The maximum 401(k) contribution is $17,000 this year, a $500 increase over 2011. Individuals born before 1963 can put in as much as $22,500. The contribution limits apply to 403(b) and 457 plans as well. The ceiling on SIMPLEs stays at $11,500. Folks age 50 or older in 2012 can contribute an additional $2,500.

Employer payins to qualified plans can be based on up to $250,000 of pay. The payin limitation for defined contribution plans increases to $50,000 in 2012. That’s a $1,000 jump for Keogh plans, profit sharing plans and the like. Anyone making over $115,000 is highly paid for plan discrimination testing. The benefit limitation for pension plans increases to $200,000 this year.

The income ceilings on Roth IRA payins rise. Contributions phase out at AGIs of $173,000 to $183,000 for couples and $110,000 to $125,000 for singles.

The deduction phase outs for regular IRAs start at higher levels, ranging from $92,000 of AGI to $112,000 for couples and from $58,000 to $68,000 for singles. If only one spouse is covered by a plan, the phaseout zone for deducting a contribution for the uncovered spouse begins at $173,000 of AGI and finishes at $183,000.

There’s no change in the paying ceilings for IRAs and Roth IRAs. The limits remain at $5,000, plus $1,000 more for people who were born in 1962 or before.

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This year’s income tax brackets are a bit wider than those for 2011, because of an increase in inflation during the 12-month period ending last August that’s used to figure the adjustments. The income tax rates for this year didn’t change because the Bush tax cuts were extended through 2012.

The standard deductions for 2012 also increase by small amounts.

• Married couples can claim $11,900.
• If one spouse is age 65 or older…$13,050. If both are…$14,200.
• Singles can take $5,950.
• Those 65 and up can deduct $7,400.
• Heads of households can get $8,700 plus $1,450 more once they reach age 65.
• Blind people get $1,150 more ($1,450 if unmarried and not a surviving spouse).

Personal exemptions increase to $3,800 for filers and their dependents.

High-incomers don’t lose any of their itemized deductions and personal exemptions, continuing a break for them that took effect in 2010.

Under the Middle Class Tax Relief and Job Creation Act of 2012, enacted yesterday, workers will continue to receive larger paychecks for the rest of this year based on a lower social security tax withholding rate of 4.2 percent, which is two percentage points less than the 6.2 percent rate in effect prior to 2011. This reduced rate, originally in effect for all of 2011, was extended through the end of February by the Temporary Payroll Tax Cut Continuation Act of 2011, enacted Dec. 23.

No action is required by workers to continue receiving the payroll tax cut. As before, the lower rate will have no effect on workers’ future Social Security benefits.  The reduction in revenues to the Social Security Trust Fund will be made up by transfers from the General Fund.

Self-employed individuals will also benefit from a comparable rate reduction in the social security portion of the self-employment tax from 12.4 percent to 10.4 percent. For 2012, the social security tax applies to the first $110,100 of wages and net self-employment income received by an individual.

The new law also repeals the two-percent recapture tax included in the December legislation that effectively capped at $18,350 the amount of wages eligible for the payroll tax cut. As a result, the now repealed recapture tax does not apply.

The IRS will issue additional guidance, as needed, to implement the newly-extended payroll tax cut, and any further updates will be posted on IRS.gov.

6/2/2011
Deposit payroll tax for payments on May 25-27 if the semiweekly
deposit rule applies.



6/3/2011
Deposit payroll tax for payments on May 28-31 if the semiweekly
deposit rule applies.



6/8/2011
Deposit payroll tax for payments on Jun 1-3 if the semiweekly
deposit rule applies.



6/10/2011
Employers: Employees are required to report to you tips of $20 or
more earned during May.

Deposit payroll tax for payments on Jun 4-7 if the semiweekly
deposit rule applies.



6/15/2011
Individuals outside the U.S.: File 2010 Form 1040.

Individuals: Pay the second installment of estimated tax for
2011.

Employers: Deposit payroll tax for May if the monthly deposit
rule applies.

Corporations: Deposit the second installment of your 2011
estimated tax.

Deposit payroll tax for payments on Jun 8-10 if the semiweekly
deposit rule applies.



6/17/2011
Deposit payroll tax for payments on Jun 11-14 if the semiweekly
deposit rule applies.



6/22/2011
Deposit payroll tax for payments on Jun 15-17 if the semiweekly
deposit rule applies.



6/24/2011
Deposit payroll tax for payments on Jun 18-21 if the semiweekly
deposit rule applies.



6/29/2011
Deposit payroll tax for payments on Jun 22-24 if the semiweekly
deposit rule applies.



6/30/2011
File Form 730 and pay the tax on wagers accepted during May.

File Form 2290 and pay the tax for vehicles first used during May.



For further information on our accounting, bookeeping, tax preparation, auditing, Quickbooks classes, support, training and consulting, Contact Us or send us Email. Our CPA, Certified Quickbooks Pro Advisor, and customer service team will gladly answer all your questions.

