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Tax Tips Newsletter
Serving you since 1993
February 2012 - Vol 7, Issue 2
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Now that tax season is getting underway I just want to remind you that there are a lot of great resources on my website. The Taxes QuikGuide has record retention guidelines, tax filing due dates, tax rates, phase-out information and other goodies. Info Station has lots of great information on a variety of topics and there is also a section for frequently asked questions. Check it out!

It has come to my attention that some of the organizers that were mailed out did not include the questions at the beginning of the organizer. We need to have these answered by everyone so we are resending them out. Thanks for taking the time to complete these and getting them back to me with your other tax information.

Please note that we DO need copies of your property tax bills this year. Not all of the assessments are deductible and we cannot tell without seeing your tax bill.

If you love your iphone apps I want to let you know about an app that will help you keep track of your contributions. It's called DonationApp. It will keep track of item, cash and mileage donations. It uses sales data from EBay to help you figure out the value for new and used items. It's a free app so I encourage you to try it out. Just make sure that you have a printed copy of your donations so that you have a record.

Be sure to "friend" me on Facebook. I'm at Linda L. Heineman, CPA. I send out great tax tips once a week!

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If you plan to buy equipment or other assets for your business this year, be aware that the limits on what you can immediately deduct have changed.

For one thing, 100% bonus depreciation expired at the end of 2011. Bonus depreciation for 2012 is 50% of the cost of the property. Remember, too, that bonus depreciation applies only to new assets; used assets don't qualify.

Second, the maximum amount you can elect to expense under Section 179 decreases this year to $139,000. The $500,000 write-off ended December 31, 2011. To receive the full benefit of the Section 179 deduction, the total cost of all qualifying assets purchased in 2012 must be $560,000 or less. Your deduction may also be limited by the amount of your business income. Both new and used assets qualify for Section 179 expensing.

Congress may change these rules at any time. Before making business asset purchases this year, contact my office for the latest developments.
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What are the reporting requirements? They vary depending on where you live and your filing status. For example, say you're married and live in the United States, and you'll file a joint tax return for 2011. You'll include Form 8938 with your tax return when the total value of your reportable assets on the last day of 2011 is more than $100,000, or if the value exceeds $150,000 at any time during the year ($50,000 and $75,000 for singles).

In some cases, you may also need to file Form 8938 for tax year 2010.

Reportable assets include investment accounts you own that are held in foreign financial institutions, interests in foreign entities, and stocks or securities issued by foreign individuals or companies.

You've probably noticed the reporting requirements are similar to the "Report of Foreign Bank and Financial Accounts" (FBAR), a separate return you may already be filing. Be aware the new Form 8938 does not replace the FBAR, which you'll still need to complete by June 30.

Penalties for failure to file Form 8938 start at $10,000. We urge you to contact me so I can help you evaluate your filing requirements for foreign investments.

Congress may change these rules at any time. Before making business asset purchases this year, contact our office for the latest developments.
Winter Reflection
Tax Tip of the Week:If you are a caregiver, you may be entitled to some additional tax breaks. In this context caregiver means you are taking care of someone in your household. There are some deductions that yuo may not have thought about so please read this article.

Business Tip of the Month. Getting that dreaded letter from the IRS to let you know you've been selected for an audit, will make anyone tense up!! You can be prepared with having all your documents in order when you do your return so it won't be as traumatizing. Read this article for some handy tips.

Financial Tip of the Month: Whether you are close to retirement or not, unless you're an investment wizard, it's difficult to know what to do with your portfolio. Now add another fund to the mix - read this article to find out if "life cycle funds" are for you.

Fraud Alert. In these days of mobile electronic devices, thieves out there can steal your identify, funds, and livelihood by stealing the device. Most of us carry one of these devices with us at all times - be aware of where you use these and who is around you. Read this article for some helpful tips when using any of these in public.

https://www.facebook.com/pages/Linda-L-Heineman-CPA/266124360085715?ref=tn_tnmn

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Sincerely,
Linda Heineman
Linda L. Heineman, CPA

phone: 626-577-0979