May 15, 2012
Cookies from Kroger
Please come into the office and have some Cookies from Kroger. Thank you Brooke from PAYCHEX for bringing the cookies!! We love to share the soft chocolate chip cookies!
May 15th!
Personal Property Taxes due!
The following is the website to fill out Form 103 or Form 102(if you are a farmer) and Form 104:
http://www.in.gov/dlgf/4971.htm
Please comment on this post if you have any problems or questions. Thank you
The following is the website to fill out Form 103 or Form 102(if you are a farmer) and Form 104:
http://www.in.gov/dlgf/4971.htm
Please comment on this post if you have any problems or questions. Thank you
May 14, 2012
Health Care Tax Credit for Small Businesses!
Since the enactment of federal health care reform, hundreds of thousands of small business owners across the country have been able to claim a tax credit for offering their employees health benefits -- and millions more are eligible, according to a report released today by advocacy group Small Business Majority and consumer group Families USA. For tax year 2011, seven in 10 small businesses with 25 or fewer employees are eligible for the credit.
But most striking is that the majority of entrepreneurs don't even know this credit exists.
American small businesses employ millions of workers and create 65 percent of all net new jobs. They can be found in every pocket of the country, driving growth in metropolitan cities, suburban settings and rural towns. Small businesses hold an iconic position in the American consciousness -- a position that sometimes makes it easy to forget how much they struggle to achieve that deserved recognition.
The reality is, most small businesses operate within thin profit margins. And that means they're less likely than big businesses to be able to afford health coverage for their workers. It's a decades-old problem that the Affordable Care Act was designed specifically to address. According to the report released today, more than 3.2 million small businesses employing 19.3 million Americans are eligible for the healthcare tax credit included in the law to help offset their premiums. Erica Hawthorne, the marketing manager for Ken Weinstein's Philadelphia, Penn. Trolley Car Diner, is one of those 19.3 million.
Erica reports that Ken received a tax credit of 19 percent of his premiums, and that she has directly benefited. After being on an individual plan, Erica was able to gain better insurance when Ken decided to expand employee coverage after receiving the credit. "Offering employee health benefits has helped the business attract and retain staff," Erica said. "When I was able to switch over to the group plan, I saw a significant change in my premiums. It really increased my take-home pay. From an employee perspective, offering health insurance adds to the entire package of any job. It's mutually beneficial for a business and its employees."
Entrepreneurs like Ken are using their tax credit savings t0 boost benefits, hire new workers and more. With $15.4 billion available for this year's credits alone, eligible small business owners and their employees stand to reap big savings. That $15.4 billion amounts to an average of $800 per employee, or $1,066 at businesses that qualify for the maximum credit of 35 percent of their 2011 premium costs.
According to the report, two in five eligible businesses should qualify for the 35 percent maximum (which in 2014 will jump to 50 percent). Those who think they might be eligible should talk to their accountants, but to meet basic qualifications, owners must have fewer than 25 full-time employees and pay at least 50 percent of their premiums.
Unfortunately, not nearly as many employers who are eligible for this benefit have taken advantage of it. This is largely due to small business owners' overall unfamiliarity with this provision of the Affordable Care Act. Our national opinion polling found 57 percent of small business owners have never heard of the tax credit. For the sake of these small businesses, it's imperative lawmakers and small business groups spread the word about this and other provisions in the law that will help boost entrepreneurs' bottom lines. These individuals -- the cornerstone of state and local economies -- are doing everything they can to build up their companies right when our nation needs it most.
What You Need to Know about the Small Business Health Care Tax Credit
How will the credit make a difference for you?
For tax years 2010 through 2013, the maximum credit is 35 percent for small business employers and 25 percent for small tax-exempt employers such as charities. An enhanced version of the credit will be effective beginning Jan. 1, 2014. Additional information about the enhanced version will be added to IRS.gov as it becomes available. In general, on Jan. 1, 2014, the rate will increase to 50 percent and 35 percent, respectively.
Here’s what this means for you. If you pay $50,000 a year toward workers’ health care premiums – and if you qualify for a 15 percent credit, you save … $7,500. If you save $7,500 a year from tax year 2010 through 2013, that’s total savings of $30,000. If, in 2014, you qualify for a slightly larger credit, say 20 percent, your savings go from $7,500 a year to $12,000 a year.
Even if you are a small business employer who did not owe tax during the year, you can carry the credit back or forward to other tax years. Also, since the amount of the health insurance premium payments are more than the total credit, eligible small businesses can still claim a business expense deduction for the premiums in excess of the credit. That’s both a credit and a deduction for employee premium payments.
