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BUSINESS UPDATE LETTER - CHANGES
Congress Passes a Two-Year Extension of Bush-Era Tax Cuts and approves a Tax Relief Bill.
The following changes occurred as a result of the bill that Congress passed and the President is expected to sign.
Payroll Taxes:
The 2010 Tax Relief Act reduces for 2011 the employee-share of Social Security taxes from 6.2% to 4.2% up the maximum taxable wage base of $106,800. The maximum annual tax would be $4,485.60. The employer-share remains at 6.2%.
Self-Employment (S/E) tax:
Self employed individuals would pay 11.3% on the first $106,800 of self-employed income, 2.9% on any amount above that limit. S/E tax up to the threshold is $12,068.40.
Bonus Depreciation:
The 2010 Tax Relief Act boosts 50-percent bonus depreciation to 100-percent for qualified investments made after September 8, 2010 and January 1, 2012.
For a complete summary of the Tax Relief Act of 2010, see the following article below.
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Congress Passes Two-Year Extension of Bush-Era Tax Cuts, Payroll Tax Relief, Estate Tax Compromise
House Democrats and Republicans spent hours blaming each other for Congress' failure to address the nation's growing federal budget deficit before passing an $858-billion measure to extend the Bush-era tax rates, provide unemployment benefits, patch the alternative minimum tax and provide a two-year break for inheritance taxes.
Lawmakers approved the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (HR 4853) by a vote of 277-to-148 on December 16, even though the measure is not paid for and will add to the deficit. The final vote came after lawmakers voted down an attempt by liberal Democrats to provide a less generous tax rate for wealthier estates, which would have sent the measure back to the Senate for additional work. Lawmakers rejected the amendment, offered by Rep. Earl Pomeroy, D-N.D., by a vote of 233-to 194.
On December 15, the Senate passed the tax measure, which represented a bipartisan agreement by President Obama and Senate Republicans to prevent tax rates from rising and unemployment benefits from ending on January 1, 2011. However, the bill's passage in the House was not as certain since some Democratic lawmakers were upset that the agreement broke the president's campaign promise to limit tax relief to only those earning under $250,000. The highly contested pact with Senate Republicans caused problems with lawmakers from both parties, however, with more than half of House Democratic caucus members voting against the bill. GOP lawmakers, who complained that the unemployment benefits in the bill would add to the budget deficit, supplied the remaining votes for passage. The measure now heads to the White House where Obama is expected to sign it. For more details on the bill, click here:Tax Relief Job Creation Act of 2010
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Paperless Office: QuickBooks and Peachtree Documentation Options
The latest versions of QuickBooks and Peachtree Accounting software have the option to attach documents to each transaction that you enter. Have you ever wondered "what was that check for?" Or perhaps we asked you that question! This feature allows for instant access to backup documents eliminating the need to keep files or worry about how long to keep records in storage.
In order to save documents and attach them to a transaction you will need to scan them first, unless what you are attaching is a word processing or spreadsheet document. Both QuickBooks and Peachtree require the transaction be either completely entered or saved before you can attach a document to the transaction. This feature is available for every transaction - from deposits to invoices to entering bills and even journal entries. Both software packages have an "Attach" icon with a paperclip graphic located on the right hand side of the transaction window.
QuickBooks stores the documents off-site and provides this as a service - free up to 100MB of data (about 2000 2-page Adobe Acrobat "PDF" files). There is a monthly fee that increases depending on how much you have in terms of storage requirement.
Peachtree stores the files on your local drive or server. This eliminates any space requirements or fees. However you must make sure your backup systems are in place and working properly to protect from any loss of data.
For more information on these features call us or go to the QuickBooks or Peachtree web pages that refer to this feature.
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Knowing your Business
Call us today to discuss where your business stands compared to industry averages. We can provide you with a comprehensive report that compares your company to itself from prior years and with industry standards along with analysis and trends.
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