IRS Releases 2011 Tax Tables and Other Inflation Adjustments

IRS Releases 2011 Tax Tables and Other Inflation Adjustments: "- Sent using Google Toolbar"

How to Cash in on Long-Lasting Fads : Money :: American Express OPEN Forum

How to Cash in on Long-Lasting Fads : Money :: American Express OPEN Forum: "- Sent using Google Toolbar"

Top Ten Enterprise Technology Trends of 2010 | CTO Edge

Top Ten Enterprise Technology Trends of 2010 | CTO Edge

Tax Relief Act of 2010

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ("the Act"), generally consists of extensions of expired or expiring tax provisions. One of the most important features is the extension of the Bush-era tax cuts set to expire December 31, 2010. Also included in the bill is the extension of several popular tax breaks and the AMT "patch" – all of which expired December 31, 2009. Below is a summary of these provisions.

The President signed the Act into law on December 17, 2010.

Click here for a chart for 2010 tax preparation and 2011 tax planning.

Congress Sends Tax Cut Extension Bill to President

Late on Thursday, after some procedural delays, the House of Representatives agreed to the Senate's version of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, HR 4853, and by a vote of 277 to 148 sent it to President Barack Obama for his signature. The bill is the result of a deal negotiated by the White House and members of Congress, and the president is expected to sign it soon.

Congress Sends Tax Cut Extension Bill to President

How QuickBooks Helps You Destress at Tax Time

The reasons for putting off tax preparations are endless - and understandable. But when we procrastinate on this tedious job, tax filing deadlines mean marathon sessions grappling with tax records. Not only is this unpleasant, but it also makes it more likely you'll make potentially costly mistakes on your return.

Conscientious daily work habits - including a diligent eye on tax issues - can help prevent this painful scenario. QuickBooks offers many built-in tools to help you minimize the tax-time terrors.

Stay on Top of Your Receivables in QuickBooks 2011

Even if your sales are up, slow customer payments may be damaging your cash flow. If you often come up short when it's time to pay your tax obligations, it may be that you're not chasing down your receivables adequately.

QuickBooks Pro and Premier 2011 added a number of features to help with this. The new Customer Snapshot gives you instant access to key customer information - things like open balance, number of days to pay, and recent invoices and payments.

A new vertical pane next to transaction forms displays an overview of your interaction with the customer or vendor. Beyond saving the time you used to spend looking up historical information, this feature can alert you to collection opportunities. A new Collections Center also automates e-mailed collection notices.

Figure 1: QuickBooks Pro and Premier 2011 display vertical panes next to transactions to help you catch unbilled items and open balances.

If you've got any questions about these newer versions of QuickBooks, give our office a call.

Older Versions' Cash Flow Tools

Previous versions of QuickBooks also help you maximize customer payments. Enter an invoice for a customer who has outstanding time charges and/or costs, and a dialog box reminds you of that.

Figure 2: If you're invoicing a customer who already owes you money, QuickBooks will remind you - and include the past due balance in your current form.

Also, QuickBooks' integration with Microsoft Word makes short work of collection letters. Open the Customer Center, then click Word | Prepare Collection Letters and follow the wizard. The Payment Snapshot (Company Snapshot | Payments) is a page you should visit daily; its tables and graphs spell out who needs nudging.

Intuit also offers solutions that let you accept payments online, so you don't have to wait for checks to arrive in the mail. Talk to us about which one might be best for you and how to get started with it.

Keep Documents Close

However you store receipts and other tax-related paper, it can be frustrating to match paper to QuickBooks data. QuickBooks 2010 introduced the ability to attach scanned documents to any screen that has the Attach icon. Using this tool faithfully will reduce the time and frustration associated with your tax preparation. Prices start at $9.95/month for one attachment per list item or transaction; 30-day free trial.

Figure 3: Click on this icon to attach a scanned paper document to a QuickBooks item.

Use "Classes"

QuickBooks uses the accounts assigned to your transactions to categorize your tax-related data. You can also slice your data in additional ways by using classes to break out account balances by filters, like by departments, consultants, or locations. But you must use it faithfully for it to be effective.

To get started with classes, first make sure that you're set up to handle them. Click on Edit | Preferences, then click the Accounting tab and Company Preferences. Click on the box next to Use class tracking if it isn't already checked, and on Prompt to assign classes if you want QuickBooks to remind you before you save an unclassified transaction.