There is good news for small tax-exempt employers too. The credit is refundable, so even if you have no taxable income, you may be eligible to receive the credit as a refund so long as it does not exceed your income tax withholding and Medicare tax liability.
And finally, if you can benefit from the credit this year but forgot to claim it on your tax return there’s still time to file an amended return.
Click here if you want more examples of how the credit applies in different circumstances.
Can you claim the credit?
Now that you know how the credit can make a difference for your business, let’s determine if you can claim it.
To be eligible, you must cover at least 50 percent of the cost of single (not family) health care coverage for each of your employees. You must also have fewer than 25 full-time equivalent employees (FTEs). Those employees must have average wages of less than $50,000 a year.
Let us break it down for you even more.
You are probably wondering: what IS a full-time equivalent employee. Basically, two half-time workers count as one full-timer. Here is an example, 20 half-time employees are equivalent to 10 full-time workers. That makes the number of FTEs 10 not 20.
Now let’s talk about average wages. Say you pay total wages of $200,000 and have 10 FTEs. To figure average wages you divide $200,000 by 10 – the number of FTEs – and the result is your average wage. The average wage would be $20,000.
Also, the amount of the credit you receive works on a sliding scale. The smaller the business or charity, the bigger the credit. So if you have more than 10 FTEs or if the average wage is more than $25,000, the amount of the credit you receive will be less.
If you need assistance determining if your small business or tax exempt organization qualifies for the credit, try this step-by-step guide
How do you claim the credit?
You must use Form 8941, Credit for Small Employer Health Insurance Premiums, to calculate the credit.
If you are a small business, include the amount as part of the general business credit on your income tax return.
If you are a tax-exempt organization, include the amount on line 44f of the Form 990-T, Exempt Organization Business Income Tax Return. You must file the Form 990-T in order to claim the credit, even if you don't ordinarily do so.
Don’t forget … if you are a small business employer you may be able to carry the credit back or forward. And if you are a tax-exempt employer, you may be eligible for a refundable credit.
Common IRA Questions
1. Can I Use An IRA Rollover To Move Funds Out Of My Employer Sponsored Plan While I Still Work There?
Most employer sponsored retirement plans do not allow you to roll funds out of the plan while you are still employed. To find out if they do, you can call your plan sponsor, and ask if they allow what is called an "in-service distribution".
An in-service distribution is not the same thing as a loan or hardship withdrawal. Instead, for those few plans that allow it, an in-service distribution is a transaction where you can rollover funds for your plan into a self-directed IRA account while you are still employed.
No Longer Employed
Once you are no longer employed, it may make sense to roll funds from your plan into an IRA account. At that time, to avoid tax withholding, you'll want to choose what is called a direct IRA rollover.
Once you are no longer employed, it may make sense to roll funds from your plan into an IRA account. At that time, to avoid tax withholding, you'll want to choose what is called a direct IRA rollover.
2. Will Taxes Be Withheld When I Move Funds From My Employer Plan To An IRA Rollover?
When rolling funds from an employer sponsored plan to your IRA, you can avoid mandatory tax withholding (explained below) by requesting a direct rollover. In this case, although the check may be mailed to you, it will be made payable directly to your new trustee or custodian.
Mandatory Tax Withholding Required If IRA Rollover Distribution Paid To You
If an eligible rollover distribution is paid directly to you, the payer must withhold 20% of it, which they send directly to the IRS for taxes. This applies even if you plan to roll over the distribution to a traditional IRA.
If an eligible rollover distribution is paid directly to you, the payer must withhold 20% of it, which they send directly to the IRS for taxes. This applies even if you plan to roll over the distribution to a traditional IRA.
You can avoid tax withholding by choosing a direct rollover option, where the distribution check is payable directly to your new trustee or custodian.
3. Will I Be Taxed If I Transfer Funds From One IRA To Another IRA?
An IRA transfer occurs when your move IRA funds from one trustee (or custodian) directly to another trustee, either at your request or at the trustee's request. As long as there is no distribution payable to you, the transfer is tax free.
4. Can I Use My IRA Funds Tax Free If I Deposit Them Back Into My IRA?
If you withdraw funds from an IRA, and then subsequently redeposit them to your IRA within 60 days, the transaction would not be taxed.
Use caution - since your custodian does not know if you will be redepositing the funds, they may be required to withhold 20% in taxes from your initial distribution. You would have to be able to repay this 20% out of pocket. You would recover it when you filed your tax return.
You could use this 60 day provision to "borrow" funds from your IRA for a short period of time. However, if any portion of the distribution is not repaid within the 60 days, and you are under age 59 1/2, it would be considered an IRA early withdrawal, subject to taxes and penalties, unless you could qualify for an exception.
