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Suzanne LoBiondo, CPA

Christopher Cheeseman, CPA

Dear Clients and Friends,

C&L Tax and Accounting Services is pleased to bring you a new informative newsletter that will provide you with important tax changes and strategies that may affect you.

We hope that you will find this information of value, and invite you to contact us if you have any questions or would like to discuss your specific situation.

Very truly yours,

Suzanne LoBiondo, CPA and Christopher Cheeseman, CPA

Roth Conversion Opportunity

nest egg Prior to 2010, the income limits on both kinds of IRAs have prevented higher income taxpayers from making deductible contributions to traditional IRAs, or a contribution or conversion to a Roth IRA. Although you could make nondeductible contributions to a traditional IRA, the tax benefits were limited.
However, for tax years beginning after December 31, 2009, a conversion from a traditional to a Roth IRA can be made without regard to your income or filing status. Therefore, if you are a married individual filing separately, or have adjusted gross income greater than $100,000, you are no longer precluded from making a Roth IRA conversion. The elimination of the rules related to IRA conversions may provide you with a unique tax planning opportunity.

Roth IRAs grow tax-free, so any future distributions are not taxable. In addition, Roth IRAs are not subject to minimum distribution rules. However, the converted amount may be fully taxable currently, unless you have "basis" in the IRA from prior nondeductible contributions.

Although the income limitation on Roth IRA conversions is permanently repealed, there is a special tax treatment available for 2010 conversions only. Conversion income in 2010 is recognized ratably in 2011 and 2012, unless you make an election to recognize all of the income in 2010.

There are many factors to be considered before making a decision, so feel free to contact us if you feel a Roth conversion may be right for you. Please contact us at info@clcpasllp.com or 516-791-1303 to discuss your situation.

Payroll Tax Forgiveness

The Hiring Incentives to Restore Employment (HIRE) Act provides qualified employers with payroll tax forgiveness. Qualified employers are exempt from the employer's 6.2 percent share of Social Security tax on all wages paid to covered employees from March 19, 2010 (the day after the date of enactment of the HIRE Act) through December 31, 2010.

The covered employee must:

begin work for the qualified employer after February 3, 2010 and before January 1, 2011,
not have been employed for more than 40 total hours during the previous 60 days and sign an affidavit attesting to such,
not be hired to replace another employee unless the previous employee was separated from employment voluntarily or for cause,
not be a family member of the business owner,
not be a household or government employee.

If you feel you are an employer who qualifies for this exemption, please contact our office.

About C&L Tax and Accounting Services LLP

C&L Tax and Accounting Services LLP is a boutique CPA firm that specializes in meeting the tax and accounting needs of individuals and small businesses. Our experienced tax and accounting professionals offer clients insightful and strategic tax planning and compliance services that maximize savings year after year.

C&L Tax and Accounting Services LLP's offers a wide range of tax and accounting planning, compliance and consulting services for both individuals and small businesses. We invite you to peruse our capabilities and contact us for a consultation.