Start-Up Costs" are tax-
deductible up to $5,000.

"Start-Up Costs" are those expenses you need
to incur, just to get ready to be in business.
Expenses incurred before you are really
"open for business" with a product or service
to sell.

That $5,000 limitation is now increased
to $20,000!

Most home-based businesses don't require
even $5,000 to get up and running, but if
you are starting one that does require bigger
expenditures up-front, this is great news to you.

THE BIGGEST TAX BREAKS IN AMERICA BELONG TO HOME-BUSINESS OWNERS LIKE YOU!

Ron — Sun, 06 Jun 2010 17:07:53 +0000

Are you taking advantage of the BIGGEST
home- business tax deductions you can
qualify for? If you’re sure your answer is yes,
you can skip to the next item in this newsletter.

Otherwise…

Since NOBODY gets bigger tax breaks than home-
based business owners (trust me on that!), let's do
a quick review of what they are, how to qualify for
them, and how to keep bullet-proof records easily.

www.homebusinesstaxsavings.com/events

DID YOU HEAR THE ‘CELL PHONE’ TAX-DEDUCTION ANNOUNCEMENT?

Ron — Sat, 05 Jun 2010 17:10:19 +0000

I am asked so often about tax-deductions for cellular
phones, that I want to make sure you know this —

The IRS has issued a "Safe Harbor" ruling. That
means "you do not have to follow this, but if you do,
the auditors will not challenge you."

The ruling says if you have a cell phone that is primarily
for business purposes, you may claim 75% of the costs
as a tax-deductible business expense — and no special
recordkeepingis required.

DOES CONGRESS EVER THINK ABOUT THE CONSEQUENCES OF LEGISLATION THEY PASS?

Ron — Sat, 05 Jun 2010 17:06:40 +0000

In your home-based business, do you ever pay $600
or more — over the course of the entire year — to any
vendors, suppliers, stores, print shops, etc.

Of course!
       Autoship purchases?
      Post Office or UPS?
       Staples or Office Depot?
       Airlines?
       Kinko's or a Print Shop?

Surprise!

Quietly tucked into the "Obamacare" health bill is
a little item that has nothing to do with healthcare,
but a LOT to do with your small business.

Here's what happened.

Congress thinks a lot of businesses aren’t reporting
all of their income, and thus under-paying their taxes.
So their brilliant solution?

A new law will force every taxpayer who spends $600
or more with any individual person or company, to
file a 1099 at the end of the year for every single
one of them.

Yes, that includes companies like Best Buys, United
Airlines, and Vista Print, in addition to individuals
such as Independent Contractors, freelancers, etc.

This requirement specifically includes Corporations,
which were formerly exempt from this requirement.

As a home-based business owner, you may need
to begin collecting Employer Identification Numbers
from the sales clerk at the Mac Store, your cell phone
company, your internet service provider, and even
your landlord.

The Commissioner of the IRS, recognizing the huge
additional burden this places on taxpayers (as well
as the IRS computer system!), claims they will be
looking at a variety of options for minimizing the
impact.

He has mentioned only ONE so far:

Since the IRS already requires all credit card
companies and banking institutions to turn over
their complete records to the IRS every year
(including overseas transactions), you may be
able to get out of filing 1099s for companies
you pay by credit card or debit card.

If course it is always better to pay any business
expense by credit card, because it provides
additional documentation. We may soon have
another incentive to do so.

Possible good news?

This new legal requirement doesn't go into effect
until 2012 so there still is time for Congress to
come to its senses and rescind the law, or for
the IRS to find ways to streamline the requirement.

I'll keep you posted as this mess is dealt with.