W-2 Assistance

Let us help you with W-2 1099 wage assistance

Skype

Give us a call on Skype.  Our Skype name is maxwoodbury,cpa,llc
No spaces!  Looking forward to hearing from you.

Giving Guidance

If you plan to give to a charity, be sure the group you're donating to is appropriately qualified.  Charitable contributions can be deducted only if you have receipts to back them up.  Guidance is available on the IRS website at http://tinyurl.com/36syn7
 - From the Indianapolis Star in the business section.

Good Merry Christmas?

What did you get for Christmas?  A few things I received were an umbrella, hot sauce, Act Your Wage board game, and deoderant.  Visit our office and we will give you a tax Christmas gift!

The Tax Vox 2011 Lump of Coal Award: Kicking the Can Edition

The Tax Vox 2011 Lump of Coal Award: Kicking the Can Edition

Free Tax Organizers!

Get them soon so you can get your taxes out of the way soon.

For those who do not know what tax organizers include read the following:

Many questions that will help you find and organize all the items you need to pay your taxes.  The organizer asks questions about basic information, itemized deductions(medical expenses, charitable contributions, and more), and a great deal of yes/no questions including "Did your marital status change in 2011?"

Education-Related Credits and Deduction Phaseout

1)American Opportunity Credit - The American Opportunity credit is a modification of the Hope scholarship credit for tax years beginning after December 31, 2008, but before January 1, 2013.  The credit amount is the sum of 100 percent of the first $2,000 of qualified tuition and related expenses, for a total maximum credit of $2,500 per eligible student per year.  The credit is available for the first four years of a student's post-secondary education.
2)Hope Scholarship Credit - For tax years other than 2009, 2010, 2011, and 2012, the Hope scholarship credit amount per eligible student is equal to 100 percent of the first $1,000 of qualified tuition expenses and 50 percent of the second $1,000 of qualified tuition paid during the year, indexed for inflation.
3)Lifetime Learning Credit - The lifetime learning credit is equal to 20 percent of the amount of qualified tuition expenses paid on the first $10,000 of tuition, an amount which is not inflation adjusted...The phaseout of the credits begins for single taxpayers in 2011 when modified AGI reaches $51,000 and completely phases out when modified AGI reaches $61,000.  For joint filers, the phaseout range is $102,000 to $122,000 in 2011.
4)Deduction for Education Expenses - This deduction will not apply to tax years beginning after 2011.
Source: 2012 U.S. Master Tax Guide, Paragraph's 1082 & 1303

Egg Nog Milkshake

Come to the office today for a free Egg Nog Milkshake from Steak N Shake if we can do your tax return this year!!

Put you accounting coat on...

We can warm up your numbers to get them ready for the end of the year!  Come on in and get warm.

Tax Questions?

  2048 North U.S. 31
  Right behind Steak N' Shake
  Visit us, so we may help you this Christmas Season!

How can you reduce your AGI?

      Tax-Free Income
Tax-Free bond interest
Tax-Free insurance proceeds
Gifts
Inheritances
Social Security(Tax-Free portion)
     AGI Deductions
Loss from small business -
(Do not create a loss so you don't have to pay taxes.  Run a business to make a profit)
Deductible contributions to an IRA
Contribution to pension plan of an S corporation
Alimony payments
Premature withdrawal penalty from CDs
Deductions from real estate investments

Merry Christmas!

We at Max Woodbury, CPA, LLC wish you a Merry Christmas!!

Sign is fixed!!!

The problem was the temperature gauge was broke which affected the time.  Christian and I(Max III) got up on a latter, opened the sign up and pulled out the temperature gauge.  The correct time is displayed now!!  Thank you Christian for letting us use your ladder and screw driver.

Working on the Sign

Today we are working on our sign.  The time and temperature have been wrong.

Happy Thanksgiving

Come on in to our office for a Thanksgiving treat!

Elements of a Valid Contract

1. An agreement consisting of an offer and acceptance 
1. not valid offers
1. expression of opinion
2. preliminary negotiations
3. statement of intentions
4. advertisements
5. social invitation
2. exceptions of silence as exception
1. silence condition of acceptance & offeree remains silent intending to accept.
2. Previous dealings - silence was acceptance
3. exercise dominion over the goods sold
2. Consideration
1. Bargained for exchange
1. must be a legal detriment
1. when one refrains from doing what one has a legal right to do. OR
2. when one does what one has a legal right not to do.
3. Among competent parties
1. classes of persons who do not have the capacity to contract
1. insane persons
2. intoxication
3. minors
4. With a legal purpose
1. Fraud
1. intentional misrepresentation
1. False material misrepresentation of fact
2. prove scienter 
3. intent to induce reliance of the plaintiff
4. justifiably relied on that statement
5. you suffered damages because misrepresentation

If you have any questions....ask and comment.

