CAPBT Business Services

Tax Preparation Services

noreply@blogger.com (Unknown) — Sun, 27 Oct 2013 05:12:00 +0000

Reduce Your Income

noreply@blogger.com (Unknown) — Sun, 06 Oct 2013 02:12:00 +0000

Category:
Your Income

Reduce Your Income: Hire Your Kids

If you own your own business, by hiring your children you can save in the following ways:

Salaries paid to children under 18 are not subject to Social Security or unemployment taxes (in most states).
No Federal withholding taxes are required if the child is under age 21 and earns under $5,950 per year.
Even if the child must pay taxes, the child’s rate of tax is normally lower than your own rate.
You should not have to pay worker’s compensation for the child as you would on a non-family member.

Set it up correctly

To ensure your child’s income is not challenged here are some suggestions:

Provide a job that your child can reasonably handle. Ideas include; filling the company vending machine, copying, clean up, mailing, help with advertising, light packaging, light typing and customer service.
Pay your child at least minimum wage and a wage rate that is comparable to what you would pay someone else to do the work.
Make payments periodic (at least once per month).
Include a W-2 at year-end.
Keep the same payroll records as you do for other employees.

Other things to note

Hiring your children to work for you does not apply if your business is a C-Corporation.
This benefit works best if your business is unincorporated (sole-proprietor).
Do not have children conduct dangerous or heavy industrial work as this could come under review by the Department of Labor.
Treat your child like other employees. This includes time-cards and training.

Besides the tax benefits, hiring your children can gain them valuable experience and help them understand what you do every day.

IR-2013-77: Tax-filing and Payment Extensions Expire Oct. 15; Check Eligibility for Overlooked Tax Benefits; Choose e-file; Payment Options Available

noreply@blogger.com (Unknown) — Fri, 04 Oct 2013 01:51:00 +0000

IR-2013-77: Tax-filing and Payment Extensions Expire Oct. 15; Check Eligibility for Overlooked Tax Benefits; Choose e-file; Payment Options Available

PAY IT FORWARD . This blog is about everything and anything. Every day we find out something new, and we would like you to share your new knowledge with the community! This blog is used as a learning tool to provide a stimulating communication platform (blog) in making knowledge accessible to anyone who stumbles upon it.

The New Premium Tax Credit

noreply@blogger.com (Unknown) — Tue, 01 Oct 2013 17:37:00 +0000

Category:
What's New

The New Premium Tax Credit

Claim it now or take it later?

Effective October 1^st, there is a new tax credit available; The Premium Tax Credit. If you are eligible for this credit you can decide to take it now based on your estimated income for 2014 or take it later when you file your tax return for 2014. Who does this impact and what should you do?

What is the Credit and who is eligible?

Topline: If you have health insurance available from your employer, this credit is not for you. If, on the other hand, you are self-employed, your employer recently provided you a notice they are moving health insurance coverage to the “exchange or marketplace”, or you currently do not have health insurance then this information is important to understand.

Beginning in October, 2013 there is a new Health Insurance Marketplace established as part of Obamacare. Open enrollment in these health insurance plans runs from October 1, 2013 through March 31, 2014. If you are eligible and enroll in one of these plans through the Insurance Marketplace you may be eligible to have your premium reduced by the new Premium Tax Credit.
To be eligible for the Premium Tax Credit you must;

buy your health insurance through the new Health Insurance Marketplace (state exchanges)
be ineligible for health insurance coverage through an employer or through other government programs
not be claimed as a dependent on someone else’s tax return
if married, file a joint tax return
meet certain income requirements

Take it now or claim it later?

One of the tricky decisions you’ll make if enrolling for health insurance through the Marketplace is deciding to take the Premium Tax Credit to reduce your monthly health insurance premium payments or wait and receive the tax credit when you file your 2014 tax return. Here are some tips:

Predictable income? If your can accurately predict your 2014 income and number of dependents consider applying an estimated credit now to reduce your monthly health insurance cost.
Predictable family situation? If you know the number of dependents you will have in 2014 and your status (married, single, etc.) in addition to your income consider applying the credit during the year. If your family situation changes during the year you can always update your profile in the plan.
Understand the downside. If you misrepresent your income and it impacts your eligibility for the Premium Tax Credit you will have to repay the credit on your tax return. This could become a real financial hardship.
Middle ground? Consider estimating your income, but make it slightly higher than you anticipate. This way your monthly health insurance premium will be a bit higher, but you may also receive a larger refund at the end of the year.

Remember, beginning in 2014 if you do not have health insurance you may be subject to new penalties payable when you file your tax return.

The New Premium Tax Credit

CAPBT News Digests Blog

noreply@blogger.com (Unknown) — Tue, 03 Sep 2013 15:58:00 +0000

CAPBT News Digests Blog

PAY IT FORWARD . This blog is about everything and anything. Every day we find out something new, and we would like you to share your new knowledge with the community! This blog is used as a learning tool to provide a stimulating communication platform (blog) in making knowledge accessible to anyone who stumbles upon it.

IRS Health Care Tax Tip 2013-01: IRS Website Explains Tax Provisions of the Health Care Law

noreply@blogger.com (Unknown) — Fri, 16 Aug 2013 03:36:00 +0000

IRS Health Care Tax Tip 2013-01: IRS Website Explains Tax Provisions of the Health Care Law

IRS Summertime Tax Tip 2013-14: Eight Tips for Taxpayers Who Owe Taxes

noreply@blogger.com (Unknown) — Fri, 02 Aug 2013 22:11:00 +0000

Issue Number: IRS Summertime Tax Tip 2013-14

Inside This Issue

Eight Tips for Taxpayers Who Owe Taxes

While most taxpayers get a refund from the IRS when they file their taxes, some do not. The IRS offers several payment options for those who owe taxes.