Once A Year IRA Rollover Provision
You can withdraw, tax free, all or part of the assets from one traditional IRA if you reinvest them within 60 days in the same or another traditional IRA. You can only use this provision once per year, per each receiving and distributing IRA account.
You can withdraw, tax free, all or part of the assets from one traditional IRA if you reinvest them within 60 days in the same or another traditional IRA. You can only use this provision once per year, per each receiving and distributing IRA account.
Example
You cannot roll funds from IRA-1 to IRA-2 over 60 days, then from IRA-2 to IRA-3 over another 60 days, and so on. However if you had four IRA accounts to begin with, then within the same year you could use the 60 day rollover provision between IRA 1 and 2, and between IRA 3 and 4.
You cannot roll funds from IRA-1 to IRA-2 over 60 days, then from IRA-2 to IRA-3 over another 60 days, and so on. However if you had four IRA accounts to begin with, then within the same year you could use the 60 day rollover provision between IRA 1 and 2, and between IRA 3 and 4.
Eligible rollover provisions from employer sponsored retirement plans are not subject to the once-a-year provision.
5. Can I Use An IRA Rollover To Move Just Part Of My Account?
IRA rollovers are not an all-or-nothing proposition. You can use an IRA rollover to move just a portion of your funds from one IRA to another, or to rollover just part of a qualified plan to an IRA.
6. I Inherited An IRA. Can I Roll This Into My Own IRA?
If you inherit a traditional IRA from your spouse, you can roll the funds into your own IRA, or you can choose to title it as an inherited IRA. There are pros and cons to doing it either way.
IRA Not Inherited From A Spouse
If you inherit a traditional IRA from someone other than your spouse, you cannot roll it over or allow it to receive a rollover contribution. You must withdraw the IRA assets within a specified period of time.
If you inherit a traditional IRA from someone other than your spouse, you cannot roll it over or allow it to receive a rollover contribution. You must withdraw the IRA assets within a specified period of time.
7. Can I Rollover My Required Minimum Distributions?
Amounts that must be distributed during a particular year under the required minimum distribution rules are not eligible for IRA rollover treatment.
8. Do I Have To Report IRA Rollover Transactions On My Tax Return?
IRA rollovers are reported on your tax return, but as a non-taxable transaction. Even if you correctly execute an IRA rollover, it is possible that your plan trustee or custodian will report it wrong on the 1099-R they issue to you and to the IRS. I have seen this occur many times in my career.
If your custodian reported the transaction incorrectly, and you hand off the documentation to your tax-preparer without explaining the transaction to them, it could get reported on your return incorrectly.
To make sure you don't pay tax on an IRA rollover or transfer, carefully explain any IRA rollover or transfer transactions to your tax preparer, or double check all documentation if you prepare your own return.
May 11, 2012
What age can you start withdrawing from an IRA?
Withdrawing From Your IRA Before Age 59 1/2
The general rule is that if you withdraw money from your IRA before 59 1/2 the IRS whacks you with a 10% penalty. So, ideally you need to wait until you reach that age.
As with most IRS rules, there are some exceptions:
IRS publication 590 lists these exceptions to the 10% penalty:
- You have unreimbursed medical expenses that are more than 7.5% of your adjusted gross income.
- The distributions are not more than the cost of your medical insurance
- You are disabled.
- You are the beneficiary of a deceased IRA owner.
- You are receiving distributions in the form of an annuity.
- The distributions are not more than your qualified higher education expenses.
- You use the distributions to buy, build, or rebuild a frist home.
- The distribution is due to an IRS levy of the qualified plan.
- The distribution is a qualified reservist distribution
These exceptions have some qualifiers on them so it’s important to look at the IRS publication to make sure you fit into one of these categories before you take the money out.
For example, the exception that says you can take the money in the form of annuity – basically what the IRS means here is that you must take “substantially equal period payments” – in other words a set amount per year for either a) five years or b) til 59 1/2, whichever is longer.
Also, be aware that these exceptions are for the 10% premature distribution penalty NOT taxes! You still have to pay taxes on any withdrawal you take out.
Accesssing Your IRA at 59 1/2
Reaching the magic age of 59 1/2 is one retirement milestone you should look forward to.
Once you reach this age, you can begin to take your IRA distributions penalty free! At this point you can take out as much as you want, whenever you want.
Again, there is no escaping the taxes (unless of course you are in a Roth IRA) so just be aware that every dollar you pull out will be as if you earned that money for the year – it counts as ordinary income.