Deloitte article on RE

Top ten of real estate in 2012:
http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/FSI/US_FSI_CommercialREOutlook2012_102011.pdf

Great article.

NEW mileage rates for 2011

How much can you deduct when you use a vehicle for business?

• 55.5 cents per mile.  The previous deduction was 51 cents for every mile.  So more deduction but I wonder how the IRS came up with the 1/2 of a cent?

How much can you deduct when you use a vehicle for medical or moving expenses?

• 23.5 cents per mile.  The previous deduction was 19 cents a mile.  

Need Help?

Comment on my post and ask any question you may have about Quickbooks.  For those who do not know what Quickbooks performs,  please comment on this post by asking, "What is Quickbooks?"  I will be happy to explain!

Computer Day

This weekend we worked on all our computers to get them up and running.  Connecting the computers to the printer and the internet.  Hopefully we will have no problems with them as we go through this upcomming tax season.  We will soon be downloading the latest ProSeries tax onto all of our computers.  We are waiting for ProSeries to finish all their upgrades and then we will download ProSeries 2011!! 

Audit risk model

• Inherent risk
•  Likelihood of error in segment
• Detection risk
•  Risk that the auditor will conclude an error that does not exist when in fact the error does.
•  Control risk
•  Clients internal controls fail to detect an error. 

2010 Property Tax Rates: Districts in Johnson County, IN

	Summary Statistics
	Property Tax Rates in Johnson County	Property Tax Rates in State
Highest	4.1567	6.8587
Lowest	1.3345	0.6143
Median	2.06	1.93

These statistics come from http://www.stats.indiana.edu/taxframe.html

Stock Dividends vs Stock Splits

• Stock Dividends
• Stock Divedends result in more shares being issued as dividend(No cash flow is involved). 
• Small stock dividends involve issues of less than 20%-25% of stock.
• The accounting for small stock dividends is based on the fair market value of stock issued.
• The accounting for large stock dividends(more than 20%-25%) is based on the par value of stock issued.
• Stock Split
• When a stock splits the par value of each share decreases; the number of shares increases.

Review

1. PV of a share
1. Div = does not change
2. Split = PV decreases
2. Total number of shares
1. Div = increases
2. Split = increases
3. Stockholder's Equity
1. Div = Less retained earnings & more of stock 
2. Split = same amount of stock & retained earnings
4. Journal entries required?
1. Div = YES
2. Split = NO

liquor, tobacco, & gasoline tax

Japan has a national liquor tax that is paid by consumers when they purchase alcoholic beverages.  National, prefectural and municipal tobacco tax are paid by consumers when they purchase tobacco products.  A national gasoline tax is paid by consumers when they purchase gasoline.  The liquor, tobacco and gasoline taxes are included in the prices shown by shops.

Big 4 accounting firm RESOURCES!

The big 4 accounting firms have great resources and links that Max S Woodbury, CPA, LLC wants to have in the future.  In the meantime I would like to show you some great resources for your business:
Deloitte & Touche
Ernst & Young
PricewaterhouseCoopers
KPMG

3 Tax Returns After Death

• Estate Tax Return ($5 Million Tax Exemption)
• Inheritance Tax Return
• Fiduciary Income Tax Return

Signtronix

Our new sign came in today.  We will put it up Tuesday of next week.  It comes with a computer so you can type messages that display on the sign.  Very convenient and very cool.  Stop by or drive by to check it out on Wednesday!  If you stop by the office on Wednesday, we will put your name on our new sign.  New customers will get a free consultation about their tax return!!!!!

Fluent in American Sign Language

I am fluent in ASL.  Please come in to see me if you are deaf and you have a question about your tax return and if you need it filed!  The deaf culture is a part of me.  My wife and I go to ISD to watch the homecomming football game.  Hope to see you there. 

