Medicare surtax of 3.8% on unearned income of high income individuals. .9% surtax on earned income over $200,000 for singles and $250,000 for couples. Self-employed's won't be able to deduct any of the surtax as half of their SECA tax. Penalty on individuals who remain uninsured starting in 2014. Lower income earners will get a refundable credit to help them afford health insurance. Small firms that provide health insurance to workers will receive a credit. New 10% excise tax on tanning services provided by tanning salons. The 7.5% medical deduction threshold is increased to 10%. .
The Kiplinger Tax Letter
Vol. 85, No's. 7 & 8
______________
Those who dream by day are cognizant of many things which escape those who dream only by night.
Edgar Allan Poe
______________
The Installment Sale Method of reporting gains on the sale of certain assets (excluding inventory type assets and stock and securities traded on an established market) spreads the taxable gain over two or more years. Caveat: any depreciation recapture is taxable in the initial year of the sale. However, with proper tax planning installment sales can defer and sometimes reduce the amount of taxes paid on certain asset sales.
CCH
Practical Tax Bulletin
Issue 1
The principal mark of genius is not perfection but originality, the opening of new frontiers
Arthur Koestler
______________
The Service expects to audit 6,000 businesses over the next three years. Agents will be looking for violations of rules for worker classification, executive pay and fringe benefits.
The Kiplinger Tax Letter
Special Issue
If you can't make it better, you can laugh at it.
Erma Bombeck
______________
Surprise! Audits of S Corporations have uncovered broad noncompliance in certain areas such as travel expenses, meals and entertainment, car and truck expenses, expensing tools and supplies and taking profits as dividends instead of as salary to avoid paying payroll taxes.
The Kiplinger Tax Letter
Special Issue
There are two types of preparation-physical and mental. You can't get by with just one or the other.
Ken Stabler
______________
Meals and lodging provided with long-term care services can be deducted as medical expenses if the person is in the facility for medical reasons.
The Kiplinger Tax Letter
Special Issue
Competition is a way of life. If you don't have a really tough competitor, you ought to invent one.
Bill Smithburg
______________
Street-legal electric golf carts qualify for a federal income tax credit of $2,500 and up. In many cases the credit is more than half the cost of the vehicle's cost. Buyers can rely on the manufacturers' credit certification.
The Kiplinger Tax Letter
Special Issue
Don't learn the tricks of the trade-learn the trade.
James Charlton
______________
As of January 1, 2010, every taxpayer can convert their regular IRA to a Roth IRA. Income caps on Roth contributions still exist, but the limits don't apply to conversions. Taxpayers who convert in 2010 have the option to report half of the income on their 2011 and 2012 returns. But top bracket taxpayers may want to report the income on their 2010 return since there is a high probability of a tax rate increase. Early 2010 conversions will help reduce the amount of the tax owed on the conversion if your IRA account grows in value. If the account declines in value you can unconvert without having to pay any income taxes.
The Kiplinger Tax Letter
Special Issue
Invest in the human soul. Who knows-it might be a diamond in the rough
Mary Mcleod Bethune
______________
The IRS believes that many taxpayers using the completed-contract method of accounting are inappropriately deferring income. Therefore the IRS will increase their audits of Builders and Developers using the completed-contract method of accounting for income tax purposes.
The Kiplinger Tax Letter
Special Issue
Getting something done is an accomplishment; getting something done right is an achievement.
Author Unknown
______________
Real Estate agents can fully deduct their real estate rental losses without regard to passive activity loss disallowance rules if they spend over one half of their work time and at least 750 hours per year materially involved in the real estate rental activity.
Agarwal, TC Summ. Op. 2009-29
It really doesn't cost anything to be nice, and the rewards can be unimaginable.
Bear Bryant
______________
Vehicle mileage must still be substantiated to verify the vehicle's business usage via a logbook, diary or similar documentary evidence to expense the business portion of the cost of the vehicle.
TC Summ. Op. 2009-126
Bureaucracy is the art of making the possible impossible.
Javier Pascual Salcedo
______________
For 2010 the standard mileage rate is 50 cents per mile for business use, 16.5 cents per mile for medical and moving purposes and 14 cents per mile for vehicles used for charitable purposes.
Rev. Proc. 2009-54, 2009-51 IRB_;IRS News Release IR-2009-111
All successful men have an education. Some got it without going to school, and some got it after going to school.
Author Unknown
______________
Companies can correct most employment tax underreporting errors interest free.
