by Leif Jensen | Mar 7, 2011 | General |
IRS interest rates will be rising by a percentage point as of April 1, 2011. On overdue taxes, IRS will charge 4% for individuals. The rate will be 6% on corporations that owe more than $100,000. On refunds, IRS will pay 4% to individuals and 3% to corporations. For...
by Leif Jensen | Mar 7, 2011 | General |
As more people owe more money in back taxes. The IRS is raising the dollar threshold from $5,000 to $10,000 before filing a tax lien for unpaid taxes. IRS will also withdraw more tax liens once the tax debts are repaid. This could help debtors’ credit ratings because...
by Leif Jensen | Mar 7, 2011 | General |
The Social Security wage base proposal for 2012 is $110,100,up $3,300. The current two-percentage-point cut in the employees’ share of Social Security tax is set to lapse after 2011, so rates will return to 7.65% on employers and employees. Government estimates for...
by Leif Jensen | Mar 7, 2011 | General |
IRS Notice 2011-14 Funds paid on behalf of financially struggling homeowners under both federal and state assistance programs to prevent foreclosure and stabilize the housing market are exclude-able from income. 1099’s need not be issued.
by Leif Jensen | Mar 7, 2011 | General |
I was meeting with three clients the other day. One makes enough to cover just basic expenses, the next has a mid-level salary, the third is an entrepreneur made more the the other two combined. They all have very liberal leanings. The entrepreneur will owe money...
by Leif Jensen | Mar 7, 2011 | General |
Although these expenses may be related to her job, expenses that are inherently personal are nondeductible personal expenses. A television morning news anchor cannot deduct the cost of her business clothing that she wore only on TV, the Tax Court says, even though she...
by Leif Jensen | Feb 28, 2011 | General |
Yesterday I was picking up a couple of gift certificates for a Not-for-Profit. They had a new credit card machine and were having difficulties with the machine and processing my payment. While this was happening I was stating that this could have a devastating...
by Leif Jensen | Feb 28, 2011 | General |
One of the things clients often ask me when we first meet is whether I am familiar with their particular industry. Even if I am familiar with their business, I inform them that this is not the most important consideration in a client/CPA relationship. The most...
by Leif Jensen | Feb 21, 2011 | General |
As the tax season progresses and I talk to more clients, I am finding that more and more people are not saving anything. Those that are saving are only making minimum payments to their 401K plans and little to nothing else. It seems we are feeling trapped and cannot...
by Leif Jensen | Feb 20, 2011 | General |
The Affordable Care Act’s reporting requirement for the reporting of medical insurance costs on W-2’s has been delayed until 2012. After that I have some predictions of what may come next. Now, it is my belief that once this reporting is under way the benefits will...
by Leif Jensen | Feb 14, 2011 | General |
IRS has announced a new limited amnesty program for secret foreign accounts. The program will allow taxpayers to pay penalties and avoid jail time. The penalties are 25% of foreign account assets, not the 20% of the prior amnesty. The program applies all years since...
by Leif Jensen | Feb 8, 2011 | General |
As the tax season progresses for small business owners, I want to remind them to monitor their ‘basis” in their businesses. Basis is the initial investment, plus any subsequent investments and profits; minus distributions and losses. Owners need to maintain a...
by Leif Jensen | Jan 30, 2011 | General |
The IRS is imposing Revenue Ruling 74-44 very aggressively. Revenue Ruling 74-44 basically states that an S Corporation owner must take reasonable compensation subject to payroll taxes and not dividends. There was a recent case of a CPA who took $24,000 as income and...
by Leif Jensen | Jan 12, 2011 | General |
Well, we got what we asked for. Pat Quinn campaigned on the basis of an Illinois income tax increase and he delivered on his campaign promise. Never mind that the initial talks were for a temporary 33% increase. Much too low! But our valiant politicians fought to...
by Leif Jensen | Jan 10, 2011 | General |
Over 7.5MM returns for 2008 were nontaxable. So 15.6% of all filers did not have to pay any federal income taxes. Over 3MM returns or over 6% of the population had taxable income of under $20,000. Total returns for 2008 were $48,167,224 per the IRS...
by Leif Jensen | Jan 9, 2011 | General |
Since Congress dragged their feet on the final approval in late 2010 of the 2010 tax rules, this has delayed the IRS. So the IRS is still working on reprogramming their computers. The IRS estimates that they will be unable to accept returns that itemize deductions...
by Leif Jensen | Jan 9, 2011 | General |
Congress is seriously considering the elimination the mortgage interest deduction on individual returns (Schedule A). This would be the first step in the elimination of the Alternative Minimum Tax (AMT); kind of sort of. Without the mortgage interest deduction most...
by Leif Jensen | Dec 11, 2010 | General |
To whom it may concern, the recently passed Small Business Jobs Act that was passed earlier this year in September, has a series of interesting new perks which can be greatly used to your advantage. For instance, under the new law, businesses are no longer requiredto...
by Leif Jensen | Oct 15, 2010 | General |
According to data from the IRS for 2008 the bottom 50% of all taxpayers paid a mere 2.7% of the total income tax bill. Many qualify for the earned income credit , so they get refunds of income tax and payroll taxes, instead of having to pay their fair share.
by Leif Jensen | Oct 11, 2010 | General |
Determining basis is importance for a multitude of reasons beyond the IRS investigations. The three most important reasons are: it limits the amount of corporate loss that can be deducted it’s key to determining a gain or loss when stock is disposed of it sets the...