Figure 4: Make sure your Company Preferences are set to accommodate class tracking.

Next, go to Lists | Class List, and then click the Class tab in the lower left corner. Select New. Type your new class name in the field that appears and check the Subclass of box if you want to make this a subclass. Assign these classes in transactions where appropriate, and you'll have neatly categorized data for the Profit & Loss by Class, Profit & Loss Unclassified, and (new in 2011) Balance Sheet by Class reports. Classes can also be displayed in other reports.

Built for Tax Reporting

Unfortunately, QuickBooks can't prepare your taxes for you - but these tools help shape your data so tax deadlines are less stressful and your returns more accurate than in the days of pencil and paper.

QuickBooks organizes data in the background by, for example, assigning your transactions to the appropriate accounts, so your reports tell the right story. Another helpful feature includes the ability to print 1099s, W-2s, and W-3s.

QuickBooks' design encourages you to look at tax-related issues every day, which can be a very good thing come filing time. Take advantage of this - along with our expert advice - and you can be more confident and less frantic during your periodic interaction with the IRS.

Financial Tips for December 2010

Make Charitable Contributions
Consider making charitable contributions before year-end both to obtain the maximum tax deduction and to fulfill any charitable programs or commitments you may have established.

Buy a New Car
If you need a new car, now is a great time to purchase or lease. Frequently, dealers are anxious to clear out last year's inventory prior to year-end. In making your choice, consider the federal tax (and occasional state tax) advantages for buying fuel-efficient vehicles.

Examine Investments
Examine your current investments to determine those with unrealized losses. Consider selling those investments to take the loss this year. You can deduct up to $3,000 in capital losses in excess of capital gains. However, do not let the tax savings outweigh the investment potential. You might consider "swapping" for a similar company in the same industry if you like the potential of the industry.

Pay Tax-Deductible Expenses
Consider paying tax-deductible expenses prior to year-end. Some common examples are real estate taxes, quarterly state or local income taxes, investment-related expenses, and dues. These must be paid by December 31 to obtain a deduction this year. Professional guidance will be helpful here, so please call us.

Evaluate Your Progress
Evaluate your progress for the year. How close were you to your budget? Recalculate your net worth. Compare it to the value at the beginning of the year. How did you do?

Interest Rates Decrease for the First Quarter of 2011

WASHINGTON – The Internal Revenue Service today announced that interest rates for the calendar quarter beginning January 1, 2011, will decrease by one percentage point. The rates will be:

• three (3) percent for overpayments [two (2) percent in the case of a corporation];
• three (3) percent for underpayments;
• five (5) percent for large corporate underpayments; and
• zero and one-half (0.5) percent for the portion of a corporate overpayment exceeding $10,000.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates announced today are computed from the federal short-term rate during October 2010 to take effect November 1, 2010, based on daily compounding.

Revenue Ruling 2010-31, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin No. 2010-52, dated December 27, 2010.

Obama Reveals Deal ‘Framework' With GOP Including Two-Year Tax Cut Extension for All

President Obama announced Dec. 6 that he has agreed to
the “framework” of a deal to extend the 2001 and 2003 tax
rates for two years, temporarily cut the estate tax rate
to 35 percent, and trim two percentage points off of the
Social Security payroll tax.

The president said his goal is to ensure that taxes do
not rise on middle-class households on Jan. 1 and that
the plan he has sketched out with Senate Republicans
would do that, while also providing additional stimulus
to the economy through extensions of key tax breaks from
the American Recovery and Reinvestment Act (Pub. L. No.
111-5).
Obama said he understands that congressional Democrats
will be displeased with the agreement, but said he needed
to break the stalemate with Republicans in order to keep
taxes from rising sharply in the coming weeks.

“I know there are some people in my own party and in the
other party who would rather prolong this battle even if
we can't reach a compromise but I am not willing to let
working families across this country become collateral
damage for political warfare here in Washington,” Obama
said in an evening press conference.

Obama said the agreement would extend unemployment
insurance benefits for the long-term unemployed for an
additional 13 months, cut workers' share of the Social
Security payroll tax from 6.2 percent of earnings to 4.2
percent for one year, and extend the improvements to the
earned income tax credit and the child tax credit.

The cut in the Social Security payroll tax rate would
give workers who earn $70,000 per year an additional
$1,400 per year in tax savings, White House officials
said. The officials said the provision would replace the
Making Work Pay tax credit used in 2009 and 2010 and
would offer a more generous and easier system for
calculating tax breaks.