Rev. Rul. 2009-39
Being happy doesn't mean that everything is perfect. It means that you've decided to look beyond the imperfections.
Author Unknown
______________
Congress changed the January 31st deadline to February 16, 2010 for the 2009 Forms 1099-B's, 1099-S's and certain 1099-MISC's. Also, the later due date applies to annual composite statements that include 1099-DIV and 1099-INT forms.
The Kiplinger Tax Letter
Vol. 84, No. 26
While it is true that without a vision the people perish, it is doubly true that without action the people and their vision perish as well.
Johnetta B. Cole
______________
Casualty losses on rental property aren't passive losses and therefore don't count toward the $25,000 limit on deductible passive losses.
Agosto
TC Summ. Op. 2009-191
Success is for those who know what they want and go after it, no matter how difficult the path.
Jacques A. Nasser
______________
FLP's can be used to reduce estate taxes as long as they are set up for reasons other than tax savings.
Estate of Black
133 TC No. 15
Those who travel unworn paths find the rarest flowers.
Hindu Proverb
______________
Congressional inaction has the estate tax disappearing in 2010, then reappearing in 2011 with a lower $1 million exemption.
The Kiplinger Tax Letter
Vol. 84, No. 26
______________
Let your speech be always with grace, seasoned with salt, that ye may know how ye ought to answer every man.
The Bible
______________
Generally, any person in a trade or business who receives more than $10,000 in cash in a single transaction or in related transactions must file Form 8300.
IRS.gov
e-News for Small Businesses
Issue Number 2009-18
September 2, 2009
______________
The earnestness of your desire will indicate the distance you are likely to travel.
Clark C. Stockford
______________
Losses are not presumed to be passive according to the Tax Court. If the owners can satisfy one of the seven tests to show that they materially participated in the business they can treat any losses as non-passive. The significance of this ruling is that it makes it easier for such owners to deduct their losses against other income.
The Kiplinger Letter
August 2009
______________
Give the world the best that you have, and the best will come back to you.
Madeline Bridges
______________
1. Three characteristics are used by the IRS to determine the relationship between businesses and workers: Behavioral Control, Financial Control, and the type of Relationship.
2. Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done though instructions, training or other means.
3. Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker's job.
4. The Type of Relationship factor relates to how the workers and the business owner perceive their relationship.
5. If you have the right to control or direct not only what is to be done, but also how it is to be done, then your workers are most likely employees.
6. If you can direct or control only the result of the work done - and not the means and methods of accomplishing the result -- then your workers are probably independent contractors.
7. Employers who misclassify workers as independent contractors can end up with substantial tax bills. Additionally, they can face penalties for failing to pay employment taxes and for failing to file required tax forms.
8. Workers can avoid higher tax bills and lost benefits if they know their proper status.
9. Both employers and workers can ask the IRS to make a determination on whether a specific individual is an employee by filing a Form SS-8 -- Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding -- with the IRS.
10. You can learn more about the critical determination of worker's status as an Independent Contractor or Employee at IRS.gov by selecting the Small Business link. Additional resources include IRS Publication 15-A, Employer's Supplemental Tax Guide, Publication 1779, Independent Contractor or Employee, and Publication 1976, Do You Qualify for Relief under Section 530? These publications and Form SS-8 are available on the IRS Web site or by calling the IRS at 800-829-3676 (800-TAX-FORM).
IRS.gov
August 21, 2009
______________
It is no exaggeration to say that a strong, positive self-image is the best possible preparation for success in life.
Joyce Brothers
______________
1. Understanding that you will be more of the chief cook and bottle washer than the Chief Executive Officer.
2. Realizing that you are buying someone else's "baby" . The seller has much of his or her life tied up in the business and needs to be comfortable turning the business over to the you the buyer.
3. Money. Buyer's should not begin the process until they have the necessary funds or know exactly where they will come from.
4. Accepting reality. In good times businesses sell for higher prices just like in bad times they sell for lower prices.
5. Understanding that there are no sure things and that buying a business is risky.
6. Accepting responsibility. Owning a business is a huge responsibility.
7. Patience. Buying the right business takes time.
8. A viable reason for buying a business. Also, all involved parties should be informed and supportive of the purchase.
9. Courage to take the leap of faith to pull the trigger. Once a buyer finds the right business at the right price they need to make the purchase.
10. Professional help. Buyers shouldn't make the largest financial decision in their life without good professional advice.