By the way, you literally must reach age 59 1/2 – not 59, 5 months and 15 days. You can take the money any time on the day you turn 59 1/2 or after.
Just because you turned 59 1/2 doesn’t mean you have to take the money out though. You may not want to. If you’ve done a good job establishing other sources of income, you may decide to wait.
When must you start withdrawing from your IRA?
If you do decide to wait however, you won’t be able to leave that money in your IRA forever.
At age 70 1/2 you will be required to take a minimum distribution ( also known as RMD, which uses a formula set up by the IRS to determine the amount) and pay taxes on those withdrawals.
But, what if you don’t need the money and you’d rather wait? That’s fine, but just know that good ol’ Uncle Sam will uppercut you with a 50% penalty on the amount that should’ve been distributed along with the normal taxes due.
They want to make sure they get their tax revenue some how. So be aware that sooner or later you HAVE to take money out of your IRA.
Remember, you can always withdraw money from your IRA, but you need to know the right rules and regulations to determine when a distribution will be right for you.
This information is from ChristianPF at http://christianpf.com/when-can-you-withdraw-funds-from-your-ira/
This information is from ChristianPF at http://christianpf.com/when-can-you-withdraw-funds-from-your-ira/
May 10, 2012
Interested in working for the IRS?
WASHINGTON — The Internal Revenue Service today announced it is accepting applications for the Internal Revenue Service Advisory Council (IRSAC), which provides a public forum for IRS officials and representatives of the public to discuss relevant federal tax administration issues.
"Recommendations from IRSAC members assist the IRS in a wide range of administrative and strategic decisions," said IRS Commissioner Doug Shulman.
Applications will be accepted through June 15, 2012. IRSAC is comprised of up to 35 members, who are appointed to three-year terms by the Commissioner. Applications are currently being accepted for approximately seven appointments that will begin in January 2013.
IRSAC members submit a report to the IRS Commissioner annually at a public meeting in the fall.
Nominations of qualified individuals may come from individuals or organizations. IRSAC members are drawn from substantially diverse backgrounds. Membership is balanced to include representation from the tax professional community, including but not limited to: tax attorneys, certified public accountants, enrolled agents, appraisers, and the business community. Federally registered lobbyists cannot be members of IRSAC.
Nominations should describe and document the proposed member’s qualification for IRSAC membership, including the applicant’s knowledge of Circular 230 regulations and the applicant’s past or current affiliations, as well as dealings with the particular tax segment or segments of the community that the applicant wishes to represent on the council.
More information, including application forms, are available on the Tax Professional’s Page on IRS.gov, the official IRS Web site. Questions about the application process can be sent to the following e-mail address: *public_liaison@irs.gov.
"Recommendations from IRSAC members assist the IRS in a wide range of administrative and strategic decisions," said IRS Commissioner Doug Shulman.
Applications will be accepted through June 15, 2012. IRSAC is comprised of up to 35 members, who are appointed to three-year terms by the Commissioner. Applications are currently being accepted for approximately seven appointments that will begin in January 2013.
IRSAC members submit a report to the IRS Commissioner annually at a public meeting in the fall.
Nominations of qualified individuals may come from individuals or organizations. IRSAC members are drawn from substantially diverse backgrounds. Membership is balanced to include representation from the tax professional community, including but not limited to: tax attorneys, certified public accountants, enrolled agents, appraisers, and the business community. Federally registered lobbyists cannot be members of IRSAC.
Nominations should describe and document the proposed member’s qualification for IRSAC membership, including the applicant’s knowledge of Circular 230 regulations and the applicant’s past or current affiliations, as well as dealings with the particular tax segment or segments of the community that the applicant wishes to represent on the council.
More information, including application forms, are available on the Tax Professional’s Page on IRS.gov, the official IRS Web site. Questions about the application process can be sent to the following e-mail address: *public_liaison@irs.gov.
Info from the IRS
1. Starting a new business?
2. Owe tax and need payment options?
3. Health care benefits reporting information for employers
4. USA.gov: the U.S. government's official web portal
5. Responding to a notice or letter from the IRS
The Small Business and Self-Employed Tax Center is a one-stop resource for information.
2. Owe tax and need payment options?
Updated information on collection procedures for taxpayers who owe taxes.
3. Health care benefits reporting information for employers
The Form W-2 Reporting of Employer-Sponsored Health Coverage page of IRS.gov has new information including:
- A chart detailing the types of coverage to report
- Transition relief for many employers
- Q&As about the reporting requirements
4. USA.gov: the U.S. government's official web portal
Business USA has hundreds of resources for entrepreneurs and small businesses.