Here are eight tips for those who owe federal taxes.

1. Tax bill payments. If you get a bill from the IRS this summer, you should pay it as soon as possible to save money. You can pay by check, money order, cashier’s check or cash. If you cannot pay it all, consider getting a loan to pay the bill in full. The interest rate for a loan may be less than the interest and penalties the IRS must charge by law.

2. Electronic Funds Transfer. It’s easy to pay your tax bill by electronic funds transfer. Just visit IRS.gov and use the Electronic Federal Tax Payment System. You may also use EFTPS to pay your taxes by phone at 800-555-4477.

3. Credit or debit card payments. You can also pay your tax bill with a credit or debit card. Even though the card company may charge an extra fee for a tax payment, the costs of using a credit or debit card may be less than the cost of an IRS payment plan. To pay by credit or debit card, contact one of the processing companies listed at IRS.gov.

4. More time to pay. You may qualify for a short-term agreement to pay your taxes. This may apply if you can fully pay your taxes in 120 days or less. You can request it through the Online Payment Agreementapplication at IRS.gov. You may also call the IRS at the number listed on the last notice you received. If you can’t find the notice, call 800-829-1040 for help. There is generally no set-up fee for a short-term agreement.

5. Installment Agreement. If you can’t pay in full at one time and can’t get a loan, you may want to apply for a monthly payment plan. If you owe $50,000 or less, you can apply using the IRS Online Payment Agreementapplication. It’s quick and easy. If approved, IRS will notify you immediately. You can arrange to make your payments by direct debit. This type of payment plan helps avoid missed payments and may help avoid a tax lien that would damage your credit.

Taxpayers may also apply using IRS Form 9465, Installment Agreement Request. If you owe more than $50,000, you must also complete Form 433F, Collection Information Statement. For approved payment plans the one-time user fee is $105 for standard and payroll deduction agreements. The direct debit agreement fee is $52. The fee is $43 if your income is below a certain level.

6. Offer in Compromise. The IRS Offer-in-Compromise program allows you to settle your tax debt for less than the full amount you owe. An OIC may be an option if you can't fully pay your taxes through an installment agreement or other payment alternative. The IRS may accept an OIC if the amount offered represents the most IRS can expect to collect within a reasonable time. Use the OIC Pre-Qualifier tool to see if you may be eligible before you apply. The tool will also direct you to other options if an OIC is not right for you.

7. Fresh Start. If you’re struggling to pay your taxes, the IRS Fresh Start initiative may help you. Fresh Start makes it easier for individual and small business taxpayers to pay back taxes and avoid tax liens.

8. Check withholding. You may be able to avoid owing taxes in future years by increasing the taxes your employer withholds from your pay. To do this, file a revised Form W-4, Employee’s Withholding Allowance Certificate, with your employer. The IRS Withholding Calculator tool at IRS.gov can help you fill out a new W-4.

For more information about payment options or IRS's Fresh Start program, visit IRS.gov. Also, see Publications 594, The IRS Collection Process, and 966, Electronic Choices to Pay All Your Federal Taxes, for more information. Get publications and forms at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Bookkeeping Software

noreply@blogger.com (Unknown) — Thu, 25 Jul 2013 20:57:00 +0000

Bookkeeping Tips

Tax Preparation

noreply@blogger.com (Unknown) — Thu, 25 Jul 2013 20:55:00 +0000

Tax Preparation

Gift Certificates and Cards

noreply@blogger.com (Unknown) — Thu, 25 Jul 2013 18:24:00 +0000

Gift Certificates & Cards

Back to School Supply

noreply@blogger.com (Unknown) — Thu, 25 Jul 2013 18:20:00 +0000

Back to School Supply

The Chances of Being Audited

noreply@blogger.com (Unknown) — Sat, 08 Jun 2013 04:17:00 +0000

The Chances of Being Audited

Here is what is happening now

Every year the IRS publishes the statistics of who they are examining. Provided here are the last three years of published information and a look back to 2008 to see any trends:

Audit Rate Statistics for INDIVIDUALS
FiscalYear Year	2012	2011	2010	*2008*
All Individual Tax Returns	1.03%	1.11%	1.11%	1.00 %
No Income (AGI)	2.67%	3.42%	3.19%	2.15%
Income under $25,000	1.05%	1.22%	1.18%	.90%
$25,000 - 50,000	.70%	.73%	.73%	.72%
$50,000 - 75,000	.64%	.83%	.78%	.69%
$75,000 - 100,000	.64%	.82%	.64%	.69%
$100,000 - 200,000	.85%	1.00%	.71%	.98%
$200,000 - 500,000	1.96%	2.66%	1.92%	1.92%
$500,000 - $1 million	3.57%	5.38%	3.37%	2.98%
$1 million - $5 million	8.90%	11.80%	6.67%	4.02%
$5 million - 10 million	17.94%	20.75%	11.55%	6.47%
$10 million and over	27.37%	29.93%	18.38%	9.77%
Note: These audit rates are stated as a percent of total tax returns with "total positive income" (TPI) as claimed on individual tax returns. In general the examinations are for tax returns filed in the previous calendar year. Source: IRS Data Books

Observations:

	After dramatic audit increases in incomes over $200,000 during 2011, the audit rates have come down slightly, but still at least 2x the rates in 2008.
	Those with incomes over $10 million will have a 1 in 4 chance of being audited.
	Automatic spending cuts from sequestration could impact the audit rates in 2013. How far they will drop is anyone''s guess.
	It is also unknown what the 2013 tax increases for those with incomes over $250,000 will do to audit rates as more of the total revenue collected will come from these upper income groups.