Summarized from the Business Brokerage Press
the business broker
August 18, 2009
______________
Next time you find yourself looking at a dream and thinking, "That's not possible," turn that on its head and force yourself to take the contrary view. Tell yourself: "Success is inevitable. Now prove it."
Curt Rosengren
Motivational Speaker
______________
Rental income is any payment the taxpayer receives for the use or occupation of property. Advance rent is included in income in the tax period it is received. Security deposits that are refundable are not included in income unless the deposit is later retained by the lessor. Non-refundable deposits are included in income when received. Tenant payments to cancel a lease are considered to be rental income. The fair market value of services or property received in lieu of rent is also included in rental income.
Ordinary and necessary expenses incurred in respect to rental property are deductible. Examples include mortgage interest, property tax, operating expenses, depreciation, and repairs. Repairs are deductible only if they keep the property in good condition without materially adding to the property's value. The cost of improvements cannot be deducted immediately but rather they should be capitalized and expensed by depreciation. Examples include adding a deck, fence or roof to the property.
The lessor should keep good records to substantiate all rental expense, which will aid in preparing the financial statements, identify the source of receipts, keep track of deductible expenses, and prepare tax returns. All travel expenses incurred for rental property repairs, etc. should be recorded.
IRS Headliner Volume 271, July 8, 2009______________
If you are not generous with a meager income, you will never be generous with abundance.
Harold Nye
______________
Internal Revenue Service field agents are being offered new flexibility to go easier on delinquent taxpayers caught up in the current economic squeeze. Exactly how much additional discretion financially struggling taxpayers and their CPAs can expect from IRS enforcement personnel remains to be seen, but Commissioner Doug Shulman made it clear that he wants to "empower" the service's field agents to soften the tax pinch on economically distressed Americans.
Accounting Today
Vol. 23, No. 11
______________
Never hesitate to ask for help. No one succeeds alone.
Micheline Bouchard
Business executive
______________
1. The Emergence of China as the World's Largest Economic Power
2. Global Demographic and Migration Shifts
3. Energy and Water Shortages
4. Managing Waste, Reusing Products
5. Falling Education Standards, Less-Skilled Thought Leaders
6. Brand Relationships Intensify
7. Instant Gratification Shopping
8. On-Demand Media
9. Customization, Personalization, and Community Experiences
10. Youth Rules
Michael Richarme
The Futurist, July-August 2009
______________
Real happiness is cheap enough, yet how dearly we pay for its counterfeit.
Hosea Ballou
______________
1. Do you believe you have what it takes?
2. Are you able to let other people down?
3. How do you handle setbacks?
4. Are you really an inventor (or technician), rather than an entrepreneur?
5. Can you accept that your company may outgrow you?
6. When you look in the mirror, does an entrepreneur look back?
Summarized from Inc. Magazine
July/August 2009
______________
Friends and good manners will carry you where money won't go.
Margaret Walker
______________
Employers with SIMPLE IRA plans cannot unilaterally stop, in mid-year, nonelective contributions they had previously promised to employees, the IRS recently cautioned.
IRS Employee Plan News
Summer 2009
______________
Say not you know a man entirely till you have divided an inheritance with him.
Johann Kaspar Lavater
_____________
Don't deprive your child of succeeding on his/her own. Allow them to gain experience outside the family business. Current employees will respect them more if they have outside experience.
Summarized from Inc. Magazine
July/August 2009
______________
People who think money can do anything may very well be suspected of doing anything for money.
Mary Pettibone Poole
A Glass Eye at a Keyhole
______________
The Tax Court has held that members of limited liability companies and limited liability partnerships are not automatically presumed to lack material participation in the entities" activities for purposes of the passive activity loss rules.
Garnett v. Commissioner, Dec. 57,875, 132 TC
______________
More people should learn to tell their dollars where to go instead of asking them where they went.
Roger W. Babson
______________
1. Honor competitor's coupons.
2. Give new customers that buy a service/product additional services/products for free.
3. Use tournaments, performances, board games etc. to increase awareness among prospects.
4. Highlight your businesses' local roots.
5. Use tapes, CD's, DVD's, etc. to advertise your business.
6. Market to your prospects' influencers.
7. Advertise through payroll company's by putting coupons in employee pay checks.
8. Use You Tube, My Space, Face book, Twitter, etc. to get your message out.
Summarized from Inc. Magazine
July/August 2009
______________
People with love in their hearts go through life untouched by poverty regardless of the amount of monetary wealth they may acquire.
