FICA Wage Base Increased for 2013

We will provide you with a series of tax increases for 2013. These are low profile increases that cost you more in tax.
The FICA (social security) wage based increased in 2013 to $113,700.00. This means that if your wages are equal or greater than the base amount, you will pay an additional $223.20 in tax. This is a change in limit and not a tax rate increase but it will cost you more in tax? Sounds like a tax increase to me!

Back from the future

Back from the future with insight of new tax issues that are beginning to surface. The new taxes that you will be paying have been like a virus, just dormant until now.
We just attended the IRS forum in Atlanta Georgia to determine what approach the IRS will take in an effort to raise additional tax. We also learned of a new home office EZ deduction available for 2013.
Be sure to follow our blog and other media accounts to pay the least amount of tax with IRS approved deductions.

Cell Phones are a Tax Free Fringe

If an employer provides a cell phone for business reasons, the employee will not be taxed on the business or personal use of the phone. The employee will not have to keep a log of the business and personal calls.
Small business may want to provide cell phone to their spouse or children if they work for the company.
The same theory applies to health insurance assuming an employee/employer relation exist.

Hello to Leslie at the Bruce S concert.

Another Tax Form to Track Income

For 2011, credit and debit card companies will begin to issue 1099K forms on payments to merchants, and third party networks such as PayPal.
The IRS will begin matching the income on the tax return to spot discrepancies and under reporting.
We always appreciate the IRS helping us keep accurate records. At some point in the future, the IRS will already have your taxable information and will just send you a bill for the tax you owe!

Accounting Position Available

We are recruiting for one of our clients for an accounting position. This position is for a full charge general ledger person with extensive knowledge of Peachtree Accounting software. This is a full time position and salary will be based on experience.
Please fax a resume to 678-216-0617 or email danny@ptfs.biz.

Unemployment Compensation

Due to the second depression, many people still cannot find employment. So, you apply for unemployment compensation. This must be included in your income and it is TAXABLE.
You can have federal and state withholding taken out of the check.

New Business Mileage Rates

IRS has announced an increase in the optional mileage rates for the final six months of 2011.
Business rate is now 55.5 per mile;
23.5 for medical;
14 for charitable.
This is due to the higher gas prices - thank you IRS.

Business Meals and Entertainment Expenses

To deduct these expenses, the IRS indicates the taxpayer must establish that the expense was "ordinary and necessary" in carrying on the trade or business.
To substantiate the expense, the following information is necessary (1) The amount and description of each expense (2) the time and place (3) the business purpose of the activity and any business benefit (4) the nature of the business discussion (5)the business relationship to the person.

WOW - who is doing that?

I believe that the requirements would be met by retaining your receipt (1 and 2)and on the back write the purpose and benefit and the nature of the discussion and the business relationship (3,4,&5).
Attach these receipts to an expense report or a statement which should substantiate the expense.

Thanks Julie.

Home Buyer Credit News

Eligible taxpayers who contracted to buy a home qualifying for the first-time homebuyer credit before the end of April now have until September 30, 2010 to close the deal according to the Internal Revenue Service.
This is a change from the June 30 closing date.
Hello to L in Hawaii. Don't forget Dukes on Sunday.

Tax Deduction for Your Gambling Losses

Yes, you can deduct your gaming losses against your gaming winnings. You must be able to itemize your deductions on schedule A. So keep up with the proof of losses so when you win, you can reduce the taxable income up to the losses.

Energy Tax Credit for Homeowners

Homeowners that make energy efficient improvements to their existing home may qualify for a tax credit of up to 30 percent of the cost of all qualifying improvements with a limit to $1,500.
The credit applies to improvements such as adding insulation, energy efficient exterior windows and energy efficient heating and air conditioning systems.

Tax Return Due Date - April 15th 2010

Individual income tax returns are due by April 15, 2010.
If you are unable to make that deadline, you can file for an automatic extension. You need to estimate any tax due and pay it with the extension. The extension is for additional time to file - not to pay. You will have until October 15, 2010 to file the tax return. If there is additional tax due, interest and penalties could apply.

Online scams that Impersonate the IRS

Scams involving the impersonation of the IRS usually take the form of e-mails, tweets or other online messages to consumers. Scammers may also use phones and faxes to reach intended victims. Scammers also set up phony web sites that appear to be IRS sites.
Generally, the IRS does not send unsolicited e-mails to taxpayers or request security information. Beware of any attachments - do not open.

How Long Should You Keep Tax Records

If you can scan and store your tax return and support in cyber space, then keep them forever.
Otherwise it appears that if you file and pay your tax and none of the following situations apply, 3 years should be good.
If you did not file a tax return or filed a fraudulent tax return then there is no limit.
If you file for a claim for a loss of worthless securities or have an understatement of income of more than 25% on the tax return or file for a claim for a credit or refund after you filed your tax return, then we recommend that you keep the information for at least 10 years.

Small Business Employment Tax Audits

For the last couple of years, the IRS has increased the number of employment tax audits each year. It appears that they are increasing the number of audits for 2010.
In September of 2009, the IRS was training thousands of new auditors, so I guess the training is over. Get ready.
The areas that will be reviewed is the old argument of independent contractor v/s employee. Also we see a push to review compliance for small business corporations that include shareholder salaries.
The IRS needs more revenue, so make sure you are getting good tax planning.

Free Tax return filing with IRS

The IRS is providing a link to a group of private software companies for you to file the 2009 tax return for free. http://www.irs.gov/
With the free file option you can file any hour of the day or night and generally receive your refund within 10 days with direct deposit.
Do not forget your state tax return. There is a charge for the state tax return depending the company you select.
This may not be for everyone. It seems a bit like the wolf in sheeps clothing???

Home Foreclosure and Debt Cancellation 1099C

The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence.
This provision applies to debt forgiven in calendar years 2007 through 2012.

Tax deduction for Haiti relief donations

Taxpayers who itemize deductions on their 2009 tax return qualify for a special tax relief provision for the contribution until March 1, 2010. This includes text, check, or credit card.
See IRS.gov for qualified charities and other limits.

Home Buyer Credit News

Form 5405 has been changed by the IRS to help prevent the bogus claims for the home buyer credit. The tax return cannot be E-filed and must have documentation attached. Based on the paper filing, the refunds will take longer.

Social media connection

Hello from everyone at Peachtree Financial Services. We provide tax and accounting services. We also serve as business consultants to our clients. We are glad to be apart of the social media network.