Play it safe

Always retain your tax records and support documents for as long as they may be needed to substantiate your tax return. This is usually three years after the filing due date or when the tax return was actually filed (whichever is later). Make sure you include any state record retention requirements as you review when it is safe to destroy old records. Remember some records need to be retained indefinitely. This includes, at minimum, copies of original tax returns, legal documents, and real estate transactions.

A Dozen Tax Planning Triggers

noreply@blogger.com (Unknown) — Sat, 08 Jun 2013 04:04:00 +0000

A Dozen Tax Planning Triggers

With all the tax law changes for 2013 here are some things that should trigger you to conduct a full tax planning session to ensure your tax bill next year is not higher than it needs to be.


	You owed tax in 2012. With tax rate increases in 2013 you may be in for a big surprise.
	Your household income is over $150,000 single and $200,000 joint. There are a number of new taxes that could impact you and your family. This includes things like; itemized deduction phase-out, exemption phase-outs, increase in capital gains tax rate, increase in general dividend tax rate, new medicare surtaxes plus more.
	You are getting married or divorced. The tax penalty for being married is higher than ever. Are you prepared?
	You have kids attending college next year. There are a number of tax programs that can help.
	You have a small business. There are depreciation benefits plus new tax laws, mentioned earlier, that will also impact any "flow through" business entity like Sub Chapter S or LLC companies.
	You plan on selling investments. Capital Gains tax rates can now range from 0% to 39.6% (or even higher with Medicare surtaxes added in 2013).
	There are changes in your employer provided benefits. These changes could impact your taxable income this year.
	You buy, sell or go through home foreclosure. Understanding foreclosure tax programs could save you thousands.
	You have major medical expenses. The threshold for itemized medical deductions goes from 7.5% to 10% for those under 65 years old.
	You recently lost or changed jobs. Federal unemployment benefits remain extended over historical levels.
	You have not conducted a tax withholding review. New tax rates and laws, including the reintroduction of 6.2% Social Security tax could catch you by surprise.
	Your estate has not been reviewed in the past 12 months. New gift tax and estate tax laws make 2013 a key year for an estate tax review.

If any of these triggers apply to you, please schedule a tax planning appointment.

Book Store

noreply@blogger.com (Unknown) — Thu, 16 May 2013 02:43:00 +0000

Where's My Refund? 2013 Edition

noreply@blogger.com (Unknown) — Sun, 03 Mar 2013 02:01:00 +0000

Where's My Refund? 2013 Edition

"Where's my Refund?" This popular feature on the IRS web site (www.irs.gov) allows you to see the status of your refund after filing your income tax return.

Since the IRS only started processing tax returns after January 30th and did not start accepting tax returns with educational credits or adoption credits until late in February, when can you expect to see your refund? Per the IRS, 9 out of 10 refunds are being processed within 21 days.

If you wish to check on the status of your refund this is what you should know:

When to check:

72 hours after an e-filed tax return confirmation
4 weeks after a mailed tax return is sent

What you need to provide:

Social Security number
Filing Status
EXACT refund amount

How often to check?

Once a day. The IRS only updates the status of your return once a day, usually overnight. This is important because too many refund status requests can limit your ability to access this feature on the IRS web site.

Some returns will be delayed.

If your tax return has errors in it, it will be delayed. In addition, your tax return could be delayed if it has items on it that are not ready to be processed due to late tax law changes. This includes tax returns with the following information:

Depreciation
Energy Credits
General Business Credits

But perhaps most importantly, the IRS may delay processing your refund if it has questions, often to ensure you are not being subject to identity fraud.

To check on your status simply logon to www.irs.gov and click on the link on the top center portion of the IRS home page

IRS TAX TIP 2013-01: Who Should File a 2012 Tax Return?

noreply@blogger.com (Unknown) — Tue, 29 Jan 2013 00:38:00 +0000

Issue Number: IRS TAX TIP 2013-01

Inside This Issue

Who Should File a 2012 Tax Return?

If you received income during 2012, you may need to file a tax return in 2013. The amount of your income, your filing status, your age and the type of income you received will determine whether you’re required to file. Even if you are not required to file a tax return, you may still want to file. You may get a refund if you’ve had too much federal income tax withheld from your pay or qualify for certain tax credits.

You can find income tax filing requirements on IRS.gov. The instructions for Forms 1040, 1040A or 1040EZ also list filing requirements. The Interactive Tax Assistant tool, also available on the IRS website, is another helpful resource. The ITA tool answers many of your tax law questions including whether you need to file a return.

Even if you’ve determined that you don’t need to file a tax return this year, you may still want to file. Here are five reasons why:

1. Federal Income Tax Withheld. If your employer withheld federal income tax from your pay, if you made estimated tax payments, or if you had a prior year overpayment applied to this year’s tax, you could be due a refund. File a return to claim any excess tax you paid during the year.