CPA exam

• Financial Accounting & Reporting (FAR)
• Exam time 4 hours
• 4 testlets
• 60% multiple choice
• 40% seven tasked-based simulations
• Auditing & Attestation (AUD)
• Exam time 4 hours
• 4 testlets
• 60% multiple choice
• 40% seven tasked-based simulations
• Regulation (REG)
• Exam time 3 hours
• 4 testlets
• 60% multiple choice
• 40% seven task-based simulations
• Business Environment & Concepts (BEC)
• Exam time 3 hours
• 4 testlets
• 85% multiple choice
• 15% three written communication tasks

CHECK US OUT

• http://www.maxwoodburycpa.com/
• linkedin.com: Max Woodbury
• facebook.com: Max Woodbury, CPA, LLC
• twitter.com: mwoodbury12
• email us at cpawoodbury@gmail.com or woodbury@netdirect.net
• call us at 765-318-1325 or 317-474-8015

Principles of Successful Investing

1. The only way you can invest is to save money.  The only way you can save money is to spend less than you earn.  The only way you can spend less than you earn is to live beneath your means.
2. Invest so that your money will grow faster than inflation.
3. Don't rely on your pension and Social Security benefits alone for a comfortable retirement income that will keep pace with inflation.
4. Your financial well-being is your own responsibility.  Don't rely too much on others to help you achieve it.

3 parts of the Statement of Cash Flows

CFFOA(Cash Flow From Operating Activities)
CFFIA(Cash Flow From Investing Activities)
CFFFA(Cash Flow From Financing Activities)

LLC

We have become an LLC(Limited Liability Company).  Max Woodbury CPA, LLC

Summary of GAAS

Generally Accepted Auditing Standards
General

1. Training and proficiency is a must
2. Independence in mental attitude
3. Due professional care

Field Work

1. Proper Planning & Supervision
2. Internal control & Entity understanding
3. Sufficient appropriate evidence

Reporting

1. Statements prepared in accordance with GAAP
2. Circumstances when GAAP is NOT followed
3. Adequacy of disclosures
4. Expression of opinion on financial statements

2011 Income Tax Rates

Marginal Tax Rates    Single              Married filing jointly       
       10%                 $0-$8,500               $0-$17,000               
       15%              $8,500-$34,500 $17,000-$69,000           
       25%            $34,500-$83,600 $69,000-$139,350         
       28%            $83,600-$174,400 $139,350-$212,300     
       33%            $174,400-$379,150 $212,300-$379,150   
       35%               $379,150+                 $379,150+                 

Head of Household        Married filing separately
$0-$12,150                       $0-$8,500
$12,150-$46,250              $8,500-$34,500
$46,250-$119,400           $34,500-$69,675
$119,400-$193,350         $69,675-$106,150
$193,350-$379,150        $106,150-$189,575
$379,150+                         $189,575+

Civil Procedure Stages

Pleading Stage
Pre-Trial Stage
Trial Stage
Appeal Stage

Income Statement

Net income shows and increase in owner's equity.  Net loss show's a decrease in owner's Equity.  NI does not show how much cash you earned.

Charitable Contributions Limitatitation for Corporations

For any tax year, a corporate taxpayer's contribution deduction is limited to 10% of taxable income.
Any contributions in excess of the 10% limitation may be carried forward to the five succeeding tax years.

Major Types of Individual Taxes

• Property Taxes (Personalty & Realty)
• Transaction Taxes (Manufacturer's, Wholesaler's, or Retailer's Level & Transfers of Property)
• Death Taxes (Estate & Inheritance)
• Gift Taxes
• Income Taxes
• Employment Taxes

2005 big revenue size CPA firms

1. Deloitte & Touche  $7,814,000
2. Ernst & Young   $6,330,600
3. PricewaterhouseCoopers   $6,167,000
4. KPMG   $4,715,000

Corporation AMT(alternative minimum tax)

A corporation is likely to pay an AMT for one or more of these reasons:

1. A high level of investment in assets such as equipment and structures.
2. Low taxable income due to a cyclical downturn, strong international competition, a low-margin industry, or other factors.
3. Investment at low real interest rates, which increases the company's deductions for depreciation relative to those for interest payments.

Exclusions from Gross Income

1. Donative items (Gifts or inheritances)
2. Personal and welfare items (Injury or sickness payments, public assisstance payments, or disaster relief payments)
3. Wage and salary supplements

•     Fringe benefits
• Accident and health benefits
• HSA
• Lodging and meals furnished for the employer
• Cafeteria plans
• Educational assistance payments
• Child or dependent care
• Military benefits
• combat pay
• housing and uniforms benefits
• Foreign earned income

4. Investors items (Interest on state and loval government obligations or improvements by tenant to landlords property)
5. Benefits for the elderly (Social Security)
6. Other benefits (Income from discharge of indebtedness, Recovery of a prior years deduction that yielded no tax benefit, Gain from sale of personal residence, etc..)