Douglas Meador
______________
Taxpayers are required to recognize gain when their qualified intermediary holding proceeds from the sale of relinquished property in a deferred Code Sec. 1031 exchange filed for bankruptcy, preventing the QI from transferring monies to acquire a replacement property and complete the like-kind exchange.
The IRS noted that there is legislation pending before Congress that would amend the Code and allows a suspension of the 180-day period in the case of bankrupt QIs.
INFO-2009-0063, INFO-2009-0066, and INFO-2009-0106
______________
The successful man or woman has a guiding vision, a dream, a sense of focus. He or she has a clear idea of what he or she wants to have, do, or accomplish. It is the achiever's divine right to dream.
Dennis Kimbro
______________
...without pushing them so hard that they quit.
Work harder yourself.
Create a sense of urgency.
Dole out cheap carrots.
Be fair.
Summarized from Money Magazine
July 2009
______________
We can change ourselves for the better and cause ourselves to subconsciously pursue our most precious desires with almost total success, if we crystallize the images clearly enough in our minds because the subconscious mind cannot tell the difference between real and vividly imagined situations.
Charles A. Coonradt
______________
Holding a company wide competition can inspire all staff members to think like innovators. Follow these rules to maximize results and minimize costs.
-Make participation mandatory
-Pick a slow time of year
-Assemble small, diverse teams
-Keep it loose
-Give specific feedback
-Reward the best ideas
Summarized from Inc. Magazine
June 2009
______________
For no matter how triumphant we are, no matter how high we may climb, the course of a normal life will lead us to losses.
Judith Viorst
______________
We'll never know if the stimulus really worked. There are no do-over's, so we won't be able to tell what would have happened if a different path were taken. Because recessions run their course, eventual improvements is inevitable, helped by low interest rates as well as low prices for gasoline and other commodities. But a lack of confidence among consumers and companies and the halt in spending and hiring threaten to keep the economy from recuperating fully for several years. Throwing billions at the problems means soaring deficits and inflation later. But policymakers see those as the least of the evils they face.
The Kiplinger Letter
February 2009
______________
Share your success and help others succeed. Give everyone a chance to have a piece of the pie. If the pie's not big enough, make a bigger pie.
Dave Thomas
______________
The American Recovery and Reinvestment Act of 2009 extends the 50 percent bonus depreciation, the higher cap for new vehicles, and the Code Section 179 expensing limit of $250,000. Also, the new law provides a five year NOL carryback period for small businesses.
______________
Francis J. Gable
______________
The American Recovery and Reinvestment Act of 2009 increases the exclusion from income 75% gain from the sale of certain small business stock acquired and held for more than five years.
______________
When your outgo exceeds your income, the up-shot may be your downfall.
Paul Harvey
______________
______________
Rationalization may be defined as self-deception by reasoning.
Karen Horney
______________
______________
It has been my philosophy of life that difficulties vanish when faced boldly.
Isaac Asimov
______________
______________
Never be too proud to change.
Bobby Bowden
______________
The American Recovery and Reinvestment Act of 2009 enhances the existing HOPE education credit for 2009 and 2010. The enhancements include the credit maximum amount increasing to $2,500, the covered time period increasing to four years and qualifying expenses now including course materials.
______________
The willingness to trust others even when you know you may be taken advantage of is the cornerstone of becoming civilized.
O. A. Battista
______________
An above-the-line deduction for sales taxes paid on the purchase of a new vehicle is included the American Recovery and Reinvestment Act of 2009. The deduction is limited to the amount of tax on the first $49,500 of the purchase price and will be phased out for taxpayer's with adjusted gross incomes exceeding $125,000 ($250,000 for joint returns).
______________
It is not enough to have power. Power must be used to protect freedom and give all people hope for the opportunity to see the fruit of their own labor.
Jesse Helms
______________
______________
The common sense is that which judges the things given to it by other senses.
Leonardo Da Vinci
______________
China will become the world's largest economy within the next three decades.
Tourism's future is bright.
Book publishers may need to hire movie directors.
Retirees in the United States will increasingly return back to work.
Wealth trends favor the already-favored.
Consumers will gain CEO-like powers in the business world.
Socioeconomic disparities will become more pronounced in aging societies.
Social safety nets will get cut.
______________
Making the most of other people's strengths and the least of their weaknesses is a surefire formula for managerial success.