2. Earned Income Tax Credit. If you worked but earned less than $50,270 last year, you may qualify for EITC. EITC is a refundable tax credit; which means if you qualify you could receive EITC as a tax refund. Families with qualifying children may qualify to get up to $5,891 dollars. You can’t get the credit unless you file a return and claim it. Use the EITC Assistant to find out if you qualify.

3. Additional Child Tax Credit. If you have at least one qualifying child and you don’t get the full amount of the Child Tax Credit, you may qualify for this additional refundable credit. You must file and use new Schedule 8812, Child Tax Credit, to claim the credit.

4. American Opportunity Credit. If you or someone you support is a student, you might be eligible for this credit. Students in their first four years of postsecondary education may qualify for as much as $2,500 through this partially refundable credit. Even those who owe no tax can get up to $1,000 of the credit as cash back for each eligible student. You must file Form 8863, Education Credits, and submit it with your tax return to claim the credit.

5. Health Coverage Tax Credit. If you’re receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation, you may be eligible for a 2012 Health Coverage Tax Credit. Spouses and dependents may also be eligible. If you’re eligible, you can receive a 72.5 percent tax credit on payments you made for qualified health insurance premiums.

Want more information about filing requirements and tax credits? Visit IRS.gov.

Additional IRS Resources:

Interactive Tax Assistant
EITC Assistant
Publication 596, Earned Income Credit
Schedule 8812, Child Tax Credit
Publication 972, Child Tax Credit
Form 8863, Education Credits
Publication 970, Tax Benefits for Education
Health Coverage Tax Credit

IRS TAX TIP 2013-01: Who Should File a 2012 Tax Return?

IRS Special Edition Tax Tip 2013-03: Check Your Eligibility for the Earned Income Tax Credit

noreply@blogger.com (Unknown) — Fri, 25 Jan 2013 16:19:00 +0000

IRS Special Edition Tax Tip 2013-03: Check Your Eligibility for the Earned Income Tax Credit

Special Edition Tax Tip 2013-01: IRS Plans Jan. 30 Tax Season Opening For 1040 Filers

noreply@blogger.com (Unknown) — Wed, 09 Jan 2013 19:35:00 +0000

Special Edition Tax Tip 2013-01: IRS Plans Jan. 30 Tax Season Opening For 1040 Filers

Monthly Client Newsletter | January 2013

noreply@blogger.com (Unknown) — Tue, 08 Jan 2013 02:34:00 +0000

Monthly Client Newsletter | January 2013

L ast year's intense last minute debate out of Washington focused on an extension of the Social Security tax cut into 2012. Would this year be any more calm? Would 2012 tax laws be locked in place before the end of the tax year? What is going to happen to tax laws in 2013? Long gone are the days when taxes were a simple calculation to ensure there was enough revenue to cover the desired federal programs. Now it seems each section of the code is a political and/or social statement. While our leaders continue to grapple with answers, here are some things to consider to make your situation a little better.

Breaking News: The AMT Patch Gets Permanently Mended

The Alternative Minimum Tax (AMT) is a classic example of the problem we face when Washington D.C. passes temporary tax legislation. For the past ten plus years, our legislators have passed bills that extend a patch to this parallel income tax calculation within our tax code. In the wee hours of January 1st, 2013 a permanent fix to the AMT was passed by Congress. This change impacts 2012 tax returns.

Background of AMT

The AMT is a separate income tax calculation that adds back several common deductions to your taxable income AND then applies a separate tax rate to this adjusted income. You must pay either your normal income tax OR the AMT tax, whichever is higher. The AMT calculation was originally intended to ensure the wealthiest Americans pay a minimum percent of income in federal taxes. But over time, because it is not adjusted for inflation, the AMT has come to snare middle-income taxpayers. Ironically, the wealthiest are no longer impacted by AMT as normal income tax rates are higher than the AMT rates of 26% or 28%. Without the Congressional action on January 1st it was estimated that over 20 million more people would be subject to the AMT in 2012.

What is happening now?

Rather than overhaul the Alternative Minimum Tax, Congress typically elects to raise the exemption level each year to keep the vast middle class from being impacted. The bill being signed into law does two things:

It raises the AMT exemption amounts retroactively for 2012. This effectively patches the tax code and keeps the tax surprise from hitting the 20+ million additional taxpayers.
It makes the patch permanent and the exemption thresholds are automatically adjusted for inflation.

NEW 2012 Law

Filing Status

Single/HOH

Married/Joint

Married Separate

AMT exemption

$50,600

$78,750

$39,375

Income phase-out

112,500

314,900

150,000

465,000

75,000

232,500

Old Law (2011-2012)

	2011			2012
Filing status	Single/HOH	Married/Joint	Married/Sep.	Single/HOH	Married/Joint	Married/Sep.
Exemption	$48,450	$74,450	$37,225	$33,750	$45,000	$22,500
Income phase-out	112,500 - 306,300	150,000 - 447,800	75,000 - 223,900	112,500 - 247,500	150,000 - 330,000	75,000 - 165,000

	The Exemption amounts are a level of income that is excluded from the AMT calculation. Amounts above the exemption are subject to a static 26% AMT tax rate. AMT adjusted income in excess of $175,000 is subject to a flat 28%.
	Notice there is a significant Marriage penalty in the AMT calculation.
	The top marginal income tax rate in 2012 is 35%. This rate is going to 39.6% in 2013. That is why the AMT no longer impacts most wealthy taxpayers.
	Some of the main add-backs to your regular income for the separate AMT calculation are: state & local taxes paid, mortgage interest on home equity debt, miscellaneous expenses, medical expenses, net operating loses and investment expenses.