401(k)

$16,500 can be contributed to a 401(k) without being taxed as part of your earned income.  If you withdraw from your 401(k) before age 59 and 1/2 then an 10% additional tax will be attached to the withdrawal.  Unless an exception applies to your situation.

www.ycharts.com

I just subscribed to ycharts.com for help in my stock portfolio.  It's a great site!  Check it out

New Refrigerator

We put in a new refrigerator to put waters and snacks for our clients.  So come on over and we will give you a water bottle! 

Business Law

School of Legal Thought:

1. Natural - Moral ideal
2. Historical - Law comes from customs accepted by the population
3. Analytical - Laws that come from logical principles
4. Sociological - Public policy vs. individual needs
5. Realist - Laws come from desirable social needs

Doctrine of Star Decisis
  Stand by decisions in previous determined cases.  Decisions must be the same!

1. Elements
1. Court of competent jurisdiction
2. Decided a controversy
3. By a written opinion
4. set forth a principle of law that formed a basis for it's decision
1. "Here's what judge said then, I want you to say it now."
5. Principle of law will be followed in subsequent cases
1. "5 other cases this has happened."

Res Judicata (only parties in the same legal issues)
    Things have been decided. 

1. Elements
1. Parties are the same
2. Same legal issue
3. Final decision
4. Court of competent jurisdiction

Auditor's

Auditor's are:
  1. Independent
      Fact- Faithful, Tell the truth
      Appearance- If the auditor is the president of the company, he is not independent in appearance.
  2. Selective Testing
      Random
      Judgemental
  3. Material Misstatements
  4. Form Opinion
  5. F/S as a whole & Presentation

www.maxwoodburycpa.com

We started publishing our new website today!  Visit us at http://www.maxwoodburycpa.com/

It's an accrual world!

Accrual Accounting - Revenues are recognized when they are earned and expenses are recognized in the same period as thhhe related revenue (mathching or using a systematic and rational allocation or expensing in the period in which they expire), not necessarily in the period in which the cash is received or expended by the company.

Dave Ramsey

In Dave Ramsey's book, "Financial Peace Revisited," he guides married couples with this comment;
     "You will never prosper like you should unless both spouses are willing to ask and answer these 5 questions:
1. What is our monthly income?
2. How much a month do we need to spend on food, gas, or kids' clothes?
3. Where are the wills and insurance policies?
5. What is in our retirement plans?"

Hierarchy of Accounting Qualities

Users of Accounting Information           Decision Makers and Their
                                                            Characteristics
Pervasive Constraint                 B             Benefits > Costs
User-specific Qualities              U             Understandability
                                                D             Decision Usefulness
Primary Decision Specific Qualities
1. Relevance
2. Reliability
                 Ingredients of Primary Qualities =>Relevance
                    1. Timeliness
                    2. Predictive Value & Feedback Value
                 Ingredients of Primary Qualities =>Reliability
                    1. Verifiability
                    2. Neutrality
                    3. Representational & Faithfulness
Secondary and Interactive Qualities
  Relevance = Comparability
  Reliability = Consistency
                                                      Threshold for Recognition
                                                                Materiality

My Updated Resume

Max Woodbury

Objective: A summer internship with an accounting firm focusing on tax

Education: Franklin College, Franklin, IN
Major: Accounting
Anticipated Date of Graduation: December 2012

University of Indianapolis 05-06

Skills: Certified QuickBooks ProAdvisor, Tax return preparation, Compilation of financial statements, Fluent in American Sign Language Strong work ethic, Written and verbal communication, Teamwork

Experience:
Max S. Woodbury, CPA, Franklin, IN 6/10 - Present
Staff Accountant
• Compile financial statements
• Prepare individual, corporate and partnership tax returns
• Utilize QuickBooks accounting software
• Install QuickBooks on client computers and serve as a Certified QuickBooks ProAdvisor

Church of Jesus Christ of Latter Day Saints 7/08 – 10/10
Financial Clerk
• Counted Sunday offerings
• Made weekly deposits at the local bank
• Write checks to cover church expenses
• Sat through audits twice yearly to comply with church financial policies

Dick Pierce Kicking Services, Columbus, OH Summers 08-10
Camp Instructor and Counselor
• Taught high school age kids how to kick a football


Activities and Awards

 Boy Scouts
• Eagle Scout: Raised approximately $10,000 and supervised and built an ADA compliant handicap ramp for the Indian Creek H.S. football stadium
• National Boy Scout of the year award – 2005
 Franklin College Football: starting varsity punter (ranked 27th nationally- ncaafootball.com)
 Franklin College Accounting Club

Analyzing Your Stock Activity

1. List your investments in order of their previous performance since your previous evaluation period:
1. HL  $7.12 $7.59 Increase of 6.60%
2. SLV $40.19 $42.61 Increase of 6.02%
3. CSCO $15.70 $15.06 Decrease of 4.08%
4. And So on.....
5. This way you can easily recognize your winners and losers
2. Determine your potential Gain or potential Loss (don't buy a stock with a potential loss 90% and potential gain of 10%).
1. Suggestion:
1. write down the price at what you expect to sell if you have a loss (4% or less below your purchase price
2. write down the price at what you expect to sell if you have a gain (10% or more from your purchase price OR maybe when your stock's P/E ratio increases 100%)
3. Nathan Rothschild said, "....I never buy at the bottom, and I always sell too soon."

