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Tax Tips Newsletter
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August 2011 - Vol 6, Issue 8
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Greetings!
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I hope you have been having a wonderful summer. There are so many wonderful activities to enjoy with the long days and warm nights.

For those clients who love to try out the latest technology, QB Mobile can sync to Quickbooks Online. That way you can always have access to your Quickbooks accounting software. I already have one client using this and he really loves it. He really can run Quickbooks from his smartpbone.

Having said that, Quickbooks Online is NOT the same product as any other version of Quickbooks. There WILL be some features of Quickbooks that you would lose by making the switch, so please call us before you do anything.

Just a reminder that if we are preparing a return for you for a business or trust, we would like to have your information in our office as soon as possible. We have quite a few returns on extension and want to be able to get your returns to you on a timely basis. The filing deadline for these returns is September 15, 2011, but we need your information by August 15.

Taxes with flag
There are several tax breaks slated to end after this year. Make time to review your tax situation now to see if you can take advantage of any of the following to lower your 2011 tax bill:

* the option for deducting state and local sales taxes in lieu of deducting state and local income taxes.

* the above-the-line deduction of up to $4,000 for higher education expenses.

* the above-the-line deduction of up to $250 for classroom supplies purchased by teachers.

* the option for taxpayers 70½ or older to make tax-free contributions of up to $100,000 from an IRA to charity.

Also, don't forget to check your exposure to the alternative minimum tax (AMT) for 2011. The "Tax Relief Act of 2010" increased the AMT exemption amount for 2011 to $48,450 for single taxpayers and to $74,450 for couples. The AMT is a separate tax calculation originally designed to apply only to the wealthy. In recent years, the AMT has begun to hit even middle-income taxpayers.

Call me if you would like to schedule a review to discuss the best 2011 tax-saving strategies for your individual situation.
Time to give to charity
Last year's tax law extended the "charitable IRA rollover" rule through the end of 2011. Taxpayers who are 70½ or older may make tax-free distributions of up to $100,000 directly to a charity from their IRA. The rollover fulfills the required minimum distribution (RMD) rule, and the rollover amount is not included in taxable income.

If you or someone in your family could qualify to make a charitable IRA rollover, should it be considered? Here are some of the situations in which this tax break could be beneficial.

* You have to take the RMD, but you don't need the money and you don't want to pay tax on the distribution.

* You want to give to charity, but you don't itemize deductions so any contribution you make would not be tax-deductible.

* You do itemize deductions, but your charitable contribution deduction would be affected by the 50%/30% of AGI limit.

* Having to include your RMD in income would result in the phasing out of other deductions and credits based on adjusted gross income.

The charitable IRA rollover is a powerful tool for tax planning. But remember, as it now stands, this provision will expire December 31, 2011. Give me a call if you would like to analyze whether this option makes tax sense for you or a family member.
Summer landscape
The Tax Tip of the Week. Here's a great article to keep you up-to-date on your retirement accounts. Know what the terms mean before you make any changes.

The Business Tip of the Month. Are you thinking of hiring a family member for your business? You want to be sure they're a good fit for your business so here are some helpful tips to help you decide.

The Financial Tip of the Month. Is renting or buying a house right for you? Here are some tips to help you to think about and decide what is right for you before signing up for a big debt.

The Fraud Alert. Even in death the crooks and cons are out to defraud us! Having a plan set when you've had the time to research the options will alleviate your family of being defrauded at a very emotional time. Here are some tips to help you get your plans in place.

Photos © Bigstockphotos.com, istockphoto.com, Felix Orona

Sincerely,
Linda Heineman
Linda L. Heineman, CPA

phone: 626-577-0979