Author Unknown
______________
"Economists who study the impact and implications of various forms of taxation have generally found strong support for the idea that ... consumption taxes increase social welfare". Integrating financial literacy into the public high-school curriculum may increase savings more than the current tax incentives for retirement contributions. Studies provide evidence that financial education does persuade people to save more.
The Futurist, November-December 2008
______________
Visual & Performing Arts $35,073
English $35,453
Liberal Arts $36,715
Business Administration $46,171
Economics $51,062
Computer Science $58,677
Chemical Engineering $63,773
Money, December 2008
______________
"Gradually we will regain confidence in the market. This is a financial panic, not an economic one."
David Wyss, chief economist at Standard & Poor's
______________
Tax-Exempt Money-Market Funds
USAA Tax-Exempt Money Market Fund 4.42% min. $3,000 800-531-8181
Tamarack Tax-Free Money Market Fund 4.35% min. 1,000 800-934-6674
Taxable Short-Term Bond Funds
Metro West Low Duration Bond M 6.91% min. $5,000 800-241-4671
USAA Short-Term Bond Fund 5.55% Min. $3,000 800-531-8181
Tax-Exempt Short-Term Bond Funds
Alpine Ultra Short Tax Optimized Income Fund 4.99% min. $2,500 800-222-8222
USAA Tax Exempt Short-Term Fund 4.61% min. $3,000 800-531-8181
Money, December 2008
______________
The measure of success is not whether you have a tough problem to deal with, but whether it is the same problem you had last year.
John Foster Dulles (1888-1959)
Statesman
______________
SEP-IRA: Best for Sole proprietors looking to save in profitable years.
Simple IRA: Best for small employers looking to keep staffers happy.
Solo 401(k): Best for People who work for themselves and want to save more.
Traditional 401(k): Best for businesses of more than 10 employees
Defined Benefit Plan: Best for sole proprietors over 45 with stable high income
Money, October 2008
______________
Don't take the loan unless you absolutely must. You're borrowing against your financial future.
Money, October 2008
______________
You don't need to be sick to get better.
Author Unknown
______________
Printers are now able to print many 3-D items by stacking layers of raw material processed through the printer. As with all technologies, the price of these printers will come down as more people adopt the technology. Soon People will be able to make many of the products that they now buy. Customization will be easier than ever.
The Futurist, January-February 2009
______________
Don't dwell on your mistakes. Get it right the next time.
Kirk Speraw
College basketball coach
______________
There is a strong case for ... providing veteran workers with new skills (from new and younger hires) and orienting new workers with the institutional history (from the more experienced workers). The benefits include increased productivity, innovation, and organizational stability. While your long-term workforce teaches your new hires about the "job" have the new hires teach the old timers technology skills.
Summarized from The Futurist, January-February 2009
______________
Look over all your expenses with a fresh eye.
Consider buying supplies or merchandise in greater quantities.
Consider joining forces with another business to buy in quantity.
Ask all new customers where they heard about you, so you can minimize your advertising costs to only those that are effective.
Use jumbo postcards or 6 x 9 envelopes for direct marketing efforts.
Carefully plan trips and errands to minimize travel costs.
Consider charging fuel surcharges or past due interest charges.
Use an interest bearing business savings account to deposit checks from customers.
Tighten up your credit and collection policies.
Don't pay unnecessary interest or finance charges.
Use your accounting records to indicate the best time to incur certain expenses.
Evaluate what expenditures are better spent on outside services or contractors.
Never compromise on quality.
Revised from Alyssa Lebovic - Money Tips
______________
No man can climb out beyond the limitations of his own character.
John Morley (1838-1923)
Statesman
______________
______________
It is all too easy to speed through life with our eyes focused only on the road ahead. The challenge is scanning the horizon from time to time to determine where we are headed.
Christopher Gergen and Gregg Vanourek
Life Entrepreneurs
Jossey-Bass
______________
1. Send Your Employees Home
2. Share Your Staff
3. Get Customers to Put Away their Credit Cards
4. Cut Back on Travel
5. Try Do-It-Yourself Marketing
Money Magazine, October 2008
______________
We should be taught not to wait for inspiration to start a thing. Action always generates inspiration. Inspiration seldom generates action.