What does this mean?

Millions of Americans can breathe a collective sigh of relief that the AMT tax surprise will not be a surprise to them when filing their taxes this year.

Do You Have Your Health Insurance?

Time to be thinking about health insurance

The health care legislation commonly known as Obama Care has many provisions that are being implemented over a number of years. As we start 2013, it is wise to once again review the major changes impacting individuals for this year and next.
2013

Income for those earning more than $200,000 unmarried or $250,000 married filing joint will be subject to a .9% additional Medicare tax. The normal 1.45% employee Medicare tax will increase to 2.35%.
In addition, if you have unearned income above the $200,000 single ($250,000 married filing joint) it could be subject to a 3.8% Medicare tax. Unearned income includes dividends, annuities, rent, royalties, interest and many capital gains.

2014
Everyone will be required to have health insurance. If you do not, you will be subject to a tax penalty. The penalty will commence on January 1, 2014. The initial penalty will be $95 per individual, $285 per family or 1% of your income whichever is greater. There is also a potential penalty to employers who fail to offer employees health care insurance.

Here is what you should know.

Additional Medicare Taxes

	How does your employer know? It is very possible that neither you nor your spouse will individually surpass the payroll threshold of $250,000 to have your employer pull out the additional tax for Medicare. But added together you may need to pay this new tax. If this happens to you, be prepared to pay additional Mediare tax on next year's 1040.
	Late payment penalties? In all likelihood there will not be penalties for under withholding to account for this additional Medicare tax. If you are concerned, consider adjusting your payroll withholdings to account for this tax change.

Health Care Requirement

	Every state is required to have an insurance exchange. This exchange is to be a place where everyone can view health insurance options. It will allow individuals and small businesses a place to compare and shop for qualified insurance programs.
	No pre-existing condition limitation. You can no longer be refused insurance coverage because of a pre-existing condition or be charged an incremental premium based on health or gender.
	Buy or pay the penalty? Hopefully, not many will be faced with this dilemma. Why? Part of the health insurance bill is the requirement for most small businesses to offer a qualified health insurance plan. There are other exceptions to the penalty. If you have to spend more than 8% of your household income on the cheapest health care insurance premiums there is no penalty. There will be subsidies if you cannot afford health care insurance. This will be in the form of an advance tax credit if your household income is between 100 and 400 percent of the federal poverty level.
	Start looking now. If you will need to get health care insurance or face a fine, shop for alternatives as soon as possible. With proper planning you should be able to avoid the unpleasant task of facing a tax penalty in 2014.

Office School Supplies

noreply@blogger.com (Unknown) — Tue, 01 Jan 2013 20:45:00 +0000

Making for a Financially Sane Holiday

noreply@blogger.com (Unknown) — Mon, 17 Dec 2012 20:42:00 +0000

Monthly Client Newsletter | December 2012

If a nickel was paid for each time the term "fiscal cliff" was used in the past 60 days we would all be wealthy. The irony of the "cliff" is that it will remain in place no matter what. The politicians are simply trying to decide WHO will drive over it and WHEN. The fact of the matter is there are a number of pre-scheduled tax changes that take place beginning January 1, 2013. Please review the check-list provided here to take advantage of any last minute moves that make sense for your situation. All this and some financially smart ideas on controlling your holiday spending plus new mileage rates for 2013 round out this month's newsletter.

Making for a Financially Sane Holiday

For the past 27 years the American Research Group has conducted interviews with Americans to assess planned holiday spending. This year, the average amount of estimated spending for holiday gifts is $854, up a whopping 32% versus last year! They also found:

	40% plan to purchase from catalogs (direct marketers)
	45% plan to purchase from the internet
	54% plan to wait for sales
	40% already started shopping by November 14^th

So are you like these fellow Americans? What can you do to ensure your spending does not spiral out of control? Here are some ideas.

	Set a limit. Decide what you can afford to spend and stick to it. Perhaps you can provide an incentive for yourself with any amounts you save under your spending limit.
	Do the Santa thing. Perhaps Santa got it right when he "makes a list and checks it twice". Your list can be your working tool to try to stay on budget.
	Avoid the impulse. A side benefit of making the list is to tie your budget to the items on your list. This matching of budget and list will ensure your spending goal is attainable.
	Leave the plastic behind. A simple spending control idea is to go to the stores with the funds you are willing to spend. So consider leaving the credit cards at home. Remember your gifts are for family and friends....not the shareholders of some large bank earning interest paid by you.
	Compare, compare, compare. The internet is a great tool to find the right item at the right price. Even if you don't plan to buy the item over the internet, you can comparison shop retail locations without making the drive. If you do make an internet purchase, don't forget to factor in shipping costs.
	Consider something other than "things". One of the best gifts today is the gift of time. Perhaps it is babysitting or doing chores for a friend. Consider a hand-made craft or edible goodie. The gift of love is too often replaced by merchandise from a store.
	Save to spend. While it may be too late for this year, consider setting next year's budget based on this year's experience. Then set up a special savings account for next year and start funding it. This can readily reduce your spending stress next year.
	Do the Santa thing II. One of the nicest gifts one can give is to reintroduce the "giving" nature of Santa. The mall Santa has long lost this idea in place of getting your little one to tell Santa what gifts they want to "get". Consider purchasing a gift for Toy-for-Tots or other charity and then have your child/grandchild give the gift to the mall Santa for delivery. This little idea can plant the seed for our future generation that consumption should not be the central theme of the holidays. Plus your little one has the joy of knowing they personally helped Santa!