Franklin College Accounting Club

It's an accrual world!

Itemized Deductions!

1. Medical Expeneses = 7.5% of AGI can be itemized
2. State and Local Taxes Paid can be itemized
3. Mortgage Interest Expense up to 2 homes
4. Investment Interest up to the amount income reported from investments
5. Charitable Contributions up to 50% of AGI can be itemized
6. Casualty and Theft Losses up to 10% of AGI and $100 per event
7. Gambling Losses up to gambling winnings can be itemized

Puzzle

Accounting is like a puzzle without the assurance that all the pieces are included in the box.  I love to do puzzles.  I love to do accounting more.  Following the puzzle's completion, the puzzler views the beautiful picture with satisfaction.  The accountants picture looks black and white with numbers but it tells a story.  An American's hard work, their sweat, their sacrifices, their love, and their fight for success.  I can't frame that kind of puzzle and view it every day. The accounting picture changes the second I complete the puzzle. 

New Laws Affect Tax

1. The Affordable Care Act
2. The American Recovery and Reinvestment Act of 2009 (ARRA)
3. Hiring Incentives to Restore Employment (HIRE)
4. Small Business Jobs Act of 2010 Tax Provisions

Becker Campus Ambassador!

I may become the Franklin College Becker Campus Ambassador!  I am very excited.  It will be a great experience for me to help my fellow accounting colleagues.  Becker "...has helped nearly half a million accounting, finance and project management professionals advance their careers and achieve success."  This is from Becker's website.  Becker is probably most known for their classes on passing the CPA exam.  "14 of the 15 highest scorers for the 2009 CPA exam prepared with Becker..."

Johnson County Development Corporation

JCDC Annouces Details for Annual Golf Outing - Event Date 09/27/2011 2011:08:11
This event is JCDC's premier annual golf outing. Attendees spend the day networking, building relationships, and having a great time while supporting and celebrating JCDC's continuous efforts in helping build a stronger marketplace within the county.

If you are interested in finding out more details on this event, please contact Nikki Walker at nvwalker@jcdc.org or 317.736.4300.
Back to Home Page

Selling Your Home?

10 Tax Tips from the IRS:

1. In Genreal, you are eligible to exclude the gain from the income if you have owned and used your home as your main home for 2 years out of the 5 years prior to the date of its sale.
2. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).
3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the 2 year period prior to the sale of the home.
4. If you can exclude all of the gain, you do not need to report the sale on the tax return.
5. If you have a sale that is not exludible, you must report the sale on the tax return.  You must report it on Form 1040 or Schedule D.
6. You cannot deduct a loss from the sale of your main home.
7. Publication 523 "Selling Your Home" will help you figure the adjusted basis of the home you sold, the gain or loss on the sale, and the gain you can exclude.
8. If you have more than 1 home, you can only exlcude the sale of your main home.  You must pay tax on any other home you sell for a gain.  If you have two homes and you live in both of them, then the home you live in most is your main home.
9. If you recieved the 1st time homebuyer credit and within 36 months of the date of purchase, the property is no longer used as the principal residence, you are required to repay the credit.  Repayment of the 1st time homebuyer credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5405, First Time Homebuyer Credit and Repayment of the Credit.  The full amount of the credit is reflected as additional tax on that year's tax return.
10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you recieve correspondance from the IRS.  Use Form 8822, Change of Address, to notify the IRS on changing your address.

IRS

The IRS has millions of dollars that are returned each year as undeliverable.  Did you have a refund but did not get your check?

1. You may have moved before the IRS could send you your check.  "Where's My Refund" at IRS.gov.

AUGUST 2011

We will be putting in a lot of work hours in August at Woodbury Square.  Hope to see you there with any accounting questions you may have!

Accountants

I am not a good accountant unless I pay little to no taxes every year and I do it ethically.  Meaning I am a good accountant when I know where and how to use deductions and credits on my tax return.  Also, the steps on how to live life by achieving these deductions and credits throughout the year.  Taxes is a way of life!  It can and should be a good way of life as well.