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Tax Tips Newsletter
Serving you since 1993
March 2012 - Vol 7, Issue 3
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Friday, March 16 was the official "cut-off"day for individuals to get their information to me for the April 17th deadline. if you have not gotten your tax information to me yet, please do so as soon as possible. I still may be able to get your returns done on time.

To save time and money, please use the organizer that I sent you. It will really save us time in preparing your returns in that it reminds you what information you need to give me.

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

Tax Breaks
Congress passed an extension of the 2% payroll tax cut that had been scheduled to expire at the end of February. The extension means 160 million working Americans will continue to pay social security tax on their wages at a 4.2% rate for the rest of 2012, rather than at a 6.2% rate.

Because Republicans and Democrats were unable to agree on how to pay for the extended tax cut, the law included no spending cuts to offset the estimated $93 billion cost of this provision.

The law also provides for long-term federal unemployment benefits, setting the maximum at 73 weeks in states with the worst unemployment and 63 weeks for other states.

Another provision in the law includes the so-called "doc fix" that prevents a scheduled 27% reduction in Medicare payments to doctors.

The unemployment benefits and doctor payments will be paid for by government sales of broadband spectrum, requiring federal workers hired after this year to contribute more to their pensions, and cuts in certain health programs.
President Obama signed the bill into law on February 22.
Happy Businessman
Your small business might be ignoring a credit that could lower your tax bill. According to the IRS, many companies that might qualify for the credit have failed to take it.

Check the three general tests to qualify for this credit:

* Employing fewer than 25 "full time equivalent" employees.

* Paying average annual wages of less than $50,000.

* Paying at least 50% of health insurance premiums for employees.

If you qualify, you can use this tax credit to offset your federal income tax liability by up to 35% of the cost of health insurance premiums you pay for employees. Since this is a tax credit, not a deduction, it will reduce your tax bill dollar-for-dollar.

.For assistance in determining eligibility for this tax credit and in doing the calculations to obtain the credit, contact my office.
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Tax Tip of the Week: Were you one of the thousands who went through a foreclosure on your home last year? You may have some tax consequences for your 2011 tax return; make sure you bring in all the forms that you've received from the foreclosure with your tax info. Read this article to acquaint yourself with the info needed.

Business Tip of the Month: Are you holding on to obsolete inventory "wishin' and hopin" that it's going to give you some return on your investment? Well, it may be costing you more than the loss of generating profit; you may be paying taxes on that inventory, too. This article will give you a whole new perspective on the importance of keeping your inventory current.

Financial Tip of the Month: Are you a pet lover? Our furry friends cost us money and in these tough economic times, we start looking at every dollar spent. There are some things to do to keep our pet costs down; read the article for some good suggestions. Our furry friends need us to take good care of them!!!

Fraud Alert: Are you an auction lover? Does the thrill of the bidding just put you in the zone?? Well, the scammers are out in full force in the online auction sites, such as, Ebay and Craigslist. Check out this article with some suggestions on how to prevent yourself from being scammed out of your money in the midst of the "bidding thrill."

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

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

Sincerely,
Linda Heineman
Linda L. Heineman, CPA

phone: 626-577-0979