Employers must pay their employees the hourly state minimum wage for all hours worked in Florida.  The definitions of “employer”, “employee”, and “wage” for state purposes are the same as those established under the federal Fair Labor Standards Act (FLSA).  Employers of “tipped employees” who meet eligibility requirements for the tip credit under the FLSA, may count tips actually received as wages under the Florida minimum wage.  However, the employer must pay “tipped employees” a direct wage.  The direct wage is calculated as equal to the minimum wage ($7.31) minus the 2003 tip credit ($3.02), or a direct hourly wage of $4.29 as of June 1, 2011.

For further information on our accounting, bookeeping, tax preparation, auditing, Quickbooks classes, support, training and consulting, Contact Us or send us Email. Our CPA, Certified Quickbooks Pro Advisor, and customer service team will gladly answer all your questions.

Keeping good records is a very important part of the growth and maintenance of your business. Good records will help you:

• Monitor the progress of your business
• Prepare your financial statements
• Identify source of receipts
• Keep track of deductible expenses
• Prepare your tax returns
• Support items reported on tax returns

Monitor the progress of your business

You need good records to monitor the progress of your business. Records can show whether your business is improving, which items are selling, or what changes you need to make. Good records can increase the likelihood of business success. 

Prepare your financial statements

You need good records to prepare accurate financial statements. These include income (profit and loss) statements and balance sheets. These statements can help you in dealing with your bank or creditors and help you manage your business. 

• An income statement shows the business income and expenses for a given period.
• A balance sheet shows the assets, liabilities, and your equity in the business on a given date. 

Identify source of receipts

You will receive money or property from many sources. Your records can identify the source of your receipts. You need this information to separate business from non-business receipts and taxable from nontaxable income. 

Keep track of deductible expenses

You may forget expenses when preparing your tax return unless you record them when they occur.

Prepare your tax return

You need good records to prepare your tax returns. These records must support the income, expenses, and credits you report. Generally, these are the same records you use to monitor your business and prepare your financial statement.

Support items reported on tax returns

You must keep your business records available at all times for inspection by the IRS. If the IRS examines any of your tax returns, you may be asked to explain the items reported. A complete set of records will speed up the examination.

So what’s the best way to keep records?

Simple: use any recordkeeping system that clearly and accurately reflects your income and expenses. Keep in mind your tax records must support all the income, tax deductions and credits listed on your tax return. Be sure to separate your business and personal receipts and your taxable and nontaxable income.

Recording Expenses: Record your expenses when you pay or incur them, depending on your method of accounting. It’s easy to forget last year’s expenses when you’re filling out this year’s return. Don’t overlook deductions for which you qualify.

Keeping a Record of your Business Assets: Your business assets are the property and equipment you own and use for your business. Keep a complete and detailed record of such assets showing when you acquired them, how much you paid for them and how the assets are used in your business. This record will allow you to depreciate your assets properly and report the correct gain or loss when you dispose of them.

How long should I keep records?

The length of time you should keep a document depends on the action, expense, or event the document verifies. You must keep your records as long as they may be needed to prove the income or deductions on a tax return.

How long should I keep employment tax records?

You must keep all records of employment taxes for at least four years.

Are the records connected to assets?

Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. You must keep these records to figure any depreciation, amortization or depletion deduction and to figure the gain or loss when you sell or otherwise dispose of the property.

What should I do when I no longer need my records for tax purposes?

When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes. For example, your insurance company or creditors may require you to keep them longer than the IRS does.

For further information on our accounting, bookeeping, tax preparation, auditing, Quickbooks classes, support, training and consulting, Contact Us or send us Email. Our CPA, Certified Quickbooks Pro Advisor, and customer service team will gladly answer all your questions.

There are several ways to file Form 4868 for an extension.

• File electronically
• Paid prepares
• Tax software
• Download a paper version Form 4868 and file by mail.

 If you cannot pay the full amount you will still benefit from filing the return and paying as much as possible by April 18.

If you are unable to pay the total balance due, you should pay as much as possible and apply for an installment agreement to avoid penalties and interest.

Taxpayers wishing to pay off a tax debt through an installment agreement, and owe:

• $25,000 or less in combined tax, penalties, and interest can use the Online Payment Agreement (OPA) or call the number on the bill or notice (have the bill or notice available, along with the social security number). A fill-in Request for Installment Agreement, Form 9465 (PDF), is available online that can be mailed to the address on the bill.
• More than $25,000 in combined tax, penalties, and interest may still qualify for an installment agreement, but a Collection Information Statement, Form 433F (PDF) may need to be completed. Call the number on the bill or mail the Request for Installment Agreement, Form 9465 (PDF) and Form 433F (PDF) to the address on the bill.

Payment options:

There are several payment options available to taxpayers who have a balance due.

Payments can be made by:

• Electronic funds withdrawal
• Credit or debit card
• The Electronic Federal Tax Payment System 
• Check or Money Order

Taxpayers who pay by check or money order should make the payment out to the “United States Treasury.” The tax year, form number and Social Security number should all be included on the check or money order. Also, include Form 1040-V, Payment Voucher, along with the payment and tax return. If you have already submitted your tax return but still need to pay all or some of the balance, you may mail the check or money order to the IRS with Form 1040-V.

Reminder, an extension of time to file is not an extension of time to pay. 