Frank Tibolt (1897-1989)
Personal success trainer and author
______________
How to Win Friends and Influence People, Dale Carnegie
The Time Trap, Alec Mackenzie
Man's Search for Meaning, Viktor Frankl
The Meditations of Marcus Aurelius
The Golden Sayings of Epictetus
A Whack on the Side of the Head: How You Can Be More Creative, Roger von Oech
The Alchemist, Paulo Coelho
The Bible
Undaunted Courage, Stephen E. Ambrose
The Strangest Secret, Earl Nightingale
Toward a Psychology of Being, Abraham Maslow
The Science of Getting Rich, Wallace D. Wattles
Phule's Company, Robert Asprin
The Measure of Our Success, Marian Wright Edleman
-Money Magazine, October 2008
Email us the title and author of your favorite inspirational book.
______________
There are three rules for success. The first: Go on. The second: Go on. The third: Go on.
Frank Crane
______________
Beginning on January 1, 2009, the standard mileage rates for the use of a car, van, pickup or panel truck will be 55 cents per mile for business miles driven, 24 cents per mile driven for medical or moving purposes, and 14 cents per mile driven in service of charitable organizations.
______________
Your dream is not big enough if it doesn't scare you.
Matthias Schmelz
Entrepreneur and author
______________
Rules for entrepreneurs to live by:
1. Numbers run a business. If you don't know how to read them, you are flying blind.
2. A sale isn't a sale until you collect.
3. When your short-term liabilities exceed your short-term assets, you are bankrupt.
4. Forget about shortcuts. Run a business as if it's forever.
5. Cash is hard to get and easy to spend. Make it before you spend it.
6. You have no friends in business, only associates.
7. Don't focus on the top line. Gross margin is the most important number on
the Income statement.
Norm Brodsky
Inc. Magazine
October 2008
______________
Recognize a failure early and go on to the next idea.
Bill Heinecke
Entrepreneur
______________
To determine an appropriate salary, call local employment associations or industry groups or go to Glassdoor.com and PayScale.com
Money Magazine
September 2008
_____________
Jumping at the first opportunity seldom leads to a happy landing.
Author Unknown
______________
If more than half of your kid's school and living costs are paid from assets held in his name-and you're too rich for an education credit-you might bypass an exemption for him on your taxes. The exemption, $3,500 in 2008, begins to phase out once a couple earns $239,950 anyway. Junior can then claim a credit to offset his tax bill if its hefty. (He'll owe you one.)
Money Magazine
September 2008
______________
When in conflict, climb to the high road of understanding and compassion. Your view is better at the top.
Jerry Stoffer
Maitland Florida
______________
Bankrate.com will clue you in to how healthy your bank is.
Visit fdic.gov for an interactive worksheet to determine if any of your deposits are uninsured.
Money Magazine
September 2008
______________
An IRS auditor who bred greyhounds was denied a loss deduction because he did not engage in the greyhound breeding activity for profit. Whitecavage v. Commissioner, T.C. Memo. 2008-203 (8/27/08).
______________
CASH. The proposed regulations implement the requirement that no deduction is allowed for any contribution by cash, check, or other monetary gift unless the donor maintains a bank record or written communication from the donee. The bank record or written communication must show the name of the donee, the date of the contribution, and the amount of the contribution. There is no de minimis exception.
NONCASH. For contributions of less than $250 donors are required to obtain a receipt from the donee or keep reliable records. For contributions of $250 to $500 the donor needs a contemporaneous written acknowledgement. For total contributions of more than $500 but less than $5,000 the donor must also file Form 8283 with the return claiming the deduction. For contributions of more than $5,000 the donor must also have a qualified appraisal. The proposed regulations disallow any contributions of clothing or household items unless they are in good used or better condition.
______________
Previously, there was some confusion as to whether a health insurance policy purchased by a sole proprietor was required to be issued in the name of the sole proprietor's business. The Chief Counsel's Office clarified that the policy may be in the individual's name.
Kleinrock's Federal Tax Bulletin, Volume 8, Issue 14
______________
The best way to escape from a problem is to solve it.
Author Unknown
______________
Bob Dole
Politician
_______________
Cleveland (Aug. 11, 2008)
By WebCPA staff
The Internal Revenue Service placed a $228,806 tax lien on former Cleveland Browns quarterback Bernie Kosar, which he said he has now paid.
The IRS filed the lien in June for Kosar's 2006 taxes. Kosar told the Cleveland Plain-Dealer that he paid the back taxes a few weeks ago, and the reason why he hadn't paid them was that he was going through a messy divorce at the time.