5. Responding to a notice or letter from the IRS
IRS.gov has information to help taxpayers understand IRS letters and notices without having to call or visit an IRS office.
May 9, 2012
May 8, 2012
Record a deposit and refund from a vendor for a bill already paid
You may receive a refund from one of your vendors and deposit the amount refunded to your bank account. Since you've already paid the bill, record a Deposit and reverse the original expense. If you're not depositing a refund, but have received a credit, enter a Bill Credit and apply it.
Detailed Instructions
Deposit the refund to reverse the original expense:- From the Banking menu, select Make Deposits.
- If the Payments to Deposit window opens, select any payments you would like to include in this deposit and click OK.
- In the Make Deposits window, click the Deposit To drop-down and select the account you would like to deposit into.
- Click the Received From field on a blank line.
- In the Received From column, enter the name of the vendor from whom you received the money.
- In the From Account column, select the expense account used on the original bill.
- Enter a memo, the check number if you received a check, and the method of payment such as a check, or credit card.
- (Optional) If you use classes, enter the class for this deposit.
- In the Amount column, enter the amount of the refund.
- (Optional) If the vendor has issued a refund exceeding the amount owed to you as a credit, enter only the amount of the over payment on the next line of the deposit using the vendor's name, Accounts Payable as the account, and the amount.
May 7, 2012
Personal (Nonbusiness) Energy Property Credit
Taxpayers can claim a credit for certain home improvements
placed in service in 2011. This credit
for personal energy property was also available for qualifying improvements placed
in service from 2006-2010, except for 2008.
Allowable Credit:
The credit is equal to 10% of the cost of qualified
energy-efficient property or improvements.
The credit is limited to (1) $50 for each advance main air circulating
fan; (2) $150 for each natural gas, propane or oil furnace or hot water boiler
and (3) $300 for each item of: (a) electric heat pump water heaters, (b)
electric heat pumps, (c) biomass fuel stoves, (d) high-efficiency central air
conditioners or € natural gas, propane or oil water heaters.
The total amount of credit than can be claimed in 2011
combined is $500 ($200 for exterior windows and skylights). This amount is reduced (but not below zero)
for any credits claimed in 2006-2010.
There are no AGI or income limits so all individuals can
claim the credit.
For 2011, the credit can offset regular tax and AMT.
The credit is reported on Part I of Form 5696, Residential Energy Credits.
Personal Energy Property Credit - Qualifying Property 2011 |
||
| Product | Energy Requirements | Maximum Credit Per Item |
| Advanced Main Air Circulating Fan |
Must use no more than 2% of the furnace's total energy | $50.00 |
| Air Source Heat Pump | 1)Split systems: HSPF ≥ 8.5; EER ≥ 12.5; SEER ≥ 15. |
$300.00 |
| 2)Package systems: HSPF ≥ 8; EER ≥ 12; SEER ≥ 14. | $300.00 | |
| Biomass Stove | Thermal efficiency rating of at least 75% as measured |
$300.00 |
| using a lower heating value. | ||
Central Air Conditioning |
1)Split systems: EER ≥ 13; SEER ≥ 16. |
$300.00 |
| 2)Package systems: EER ≥ 12; SEER ≥ 14. | ||
| Electric Heat Pump Water Heater | Energy factor ≥ 2.0. All ENERGY STAR qualified electric |
$300.00 |
| heat pump water heaters qualify. | ||
Gas, Oil or Propane Hot Water Boiler |
AFUE ≥ 95 | $150.00 |
| Gas, Oil or Propane Water Heater | Energy factor ≥.82 or a thermal efficiency of at least 90% |
$300.00 |
| Insulation | Must meet 2009 IECC (including supplements) prescriptive |
$500.00 |
| criteria.To qualify, its primary purpose must be to | ||
| insulate.Therefore, insulated siding does not qualify. | ||
Natural Gas or Propane Furnace |
AFUE ≥ 95 |
$150.00 |
Oil Furnace |
AFUE ≥ 95 |
$150.00 |
Roof(Metal & Asphalt) |
Metal roofs with appropriate pigmented coatings & |
$500.00 |
| asphalt roofs with appropriate cooling granules that also | ||
| meet ENERGY STAR requirements. | ||
Storm Windows & Doors |
In combination with the exterior window/door over |
$500.00 |
| which it is installed: has a U-factor and SHGC of .30 or | ||
| below and meets the IECC prescriptive criteria. | ||
Windows & Skylights |
U factor ≤ .30; SHGC ≤ .30 | $200.00 |
| Source: www.energystar.gov | Thomson Reuters |
|
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