Year-end Tax Moves

Costco recently announces a special $7 per share dividend payable in December

Legendary basketball coach Bob Knight sells his NCAA championship rings

These are just two examples of moves that are occurring because of imminent changes in the tax code that will occur at the end of this month. While Congress wrestles with what they will do, the rest of us are running out of time to take action prior to yearend. While the tax code changes are vast, a few of them require immediate planning.
1. Dividends are getting a tax increase.A big tax increase. They will go from capital gains tax rates (0 to 15%) to ordinary income tax rates (10% to 39.6%). Plus there is a potential bonus Medicare tax of 3.8% if your income exceeds $200,000 single and $250,000 married.

Action to take:

If you are a shareholder in a small C corporation, consider taking dividends now. It could save a tremendous amount of federal tax versus 2013 and beyond.

2. Capital Gains tax rates are increasing as well.The maximum long-term capital gains tax rates are scheduled to increase 33% from 15% to 20% unless Congress acts.

Action to take:

	Review your portfolio and consider the appropriateness of taking long-term gains now versus holding the investment. Remember in 2013, these gains might be subject to the 3.8% Medicare surtax as well.
	Consider the possibility of delaying capital losses. These losses can offset capital gains. If capital gains tax rates go up, then the value of these loses next month improves when netted against higher taxed gains.

3. Last minute charitable donations.Now is the time to finalize your charitable donations. Remember you must always have a receipt (cash donations are no longer deductible without one) and only donate non-cash items in good or better condition. Donations of $250 or more also require an acknowledgement from the charitable organization. Also important, in 2013 these same charitable contributions could be subject to itemized deduction phase-out rules for higher income earners.

Action to take:

	Make any last minute donations and collect all applicable receipts.
	Consider making donations this year versus next if your itemized deductions were ever phased out in the past.

4. Don't forget the year-end "basics".Just because there is tremendous uncertainty in the tax code, don't forego the normal discipline of review prior to December 31st. Spend a minute going over the following list.

Action to take now

	Take your Required Minimum Distribution from retirement accounts if over the age of 70 ½.
	Rebalance your investment portfolios as necessary
	Review any medical and dependent care spending accounts to ensure you do not lose any unspent funds
	Make contributions to your retirement savings accounts, especially if you are self-employed
	Consider last minute retirement conversions if appropriate
	Consider donating appreciated stock versus writing a check to a favorite charity
	Estimate your tax liability and make any required estimated tax payments
	Make any final gift payments while being aware of the annual gift giving limits
	Start collecting and organizing your tax records

While there are many scheduled changes and much uncertainty, none of us has a crystal ball. Hopefully, Congress will act to help provide clarity sooner versus later. In the meantime, should you have any questions or concerns please feel free to call.

A Charitable Giving Surprise

You may be creating a junk mail bonanza

As year-end approaches the mailbox begins to fill with last minute appeals from various charities.Little did you realize that much of these last minute appeals are the harvest of seeds you planted much earlier.

What is happening?

Charitable organizations are usually exempt from junk mail and unwanted solicitation laws. When you donate money to a charitable organization, they generally resell your information to other non-profits to allow them to solicit to you as well. You soon become an "easy mark", not unlike the technique used by hobo's to mark a building of someone willing to give a hand out.

What can you o?

So how does a bleeding heart avoid being bled to death? Here are some suggestions.

	Be selective. Create a budget and limit your target list of worthy charities. Say no to anyone not on your list this year. This will dramatically decrease your junk mail and unwanted emails/phone calls.
	Give to Quality. There are a number of web sites that rank charities for their quality and effective use of donations. Here are a couple of the more popular: CharityWatch Charity Rating Guide www.charitywatch.org and www.charitynavigator.org.
	Opt out. When you send a check or other donation, request that your name not be resold or given to any other organizations. Most charities will honor your request.
	Create a blind mark. Want to know which charities are the worst junk proliferators? Blind mark your name with a fake middle initial or surname. Keep track of who you gave the blind mark to and then you'll know which charities are renting your name based on seeing this code on future solicitations.
	Contact your current charities. Tell them to stop sending you correspondence. Tell them they will still get their money and they can save on mailing expenses. If the charity ignores your request, warn them that perhaps a more efficient charity can make better use of your giving.
	Reduce the appeals. While non-profits are exempt from using "do not call" and "do not mail" lists, many do adhere to the requests. Here are some of the major resources to help reduce the solicitations. National "Do Not Call" list. www.donotcall.gov Contact DMA (Direct Marketing Association) Mail Preference Service Direct Marketing Association; PO Box 643, Carmel, NY 10512 OR for telemarketing: Telephone Preference Service Direct Marketing Association, PO Box 1559, Carmel, NY 10512
	Be mindful of fraud. Never give money over the phone. Get information about the organization, conduct your own research, and then give a donation. Often phone donations are less efficient for the non-profit because the telemarketing firm takes a percentage of the amount you give.
	Get their name technique. When an unsolicited telephone call or junk mail is received, tell the organization to take you off their list. But thank them, because you only had a small amount left available to give to a few charities and by receiving their unsolicited marketing you can now eliminate them from your giving list this year.

There is a tale about a little girl on a beach full of thousands upon thousands of trapped and floundering minnows. An old gentleman approaches the little girl and says, "What are you doing? You can't possibly save all these minnows!" "You're right.", The little girl says, as she throws another minnow back in the water. "But I sure made a difference for that one."
By taking control of your giving you not only reduce unwanted solicitations, your money will also be more efficiently spent on causes you care about.