"Divorce is difficult enough as it is, especially for someone who wasn't really looking to do that," he told the paper. "So who owes what and all of that becomes hard, but whatever I owe, obviously I would pay."
Kosar retired as a player in 1996 and is now one of the owners of both the Florida Panthers hockey team and the Cleveland Gladiators arena football team.
______________
Many of us are afraid to follow our passions, to pursue what we want most because it means taking risks and even facing failure. But to pursue your passion with all your heart and soul is success in itself. The greatest failure is to have never really tried.
Robyn Allan
Dance show producer and performer
______________
The Internal Revenue Service issued an alert about a new wave of e-mail scams that use the IRS name to commit to identity theft.
In May and June, taxpayers reported nearly 700 phishing incidents to the lure the recipients into divulging their personal financial information. So far this year, taxpayers have reported about 1,600 phishing incidents to the IRS. The most common scams involve economic stimulus payments and tax refunds.
In one scam, the e-mail claims the recipient is eligible for a tax refund and instructs the victim to click on a link to access a refund claim form. The claim form requests personal information the scammer can then use to access the victim's bank account or credit card.
Another scam e-mail purports to be a message from the IRS asking fro the victim's bank account information so an economic stimulus payment can be directly deposited there. Yet another scam e-mail offers a link to an IRS report on the company where the recipient works. When the recipient clicks on the link, the Web site may put software on the victim's computer that might allow a hacker to take over and probe for personal information. In a similar scam, an e-mail contains a link to a supposed petition from the Tax Court about a case involving the IRS and the recipient.
Scammers are also using faxes to coax information from taxpayers. One fax claiming to be from the IRS asks the recipient to update their information for the IRS files and promises a special tax refund. The fax asks for not only financial information, but also a copy of the recipient's passport and driver's license, and his or her mother's maiden name.
______________
If you want to succeed in the world you must make your own opportunities as you go on. The man who waits for some seventh wave to toss him on dry land will find that the seventh wave is a long time a-coming.
John B. Gough (1817-1886)
Temperance advocate and speaker
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A married couple's claimed theft loss deduction was drastically reduced when they failed to substantiate either their basis in the stolen items or the items' fair market value immediately before the theft.
Adel v. Commissioner, T.C. Summary 2008-65 (6/10/08)
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An Individual's claim seeking removal and cancellation of various notices of federal tax lien was dismissed and the IRS could garnish the individual's social security benefits.
Acevedo v. United States, No. 4:08CV248 CDP (E.D. Mo. 5/16/08)
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The IRS plans to issue guidance for businesses on how the special 50-percent deprecation allowance that was included in the Economic Stimulus Act of 2008 can be used to make capital investments in 2008. IR-2008-58
This special bonus depreciation allowance is available to all businesses and applies to most types of tangible personal property and computer software acquired and placed in service in 2008.
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A successful man is one who can lay a firm foundation with the bricks that others throw at him.
David Brinkley(1920-2003)
Broadcast journalist
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Code Section 2036 is one of the weapons in the IRS’s arsenal used to protect the integrity of the estate tax regime. It is designed to drag back into an estate assets that have been superficially transferred by a taxpayer but which the taxpayer still continues to enjoy during his or her lifetime. That’s what the IRS said occurred when Anna Mirowski transferred substantial assets to a limited liability company and then made gifts of interests in the company to trusts that she had established for her daughters. According to the IRS, the transferred assets really belonged in Anna’s estate, with the result being an additional estate tax of $14.2 million. But in Estate of Mirowski v. Commissioner, the Tax Court denied the IRS’s claim, saying that Anna’s transfers were valid and that she, and thus her estate, did not retain any ownership of the transferred assets.
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Avoid fight or flight, talk through differences.
Stephen R. Covey
Leadership consultant and author
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The IRS released its annual list of the twelve most egregious tax schemes and scams affecting American taxpayers.
According to the IRS, the twelve most egregious tax schemes and scams affecting American taxpayers include:
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An individual who received $160,000 from her employer one month after she became president of the company was required to include the amount in taxable income as a bonus.
Larsen v. Commissioner.
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A taxpayer received cancellation of indebtedness income when he settled with a bank for less than the amount owed on his credit card.
Payne v. Commissioner.
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The best years of your life are the ones in which you decide your problems are your own. You do not blame them on your mother, the ecology, or the president. You realize that you control your own destiny.
