Dear Clients and Friends -
We want to wish you a Happy Spring and Easter season, even if it doesn't look or feel very spring like right now. The tax season filing deadline is rapidly approaching, but it hasn't kept us from keeping the education flowing to our customers and community. Below is a sampling of some of our more recent blog posts. We hope you enjoy this offering and learn something useful for you/your business or to pass along to a friend.
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1. Refinancing your Residential or
Commercial Loan
If you haven't recently considered a refinance of the loan on your home, 2nd home or commercial property, now is still a good time. Rates and loan fees are historically still quite low, and banks at least say they have money to lend, so maybe it's a good time to find out! Generally speaking if you can save at least one point (percent), relative to your existing loan rate, then the cost and hassle factor of refinancing are probably worth it.
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2. Education Costs - Income Tax Benefits
Generally speaking, "qualifying education costs" are eligible for either a credit or a deduction on the tax return that the student is claimed on. The main thing is that the student and his or her parents take the time to consider which return the student, and associated credit or deduction, should be claimed on, in order to optimize the overall tax benefit. Far too often the student, or sometimes the parent, is in such a rush to obtain a refund of taxes that they file their tax return without considering the significant tax benefits that can be obtained from reporting the student's education costs properly. Please contact us if you have any questions!
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Reminders - if you are a business owner that pays service providers, a landlord and certain professionals, remember to review the requirements for Form 1099 reporting and require those you do business with during the year to complete a Form W-9.
Updates - the local City of Shelton and Mason County sales tax rates are increasing by one tenth of one percent on April 1, 2012. Also, for those using their vehicles in their business, the 2012 IRS business mileage rate is 55.5 cents per mile, so if you are a business owner and use the mileage rate method to account for your vehicle use, or if you are an employee and are eligible to be reimbursed for mileage at the IRS sanctioned rate of reimbursement, this is the current mileage rate cap.
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4. Payroll Tax and Unemployment
Benefit Extensions
Good news for those who are employed, as well as for those who are unemployed. Those who are employed will see a continuation of the payroll tax "holiday", so that through the end of 2012 the FICA rate will remain 4.2% on wages earned, as compared to the typical rate of 6.2%. For those who are unemployed the Federal government will fund unemployment benefits for those states that can't pay for a continuation of unemployment benefits, so that states can continue to provide benefits for the long term unemployed - read more. Of course the best news of all is that more jobs are being added to our national economy, and according to most economists the trend, albeit at a slow pace, should continue as we move through the year - read more.
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5. State of Washington Sales and Use Taxes If your company is registered with the State of WA's Department of Revenue to be a "reseller", it's extremely important to distinguish between purchases your business makes with the intention of reselling them, versus purchases your business intends to utilize in your business. If you don't understand the rules, or have any questions about how they specifically apply to your company, please contact us!
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6. Independent Contractor Status and
1099 Reporting
If you are a business owner it's extremely important to understand up front whether those you pay for services are independent contractors, versus employees. Don't leave your business or yourself open to the possibility of having those you thought to be independent contractors reclassified as employees, but instead become informed as to the specific rules/requirements of both the State of WA and the Federal government.
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7. Contact Us - We are Here to Assist You!
Please don't hesitate to contact our office if you have any specific questions and/or concerns that we can assist you with.
Best Regards,
Wittenberg CPA, PS
. . . . .
360-426-0230
info@WittenbergCPA.com
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