As was done with the Hiring Incentives to Restore
Employment Act (Pub. L. No. 111-147, the money would be
shifted to the Social Security trust fund to make sure
there is no negative impact on trust fund and solvency.
The idea of a payroll tax cut is “one of the higher
impact tax cuts for encouraging job growth and economic
growth” and would provide $120 billion into the economy
next year, a White House aide said.

On the business side, the plan would also provide
businesses with the ability to expense the full cost of
all capital investments made during 2011, an improvement
from the 50 percent expensing provision included in ARRA.
None of the proposed extensions would be offset through
spending cuts or other revenue raisers, White House aides
said.

Reid Says It's Not a Deal
Senate Majority Leader Harry Reid's (D-Nev.) office said
they were not referring to the announcement as a “deal”
and called Reid's reaction to the announcement “tepid.”
“Now that the President has outlined his proposal,
Senator Reid plans on discussing it with his caucus
tomorrow,” Reid spokesman Jim Manley said in a written
statement.

Republicans had a more upbeat reaction to the
announcement, saying it will help the economy.
“Preventing a massive, job-killing tax increase on
families and small businesses is my number one priority.
This framework will allow us to extend all current tax
rates and give economic recovery and job creation a
chance,” said Rep. Dave Camp (R-Mich.), ranking member of
the House Ways and Means Committee. “The failure to reach
and pass an agreement preventing a tax hike would have
been devastating for families, especially those who are
still looking for work.“
Senate Minority Leader Mitch McConnell (R-Ky.) said he
appreciates the “determined efforts” of the White House
to craft a plan with Republicans and expressed
encouragement that the agreement would create incentives
for economic growth.
“Members of the Senate and House will review this
bipartisan agreement, but I am optimistic that Democrats
in Congress will show the same openness to preventing tax
hikes the administration has already shown,” McConnell
said.

Estate Tax Cut for Two Years
On top of the extension of the upper-income tax cuts for
two additional years, Republicans also won a significant
victory in getting the White House to agree to a
reduction in the estate tax.
Obama agreed to a 35 percent tax rate for the estate tax
for 2011 and 2012 and the exemption level for the estate
tax would be raised to $5 million per person. Without
congressional action, the estate tax rate will return to
its pre-2001 level of 55 percent and the exemption level
will fall to $1 million per person.

White House aides said the plan would also include a
two-year extension of the alternative minimum tax
exemption “patch” to keep taxes from rising on an
additional 20 million taxpayers, as well as all of the
short-term tax provisions known collectively as the
“extenders.”
Those extenders provisions include popular tax breaks
such as the research and development tax credit, the
subpart F active financing exception, and federal
deductions for state and local taxes.
Investors will also benefit from the plan through an
extension of the 15 percent top tax rate for both capital
gains and dividends tax rates.

Kenneth Bentsen, executive vice president for Securities
Industry and Financial Markets Association, praised the
announcement and encouraged Congress to pass a bill as
soon as possible.
“With this likely agreement, America's investors have
achieved the necessary certainty to put the economic
recovery on firmer ground. Extending current tax rates on
capital gains and dividends for the next two years will
help stimulate savings and investment, thus promoting
economic growth and job creation,” Bentsen said.

The agreement was prompted after party leaders and
members of the six-man tax negotiating team met with
President Obama over the weekend to discuss a way forward
after efforts to extend only the tax cuts affecting the
first $250,000 in income (for couples; $200,000 for
individuals) failed in a Dec. 4 cloture vote.
Although Democrats' initial tax extension bill failed, it
did provide a road map for many of the provisions that
will be in the final package. The substitute amendment
(S. Amdt. 4727 to H.R. 4853) offered by Senate Finance
Committee Chairman Max Baucus (D-Mont.) featured most of
the same provisions suggested by the president, but also
included the repeal the new Form 1099 information
reporting rules, created under the Patient Protection and
Affordable Care Act (Pub. L. No. 111-149). Repealing the
expanded Form 1099 rules would cost the government $19.3
billion over 10 years.
White House officials said the Form 1099 provision is not
included in their framework, but the president has
previously said he will support its full repeal.

