WhoDoesYourTaxes.com - Professional Tax Services From AB CPA

Year End Tax Spending Ideas....

2009-11-18T12:10:00.000-08:00

Spend in the following areas to help lower your tax bill. Not every strategy here is appropriate for everyone. For help in identifying and utilizing the tax breaks that fit your circumstances, contact AB CPA Tax Services today.

Invest in Your Home
#1: Green Home Improvements…Earn a 30% tax credit for certain energy efficient improvements up to $1,500. Unlimited 30% credit for Solar Improvements.
#2: 1st Time Homebuyer Credit…If you haven’t owned a home during the past 3 years you may be eligible to receive a credit of up to $8,000. Must buy new home by Dec. 1, 2009.

Invest in Your Business
#3: Buy Equipment…Benefit from new expensing rules for 2009. No depreciation required on up to $250,000 of equipment and furniture for your business.
#4: Review Business Investments…Be sure you can use your Partnership and S Corp losses. Do you have enough basis? Contribute capital if needed.
#5: Reward your People…Provide employees with a tax-free benefit (i.e., up to $230 per month for mass transit and van pooling). Consider bonuses to employees / vendors before Dec. 31, 2009.

Invest in Your Community
#6: Give and Volunteer…Sell loser stock and giveaway the resulting cash OR simply giveaway appreciated shares. Donate food, books, computer equipment, inventory (cost basis), or clothing. Volunteer and deduct mileage.

Invest in Yourself
#7: Hit the Books / Street…Spend on Education. Deduct up to $2,500 per student. Deduct certain job search expenses (in current line of work).
#8: Buy a Car…Deduct sales tax paid on new cars, light trucks, motor homes and motorcycles.
#9: Save for Retirement…Many options for employed and self employed.

Invest in a Plan
#10: Have a Plan…Strategize your tax bill to make bottom-line sense. Today’s plan will benefit you for years in the future. Consider the following ideas to help save tax dollars by altering your spending & earning patterns. Contact AB CPA today to ensure your plan is up to date!
· Bunch deductible expenditures.
· Consider deferring income.
· Consider a credit card to prepay expenses to generate deductions for this year.
· Do not over pay your taxes. Refunds might be slower due to budgetary considerations.

This blog was prepared to provide you with information about minimizing your taxes. Do not apply this general information to your specific situation without additional details. Be aware that the tax laws contain varying effective dates and numerous limitations and exceptions that cannot be summarized easily. For details and guidance in applying the tax rules to your individual circumstances, please contact AB CPA...

www.whodoesyourtaxes.com

IRS issues top tips for small businesses

2009-07-12T15:47:00.000-07:00

The IRS just published a great summary of new business tax tips - every new business owner should read this to familiarize themselves with the key business tax concepts.

You can find this and other helpful new business tax info by visiting: http://www.irs.gov/newsroom/article/0,,id=172970,00.html

IRS Summertime Tax Tip 2009-02

Anyone starting a new business this summer should be aware of their federal tax responsibilities. Here are the top seven things the IRS wants you to know if you plan on opening a new business this year.

First, you must decide what type of business entity you are going to establish. The type your business takes will determine which tax form you have to file. The most common types of business are the sole proprietorship, partnership, corporation and S corporation.
The type of business you operate determines what taxes you must pay and how you pay them. The four general types of business taxes are income tax, self-employment tax, employment tax and excise tax.
An Employer Identification Number is used to identify a business entity. Generally, businesses need an EIN. Visit IRS.gov for more information about whether you will need an EIN. You can also apply for an EIN online at IRS.gov.
Good records will help you ensure successful operation of your new business. You may choose any recordkeeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes.
Every business taxpayer must figure taxable income on an annual accounting period called a tax year. The calendar year and the fiscal year are the most common tax years used.
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 an 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 Business section of IRS.gov for resources to assist entrepreneurs with starting and operating a new business.

Where are my 1099s?

2009-02-02T09:53:00.000-08:00

Year-End Forms to Arrive Later For Investors ....

Many people will receive their year-end tax statements from their brokerage and investment accounts later than last year.

A law enacted last fall changed the deadline from Jan. 31 to Feb. 15, when brokers, including brokerage firms, mutual fund companies and barter exchanges, must furnish year-end Forms 1099-B to their customers.

If you don't receive your paperwork by late Feb, contact your investment bank immediately.

Don't use the Big Tax Prep Firms

2009-01-15T10:38:00.001-08:00

Here's a link to a great article talking about who does and doesn't need to file a return.

Towards the end there's a paragraph talking about why you should use a CPA....discussing how the "Big" tax prep firms don't really do much more than put numbers in boxes...use a CPA that knows tax law!

http://www.walletpop.com/blog/2009/01/14/a-taxing-economy-even-for-tax-preparation-firms/

First Time Home Buyer Tax Credit is not what it seems...

2009-01-08T18:54:00.001-08:00

In an effort to boost home sales, the IRS is offering a credit for first time home buyers. It's a 10% credit, but the trick here is - the credit must be REPAID over a 15 year period, starting the year after the purchase. So, it's not really a credit---just a 15 year interest free loan. Not so terrible, but that's not fair to call it a credit.

Here's some more info:

Applies to home purchases after April 8, 2008, and before July 1, 2009.
First-time homebuyers and those who have not owned a home in the three years prior to a purchase can qualify for the credit.
The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly.
Only the purchase of a main home located in the United States qualifies. Vacation homes and rental property are not eligible.

Call or email me for a full article or to see how this impacts you!

I"m reading now....

2008-12-15T12:47:00.000-08:00

The E Myth Revisited: Why Most Small Businesses Don't Work and What
to Do About It. By Michael Gerber.

http://books.google.com/books?hl=en&id=gs5LdwXGQBgC&dq=the+e-myth+revisited&printsec=frontcover&source=web&ots=7IUJkD20PG&sig=8hff88IC-UVoS0Gxs-jDDCWNe2M&sa=X&oi=book_result&resnum=4&ct=result#PPA3,M1

Totally worthwhile read for ANY serious business owner.

What to do at Year End - Per the IRS

2008-12-15T12:39:00.000-08:00

The IRS just released a summary on items for year end...take a look at this article if you are interested in some leisure reading...or call me to see if these apply to you!

http://www.irs.gov/newsroom/article/0,,id=201142,00.html

(p.s....snow is falling in all So Cal mountains, finally...I will be at Bear Mountain on weds...)

Year End Tax Tips for Small Businesses

2008-12-10T20:03:00.000-08:00

This is the time of the year where the question I am asked most frequently is - "What should I do at the end of the year"....to sum it up in a few words....

Spend more on deductible items (not debt paydown!)
Collect on fewer receivables. Postpone billing your clients if reasonable.

Keep in mind - debt paydown does not help lower your tax bill. So hold off until January to pay that line of credit down. This month spend in DEDUCTIBLE items such as - employee bonuses or equipment or state taxes. You could postpone thousands in dollars of tax expense by simply spending a little more this December.

Contact me if you have ANY questions about how this applies to your business.

www.WhoDoesYourTaxes.com

A CPA will save you money!

2008-12-03T16:56:00.000-08:00

Hiring a CPA to prepare your tax return could save you thousands of dollars! CPAs are highly trained, often with advanced degrees. Many small tax shops that pop up around tax time provide 6 weeks of training to their staff. Don't trust these people to do your tax return!!!!! I have seen countless poorly prepared returns that cost the tax payer real dollars due to non-proactive tax preparation.