IRS Summertime Tax Tip 2012-16: Organizing Tax Records This Summer Can Help You Keep Your Cool

noreply@blogger.com (Unknown) — Fri, 10 Aug 2012 14:52:00 +0000

IRS Summertime Tax Tip 2012-16: Organizing Tax Records This Summer Can Help You Keep Your Cool

Organizing Tax Records This Summer Can Help You Keep Your Cool

If the sweltering dog days of summer aren’t incentive enough to get out of the sun for awhile, the IRS suggests another reason to head indoors: organizing your tax records. Devoting some time mid-year to putting your tax-related documents in order may not only keep you out of the sun, but it should also make it easier for you to prepare your tax return when the filing season arrives.

Here are some things the IRS wants individuals and small business owners to know about recordkeeping.

What to keep – Individuals. In most cases, keep records that support items on your tax return for at least three years after that tax return has been filed. Examples include bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks or other proof of payment and any other records to support deductions or credits claimed. You should typically keep records relating to property at least three years after you’ve sold or otherwise disposed of the property. Examples include a home purchase or improvement, stocks and other investments, Individual Retirement Account transactions and rental property records.
What to keep – Small Business Owners. Typically, keep all your employment tax records for at least four years after the tax becomes due or is paid, whichever is later. Also, keep records documenting gross receipts, proof of purchases, expenses and assets. Examples include cash register tapes, bank deposit slips, receipt books, purchase and sales invoices, credit card charges and sales slips, Forms 1099-MISC, canceled checks, account statements, petty cash slips and real estate closing statements. Electronic records can include databases, saved files, e-mails, instant messages, faxes and voice messages.
How to keep them - Although the IRS generally does not require you to keep your records in any special manner, having a designated place for tax documents and receipts is a good idea. It will make preparing your return easier, and it may also remind you of relevant transactions. Good recordkeeping will also help you prepare a response if you receive an IRS notice or need to substantiate items on your return if you are selected for an audit.

For more information on recordkeeping for individuals, check out Chapter 1, “Filing Information,“ in IRS Publication 17, Your Federal Income Tax. Find small business recordkeeping information in IRS Publication 583, Starting a Business and Keeping Records. Both publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676). Also available are new video and audio files explaining recordkeeping requirements in detail, located on our IRS video portal at www.irsvideos.gov.

IRS Summertime Tax Tip 2012-13: Eleven Tips for Taxpayers Who Owe Money to the IRS

noreply@blogger.com (Unknown) — Fri, 03 Aug 2012 17:54:00 +0000

Eleven Tips for Taxpayers Who Owe Money to the IRS

Most taxpayers get a refund from the Internal Revenue Service when they file their tax returns. For those who don’t get a refund, the IRS offers several options to pay their tax bill.

Here are eleven tips for taxpayers who owe money to the IRS.

1. Tax bill payments If you get a bill from the IRS this summer that shows you owe late taxes, you are expected to promptly pay the tax owed including any penalties and interest. If you are unable to pay the amount due, it may be better for you to get a loan to pay the bill in full rather than to make installment payments to the IRS. That's because the interest rate and penalties the IRS must charge by law are often higher than what lending institutions may be offering.

2. Electronic Funds Transfer You can pay your tax bill by electronic funds transfer, check, money order, cashier’s check or cash. To pay using electronic funds transfer, use the Electronic Federal Tax Payment System by either calling 800-555-4477 or using the online access at www.eftps.gov.

3. Credit card payments You can pay your bill with a credit card. Again, the interest rate on a credit card may be lower than the combination of interest and penalties the IRS must charge. To pay by credit card contact one of the following processing companies:

– WorldPay US, Inc. at 888-9PAY-TAX (orwww.payUSAtax.com),

– Official Payments Corporation at 888-UPAY-TAX (orwww.officialpayments.com/fed), or

– Link2Gov Corporation at 888-PAY-1040 (orwww.pay1040.com).

4. Additional time to pay Based on your circumstances, you may be granted a short additional time to pay your tax in full. A brief additional amount of time to pay can be requested through the Online Payment Agreement application at IRS.gov or by calling 800-829-1040. There generally is no set up fee for a short-term agreement.

5. Installment Agreement You may request an installment agreement if you cannot pay the total tax you owe in full. This is an agreement between you and the IRS to pay the amount due in monthly installment payments. You must first file all required returns and be current with estimated tax payments.

6. Apply Using Form 9465 You can complete and mail an IRS Form 9465, Installment Agreement Request, along with your bill using the envelope you received from the IRS. The IRS will inform you (usually within 30 days) whether your request is approved, denied, or if additional information is needed.

7. Apply Using Online Payment Agreement If you owe $50,000 or less in combined tax, penalties and interest, you can request an installment agreement using the Online Payment Agreement application at IRS.gov. You may still qualify for an installment agreement if you owe more than $50,000, but you are required to complete a Form 433F, Collection Information Statement, before the IRS will consider an installment agreement.

8. User fees If an installment agreement is approved, a one-time user fee will be charged. The user fee for a new agreement is $105 or $52 for agreements where payments are deducted directly from your bank account. For eligible individuals with lower incomes, the fee can be reduced to $43.

9. Offer in Compromise IRS is now offering more flexible terms with its Offer-in-Compromise (OIC) Program. An OIC is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax debt for less than the full amount owed. An OIC is generally accepted only if the IRS believes, after assessing the taxpayer's financial situation, that the tax debt can't be paid in full as a lump sum or through a payment agreement.