Tab to Exceed $2.2 Trillion
The White House said it could not yet provide an estimate
for the total cost of the bill. The Joint Committee on
Taxation estimated that the tax portion of Baucus's
legislation would cost $2.2 trillion over 10 years, with
$1.5 trillion of that coming from the extension of the
middle-class tax cuts. The American Opportunity tax
credit would cost $80 billion under the Baucus bill.

Lawmakers said they are eager to complete the legislation
and adjourn for the year.
“Look, it's almost Christmas Eve. I don't think anybody
thinks that we can leave this thing hanging. And so that
deadline is a pretty good way to focus our attention,”
Senate Minority Whip Jon Kyl (R-Ariz.) said during a Dec.
5 interview on CBS's Face the Nation.
Likewise, Senate Majority Whip Richard Durbin (D-Ill.),
speaking alongside of Kyl, said Congress is ready to
leave town as soon as possible and acknowledged that
Democrats would likely have to accept a short-term
extension of the upper-income tax rate extensions.
“There's nothing that motivates members of Congress more
than the thought of a recess or going home,” Durbin said.
Separately, the Congressional Research Service said in a
Dec. 3 report that the House-passed bill (H.R. 4853) to
extend tax cuts affecting those earning less than
$250,000 would increase tax revenues by $252 billion over
five years, “but still leaves federal debt on an
unsustainable path.”

A two-year extension of all of the Bush-era tax cuts
could cost over $300 billion and raise debt service costs
by $121 billion over 10 years, CRS said. However, a
temporary extension “could provide time for Congress to
consider tax reform and also provide a deadline to
complete deliberations,” the report said.

By Brett Ferguson and Heather M. Rothman
The JCT estimate on the cost of the Baucus substitute
amendment (S. Amdt. 4727 to H.R. 4853) and the CRS
report updating the status of the tax rate extensions
are available in TaxCore.

IRS Releases 2011 Standard Mileage Rates

The IRS released on Friday the standard mileage rates for use in 2011 (Notice 2010-88). The optional standard mileage rates can be used by taxpayers to calculate the deductible costs of operating an automobile.

IRS Releases 2011 Standard Mileage Rates

Year-End “Ten Commandments” for Church Treasurers and Administrators

Richard Hammar’s Year-End “Ten Commandments” for Church Treasurers and Administrators

Follow this checklist to ensure you’ve completed the necessary notifications, changes, and updates by December 31, 2010 to be ready for 2011.

1. Designate housing or manse allowance for all ministerial employees.
2. Report salary and service changes to the Board of Pensions.
3. Have employees review and/or update their W-4 forms for voluntary tax withholding elections.
4. Ask ministerial employees if they want to start voluntary tax withholding.
5. Reclassify ministerial workers from self-employed to employee status for income tax purposes.
6. Reimburse year-end business expenses by the end of the year.
7. Record and report Christmas gifts to all staff members.
8. Advise donors to not file their tax returns before receiving their contributions summaries.
9. Issue receipts for year-end contributions, noting the correct year.
10. Order new IRS tax forms and publications.

Salary change submission and salary confirmation available online through Benefits Connect
Source: Fall 2010 Church Treasurer & Business Administrator News

Church treasurers and administrators can submit salary changes and/or confirmations online for members currently serving their churches or employing organizations. It is important to submit updates within 31 days of the change.*

You can also view all the employees that the Board has on file for your organization, along with their current effective salaries, position descriptions, and the effective date of the salaries. In addition, you can view the current address and contact information that the Board has on file for your employing organization.

Note: To update your employees’ service information under the Traditional Plan, such as changes in employing organization, hours, employment classification, or Benefits Plan participation, please use the Service Change form (enr-110).

*Retroactive changes to hours, employment classification, and salary are made only for the current year and the immediate preceding year, subject to the date the Board receives the updates.

Update Retirement Savings Plan Adoption Agreements, as needed
Source: Fall 2010 Church Treasurer & Business Administrator News

Church treasurers and business administrators are reminded that they must update their church or employing organization’s Retirement Savings Plan of the Presbyterian Church (U.S.A.) Adoption Agreement (ors-006) whenever they make any changes that affect the plan – i.e., changes to eligibility requirements or employer contribution amounts.

For further information, call the Board of Pensions at 800-773-7752 (800-PRESPLAN).

Who Benefits from Health Care Reform?

There's plenty of debate about whether the new health care reform bill is good for America. Whatever your views, it looks like the Affordable Care Act - a massive piece of legislation passed by Congress in March - is here to stay.

