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The tax law changes so often that it's easy to lose
track of current rules. As you make business purchasing
decisions this year, keep these facts in mind.
* Bonus depreciation is available only for NEW equipment purchases. 50% bonus depreciation can be taken on purchases made in 2010 through September 8. On purchases made from September 9, 2010, through December 31, 2011, 100% bonus depreciation can be taken. In 2012, bonus depreciation reverts to 50%. * First-year expensing under Section 179 is available
for both NEW and USED equipment purchases. The
expensing limit for 2010 and 2011 is $500,000, with a
reduction once purchases exceed $2,000,000. In 2012,
the expensing limit is scheduled to revert to $125,000,
with a dollar for dollar reduction once purchases
exceed $500,000.
* Effective for 2010 and 2011, certain leasehold and
retail improvements and restaurant buildings and
improvements qualify for 15-year depreciation. Some
may also qualify for bonus depreciation and/or first-
year Section 179 expensing. The rules determining
eligibility are complex.
For help in deciding how to maximize the tax benefits available for your business purchases, give me a call. |
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U.S. citizens and residents (including individuals, corporations,
partnerships, trusts and estates) who have a financial interest in or
signature or other authority over any financial accounts in a foreign
country are required to make a separate filing if the aggregate value of
these accounts exceeded $10,000 at any time during 2010. Filing
requirements also apply to those with direct or indirect control over a
foreign or domestic entity with foreign financial accounts, even if the
taxpayer does not have foreign financial accounts of its own. Foreign
financial accounts include a wide variety of items, such as:
- Bank Accounts
- Securities
- Mutual Funds
- Credit Cards
- Retirement Plans
- Life Insurance
Because both persons with a financial interest and persons with signature authority are required to submit filings, a single account can require multiple filings. For example, a corporate-owned foreign account would require filings by the corporation *and* by the individual corporate officers with signature authority. Unfortunately, the rules do not permit one person to submit a filing on behalf of others. These filings must be made by June 30, and the time for filing is *not*extended by a tax return extension. There are severe civil and criminal penalties for non-compliance of these filing requirements. Even an inadvertent failure or incomplete filing can result in a $10,000 civil penalty, and the IRS has announced that it intends to enforce these penalties. I am able to assist you in the preparation of these foreign account filings if you request. These services are beyond the scope of normal tax return preparation and will result in an additional fee. If you would like me to prepare these filings, or if you have questions concerning your filing obligations, you should answer "yes" to the question on the organizer and provide me with all requested information. |
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Will you be among the thousands of taxpayers who get a
big tax refund this year? While most Americans happily
accept their tax refund checks, smart taxpayers
understand that refunds actually cost them money.
Here's why:
* The government pays no interest on refunds. Kept in your hands, those dollars could have been productive. For example, you could have invested the money or used it to pay off your debt during the year. If the money had been added to a 401(k) plan, tax would have been deferred on both the investment and its earnings. Even better, your employer might have matched all or part of your investment, adding to your retirement savings. * Refunded cash is not available for use until actually
received. Even though most taxpayers get their checks
promptly, circumstances or errors can delay (or stop)
a refund.
To prevent losing money on tax refunds, consider reducing your withholding or estimated tax payments. For most taxpayers, withholding must equal either the prior year's tax or 90% of the current year's liability. If your annual income changes little, it's relatively easy to avoid overwithholding. You should consider filing a revised Form W-4 withholding statement with your employer if you're having too much withheld. For taxpayers with fluctuating income or multiple sources of income, the problem is more complex. The IRS provides a worksheet with Form W-4, but many people find the form complicated. If you'd like assistance adjusting your withholding, contact my office. |
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The Tax Tip of the Week has to do with "ROB Plans" regarding funding a start up business using retirement accounts. (Generally not a great idea.
The Business Tip of the Month. Is your business prepared for a natural or man-made disaster? Here are some tips to develop a comprehensive recovery plan so that your business won't be a disaster statistic. The Financial Tip of the Month. Are you an average investor and very leery of the stock market? Read up on why index funds may be the answer for your investment portfolio.
The Fraud Alert. Do you buy your prescription medications from an online pharmacy? Read up on the drug scams on the Internet that could be detrimental to your health. |
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Photos © Bigstockphotos.com, istockphoto.com, Felix Orona
Sincerely,
Linda Heineman
Linda L. Heineman, CPA
email:
linda@llhcpa.com
phone:
626-577-0979
web:
http://llhcpa.com
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