10. Check withholding Taxpayers who have a balance due may want to consider changing their Form W-4, Employee’s Withholding Allowance Certificate, with their employer.

11. Fresh Start The IRS has a program to help struggling taxpayers get a fresh start. Through the Fresh Start program, individuals and small businesses may be able to pay the taxes they owe without facing additional or unnecessary burden.

For more information about payment options or IRS's Fresh Start program, visit IRS.gov. IRS Publications 594, The IRS Collection Process, and 966, Electronic Choices to Pay All Your Federal Taxes, also provide additional information regarding your payment options. These publications and Forms 9465 and W-4 can be obtained from IRS.gov or by calling 800-TAX-FORM (800-829-3676).

IRS Summertime Tax Tip 2012-13: Eleven Tips for Taxpayers Who Owe Money to the IRS

IRS Summertime Tax Tip 2012-11: IRS Can Help When Starting a Small Business

noreply@blogger.com (Unknown) — Mon, 30 Jul 2012 13:30:00 +0000

IRS Can Help When Starting a Small Business

If you are opening a new business this summer, the IRS has some basic federal tax information to help you get started.

Here are some things to consider when starting a business:

Type of Business One of the first decisions you need to make is what type of business you are going to establish. The most common types of businesses are sole proprietorship, partnership, corporation, S corporation, and Limited Liability Company. The type of business you establish determines which tax forms you will need to file.
Types of Taxes The type of business you operate also determines what types of taxes you will pay and how you will pay them. The four general types of business taxes are income tax, self-employment tax, employment tax and excise tax.
Employer Identification Number A business typically needs to get an Employer Identification Number to use as an identifier for tax purposes. Check IRS.gov to find out whether you will need this number, and, if so, you can apply for an EIN online.
Recordkeeping Good records will help you keep track of deductible expenses, prepare your tax returns and support items that you report on your tax returns. Good records will also help you monitor the progress of your business and prepare your financial statements. You may choose any recordkeeping system that clearly shows your income and expenses.
Tax Year Every business taxpayer must figure taxable income on an annual basis called a tax year. Your tax year can be either a calendar year or a fiscal year.
Accounting Method Each taxpayer must also use a consistent accounting method, which is a set of rules for determining when to report income and expenses. The most commonly used accounting methods are the cash method and accrual method. Under the cash method, you generally report income in the tax year you receive it and deduct expenses in the tax year you pay them. Under an accrual method, you generally report income in the tax year you earn it and deduct expenses in the tax year you incur them.

Visit the IRS.gov website and click on the ‘Businesses’ tab for more information and resources, including a special section on starting a business.

IRS Summertime Tax Tip 2012-11: IRS Can Help When Starting a Small Business

Deducting Job Hunting Expenses

noreply@blogger.com (Unknown) — Sat, 07 Jul 2012 20:28:00 +0000

Deducting Job Hunting Expenses

If you are searching for a new job in your present line of work, the following expenses are usually deductible even if you don't end up with the job:
	Costs to prepare resumes and letters including typing, stationery and postage.
	Fees paid to employment agencies, recruiters, and consultants
	Transportation to interviews including out-of-town lodging
	Meals while out-of-town for interviews or entertainment related to the job hunt are deductible at 50%
	In-town and long distance telephone/cell phone bills

Remember however, that these expenses combined with other miscellaneous deductions are subject to reduction equal to 2% of your adjusted gross income.

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CAPBT News Digests Blog

IRS Health Care Tax Tip 2013-01: IRS Website Explains Tax Provisions of the Health Care Law

IRS Summertime Tax Tip 2013-14: Eight Tips for Taxpayers Who Owe Taxes

Issue Number: IRS Summertime Tax Tip 2013-14

Inside This Issue

Bookkeeping Software

Tax Preparation

Gift Certificates and Cards

Back to School Supply

The Chances of Being Audited

The Chances of Being Audited

A Dozen Tax Planning Triggers

A Dozen Tax Planning Triggers

Book Store

Where's My Refund? 2013 Edition

Where's My Refund? 2013 Edition

IRS TAX TIP 2013-01: Who Should File a 2012 Tax Return?

Issue Number: IRS TAX TIP 2013-01

Inside This Issue

IRS Special Edition Tax Tip 2013-03: Check Your Eligibility for the Earned Income Tax Credit

Special Edition Tax Tip 2013-01: IRS Plans Jan. 30 Tax Season Opening For 1040 Filers

Monthly Client Newsletter | January 2013

Monthly Client Newsletter | January 2013

Contents

Check Your 2013 Pay Stub

Breaking News: The AMT Patch Gets Permanently Mended

Do You Have Your Health Insurance?

Office School Supplies

Making for a Financially Sane Holiday

Monthly Client Newsletter | December 2012

Contents

Making for a Financially Sane Holiday

Year-end Tax Moves

New 2013 Mileage Rates Announced

2013 Mileage Rates

2012 Mileage Rates

A Charitable Giving Surprise

IRS Summertime Tax Tip 2012-16: Organizing Tax Records This Summer Can Help You Keep Your Cool

IRS Summertime Tax Tip 2012-13: Eleven Tips for Taxpayers Who Owe Money to the IRS

IRS Summertime Tax Tip 2012-11: IRS Can Help When Starting a Small Business

Deducting Job Hunting Expenses

Deducting Job Hunting Expenses