For further information on our accounting, bookeeping, tax preparation, auditing, Quickbooks classes, support, training and consulting, Contact Us or send us Email. Our CPA, Certified Quickbooks Pro Advisor, and customer service team will gladly answer all your questions.

4/1/2011

4/6/2011 Deposit payroll tax for payments on Mar 30- Apr 1 (semiweekly deposit).

4/8/2011 Deposit payroll tax for payments on Apr 2-5 (semiweekly
deposit).

4/11/2011 Employers: Employees are required to report to you tips of $20 or
more earned during March.

4/13/2011 Deposit payroll tax for payments on Apr 6-8 (semiweekly
deposit).

4/18/2011 Individuals: File 2010 Form 1040, 1040A, or 1040EZ. For
automatic 6-month extension file Form 4868 and deposit
estimated tax. Pay the first installment of 2011 estimated tax.

Partnerships: File 2010 Form 1065 and furnish a copy of Sch. K-1
to each partner.

Electing Large Partnerships: File 2010 Form 1065 calendar year
return.

Household Employers: File Sch. H with Form 1040 if you paid
$1,700 or more to a household employee.

Corporations: Deposit the first installment of your estimated
tax for 2011.

Employers: Deposit payroll tax for Mar. if the monthly deposit
rule applies.

Deposit payroll tax for payments on Apr 9-12 if the semiweekly
deposit rule applies.

4/20/2011 Deposit payroll tax for payments on Apr 13-15 (semiweekly
deposit).

4/22/2011 Deposit payroll tax for payments on Apr 16-19 (semiweekly
deposit).

4/27/2011 Deposit payroll tax for payments on Apr 20-22 (semiweekly
deposit).

4/29/2011 Deposit payroll tax for payments on Apr 23-26 (semiweekly
deposit).

For further information on our accounting, bookeeping, tax preparation, auditing, Quickbooks classes, support, training and consulting, Contact Us or send us Email. Our CPA, Certified Quickbooks Pro Advisor, and customer service team will gladly answer all your questions.

SOLE PROPRIETOR - Individual who owns an unincorporated business by himself/herself.

PARTNERSHIP – a relationship where two or more persons join together to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business.

CORPORATION – a relationship where prospective shareholders exchange money, property, or both, for the corporation’s capital stock. Profits are taxed to the corporation when earned and then taxed to the shareholders when distributed as dividends.

S CORPORATION – a corporation, meeting certain criteria, that elects to be treated as an S corporation. Generally an S corporation is exempt from income tax; the shareholders report the S corporation’s income, deductions, loss and credits on their individual tax returns.

LIMITED LIABILITY CORPORATION – an entity— statutorily authorized in certain states—that is characterized by limited liability for debts similar to that of a corporation, management by members or managers, and pass-through taxation similar to that of a partnership.

For further information on our accounting, bookeeping, tax preparation, auditing, Quickbooks classes, support, training and consulting, Contact Us or send us Email. Our CPA, Certified Quickbooks Pro Advisor, and customer service team will gladly answer all your questions.

3/4/2011
Deposit payroll tax for payments on Feb 26 – Mar 1 if the
semiweekly deposit rule applies.



3/9/2011
Deposit payroll tax for payments on Mar 2-4 if the semiweekly
deposit rule applies.



3/10/2011
Employers: Employees are required to report to you tips of $20 or
more earned during February.


3/11/2011
Deposit payroll tax for payments on Mar 5-8 if the semiweekly
deposit rule applies.



3/15/2011
Corporations: File Form 1120 for 2010 calendar year and pay any
tax due. For automatic 6-month extension, file Form 7004 and
deposit estimated tax.

Employers: Deposit payroll tax for Feb. if the monthly deposit
rule applies.

S Corporations: File Form 1120S for 2010 calendar year and pay
any tax due. Furnish a copy of Sch. K-1 to each shareholder. File
Form 2553 to elect S Corporation status beginning with calendar
year 2011.

File Form 2553 to elect to be treated as an S Corporation
beginning with calendar year 2011.

Electing Large Partnerships: Furnish Sch. K-1 (Form 1065-B) to
each partner.



3/16/2011
Deposit payroll tax for payments on Mar 9-11 if the semiweekly
deposit rule applies.



3/18/2011
Deposit payroll tax for payments on Mar 12-15 if the semiweekly
deposit rule applies.



3/23/2011
Deposit payroll tax for payments on Mar 16-18 if the semiweekly
deposit rule applies.



3/25/2011
Deposit payroll tax for payments on Mar 19-22 if the semiweekly
deposit rule applies.



3/30/2011
Deposit payroll tax for payments on Mar 23-25 if the semiweekly
deposit rule applies.



3/31/2011
Electronically file Forms W-2, W-2G, 1098, 1099, and 8027.

File Form 2290 and pay the tax for vehicles first used in
February.

File Form 730 and pay the tax on wagers accepted during February.



 For further information on our accounting, bookeeping, tax preparation, auditing, Quickbooks classes, support, training and consulting, Contact Us or send us Email. Our CPA, Certified Quickbooks Pro Advisor, and customer service team will gladly answer all your questions.