Albert Ellis (1913-2007)
Psychologist
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The new safe harbor provides that an amount deducted for the tax year will be deemed not to distort income if that amount, added to the amounts deducted in the tax year as materials and supplies for units of property costing $100 or less, is less than or equal to the lesser of: (1) .1 percent of the taxpayer’s gross receipts for the tax year; or (2) 2 percent of the taxpayer’s total depreciation and amortization for the tax year.
The proposed rules define materials and supplies as tangible property that: (1) is not a unit of property; (2) is a unit of property with an economic useful life of twelve months or less; or (3) is a unit of property that costs $100 or less.
The proposed regulations identify a number of specific examples of capital expenditures. These include amounts paid:
The proposed regulations provide that the following transaction costs be capitalized:
Routine maintenance activities that can be currently expensed include recurring activities that a taxpayer expects to perform more than once over the class life of the property as a result of the taxpayer’s use of property to keep the property in its ordinary efficient operating condition.
The general rule focuses on betterments to the condition of the property, the costs of which should be capitalized as an improvement if the betterment is material, regardless of whether the betterment increases the fair market value.
An amount paid results in a betterment if it: (1) ameliorates a material condition or material defect that previously existed; (2) results in a material addition to the property (including a physical enlargement, expansion, or extension); or (3) results in a material increase in the capacity, productivity, efficiency, strength, or quality of the property or its output.
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An optimist is one who sees an opportunity in every difficulty.
A pessimist is one who sees a difficulty in every opportunity.
L.P. Jacks (1860-1955)
Educator and cleric
______________CEO is $224,000
CFO is $135,000
COO is $163,000
CTO is $147,000
CIO is $162,000
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True heroism is remarkably sober, very undramatic. It is not the urge to surpass all others at whatever cost, but the urge to serve others at whatever cost.
Arthur Ashe (1943-1993)
Tennis Champion
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A couple was entitled to deduct part of a loss on the sale of their residence because it included a workshop they had added for use in their woodworking business.
Mallin v Commissioner.
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RESULT: An individual did not engage in his direct marketing activity for profit and could only deduct expenses to the extent of his income from the activity. Eder v. Commissioner
STORY: Robert Eder was employed on a full time basis as an engineer at Abbott Laboratories, receiving an annual salary of $85,000. While employed at Abbott, Robert became an independent distributor for Reliv International, a network marketing company that sells health care products.
Until preparing for trial, Robert had never prepared a business plan for his Reliv activity, nor had he calculated a break-even point showing how much future profit he would need to recoup of his past losses. He maintained no organized record-keeping system. On his Schedules C for the tax years 1997 through 2005, Robert reported net losses from his Reliv activity ranging from $2,700 to $12,000. The IRS issued a notice of deficiency with respect to Robert’s 2002 tax year, determining that he was not engaged in the Reliv activity for profit that he was entitled to claim deductions for operating expenses only to the extent of his gross income from the activity.
The Tax Court held that Robert did not engage in the sale of Reliv products with a good faith expectation of profit and could only deduct his expenses to the extent of gross income from the activity. The court concluded that the manner in which Robert carried on his Reliv activity strongly suggested that he was not primarily concerned with realizing a profit.
The court noted that Robert only spent several hours each week on is Reliv activity while earning substantial income from his full-time employment. Further, he was a long-time user of Reliv products and the court felt that the ability to buy the products at a discount was a significant motivating factor for Robert’s business. From this record, the court concluded that Robert did not engage in his Reliv activity for profit.
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Our business in life is not to get ahead of others but to get ahead of ourselves--to break our own records, to outstrip our yesterdays by our own today.
Stewart B. Johnson
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WARNING: A corporation’s purchase of realty was subject to a federal tax lien because, although the corporation bought the property before the IRS perfected its tax lien, it did not record the deed until after the IRS perfected its lien.
Moco Investments, LLC v. IRS
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Knowledge will not always take the place of simple observation.
Arnold Lobel
Fables
HarperCollins
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DM Snyder, CPA, PC is uniquely qualified and experienced to help you with taxes, business planning, and business development. In addition to income tax and accounting we offer Strategic Business Planning, Income Tax Planning, Profit Maximization, Expense Reduction, and Business Acquisition and Divestiture Services. We conduct workshops focusing on the following small business topics: 1) Accounting Basics, 2) Buying and Selling Small Businesses, 3) Expense Reduction, 4) Financial Management, 5) Profit Maximization, 6) QuickBooks, and 7) Strategic Planning.
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