The majority of Americans without health insurance are the owners or employees of small businesses. For many of these individuals, health insurance has been unaffordable for themselves, their families, and their employees.

But the new legislation is set to change that. It makes it less expensive to purchase insurance - and it provides tax credits for small business owners who do.

And, because the aim of the bill is to get the vast majority of Americans at least minimally covered, the Act imposes tax penalties on those who don't purchase insurance.

If you own a small business or are a sole proprietor, read on for an overview of how the bill affects you.

What Do Small Businesses Get?

Cheaper Insurance through Health Exchanges. The Affordable Care Act sets up state-run Health Insurance Exchanges that allow individuals and small business owners to get the same discounted insurance rates larger corporations have been enjoying for years. This makes coverage much more affordable for these folks.

Tax Credits. The Act comes with $40 billion in tax credits for small businesses who offer health insurance coverage to their employees. The federal government expects that more than 60% of small employers - or 4 million firms - will be eligible for these incentives. These are meant to recover some of the companies' cost of offering coverage.

Effective now, if your business employs 25 or fewer people who are making $50,000/year or less on average, you get up to 35% credit on health insurance premiums. The credit is based on a sliding scale, with smaller companies that have lower-paid workers receiving the largest credit.

In 2014, if you buy that insurance through a Health Care Exchange, the maximum credit rises to 50% for 2 years.

Tip: The tax credit cannot be claimed by small business owners themselves or self-employed individuals. However, those folks may be eligible for federal subsidies. See the guidelines below.

What If You're Self-Employed?

Individuals who work for themselves can buy insurance on the health exchanges and also receive more affordable rates.

To help pay for the premiums, people whose annual income is up to four times the poverty level receive federal subsidies.

Tip: Individuals can make up to $44,000 and still qualify for subsidies to pay for their health care from health exchanges. A family of four can make up to $88,000.

Note: To help pay for health care reform, taxpayers in the highest tax bracket - those making $200,000 individually or $250,000 married - will see a rise in their Medicare taxes. Medicare Part A taxes will rise by .9%, and taxes on unearned income will increase by 3.8%. These changes take effect January 1, 2013.

The Coverage Mandate - Are You Affected?

Small businesses with 50 or fewer employees are not required to provide insurance to their employees under the new health care law.

However, larger companies with more than 50 full-time employees do need to provide insurance, beginning in 2014, or face tax penalties of $2,000 annually per worker above 30 workers.

Everyone Must Participate - or Face a Fine

If you don't buy coverage, you're faced with a tax penalty to the federal government, beginning in 2014. This fine starts fairly small, but by 2016, when it's fully phased in, it's more substantial. An insurance-less person would have to pony up whichever is greater: $695 for each uninsured family member, up to a maximum of $2,085; or 2.5 percent of household income.

Special Attention for Three Industries

Employers in three industries - tanning salons, construction, and restaurants - see these specific changes under health care reform:

Tanning Salons. In July 2010, a 10% sales tax was instituted on individuals using tanning salons. The revenue raised by this measure is meant to help pay for the costs of the Act.

Construction. In the construction industry, a higher percentage of companies must comply with the 2014 coverage mandate - those with just 5 or more employees.

Restaurants. Under the mandated insurance provision that goes into effect in 2014, two part-time workers equal one full-time worker.

Want to Know More? Give Us a Call

There's a lot more to the Affordable Care Act than we've covered here - including the elimination of denial of coverage for pre-existing conditions and free preventive care. At a whopping 2,600 pages, this bill is complicated and far-reaching.

If you have any questions about how this bill affects your business and your tax obligations, please let us know. We're here to help.

Effort to repeal unpopular 1099 filing rule fails in Senate

Despite Democrats and Republicans agreeing that the rule should be changed, an effort to repeal an element of health care legislation that would require businesses that spend $600 or more with a vendor to file a 1099 form has failed to pass in the Senate. The Senate twice was unable to get the 67 votes needed to get rid of the provision, which critics say will burden businesses with unnecessary paperwork. Senate Finance Chairman Max Baucus, D-Mont., said Monday that he and Sen. Mike Johanns, R-Neb., have agreed to work out a compromise to repeal the 1099 provision in the health care law. More.

Energize Missouri Homeowner Upgrades and Geothermal Program

If you live in Missouri, take a look at this link for the state’s rebate program for improving your home’s energy conservation: http://www.dnr.mo.gov/transform/energizemissourihomes.htm