January 2012 Tax & Business Tips

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In This Issue

Have Any Stock Transactions In 2011?

Greetings!

The New Year and Tax Time are here. Let us know if there is any way that we can help you and your business out. If you know of any individual or business that could use our help we would love to help them out as well. The best compliment you can give is a referral. We will continue to keep you up-to-date on any useful tax tips, business tips, or tax law changes. You can find all the articles in this newsletter and more on our blog. We look forward to working with you and wish you much success in 2012.

Thanks and Have a Happy New Year!!

NEW YEAR BUSINESS CHECKLIST

ARE YOU FOLLOWING ANY OF THE ITEMS ON THE LIST?

Well, here we are at the start of a new year. This is the time of year that businesses make their yearly goals and set up new procedures. Below are some items we feel can help your business run smoothly and avoid some costly mistakes. Also, following some of these procedures now will make your life easier during year-end tax planning and tax time reporting.

BUDGET

Has your business sat down and set up a budget for the new year? The business should sit down and look at their projected revenues and then allocate each dollar of those projected revenues into a zero-based budget. A zero-based budget is where you take all of the income brought in and give it a specific category (expenses, debt, savings). A zero-based budget is a great way to help a company keep track of their expenses and stay on track. This can also help a company see where they can pay down their debt and or stay out of debt. It's one thing to "do the budget", but it's another for the company to stay disciplined and actually follow the budget.

BUSINESS MILEAGE (55.5 cents/mile 2012)

Now is the best time to go out to your vehicle and write down the mileage. Write down the mileage now and and at the end of the year. Keep a calendar of your business travel. There are a lot of useful apps for smart phones out there that can help you keep track of your mileage. Get in the habit of logging your mileage so that you don't play a guessing game at the end of the year and you are protected if ever audited.

ELECTRONIC PAYROLL TAX DEPOSITS FOR DECEMBER (IRS EFTPS site)

This week and next week businesses will be making their payroll deposits from December, if you are doing payroll yourself make sure that you select Dec 2011 for your December 941 Deposit. Also, when making your 940 payments for 2011 make sure you select 2011. Because we are in a new year, the defaults on the IRS EFTPS website are for 2012. Don't worry if you accidentally make this mistake as you can cancel the payment, but this must be done immediately. So make sure you review your confirmations. Also, if you are using QuickBooks to do your payroll, make sure that you are clicking payroll update every month.

IRS FORM W-9

Every business should get in the habit of giving W-9's to those they pay for services. W-9's are IRS forms requesting those you pay for services their taxpayer identification. Based on the information they fill out and how much you pay them throughout the year then determines whether or not you have to issue them a 1099. It is a good habit to have the person fill out the W-9 prior to giving them their first check. This saves time during tax time and you see that you need to give them a 1099. You would be surprised at how fast someone can disappear or have memory loss when trying to get the 1099 information during tax time.

IRS FORM W-4

Employees have life changes during the previous year so it is helpful to update your employees W-4's they have filled out in prior years. It is good to also make sure that you have a W-4 on file for all of your employees.

Make sure that your goals, budgets, and ideas for the upcoming year are clearly written down. Stick to them and make sure that they truly are your goals for the new year and not just your January to-do list. We would love to hear from you, let us know what ideas you are working on to help make your business more effective for this new year. You can leave reply to this newsletter or contact us

NEW 2011 1099-B

Did you have any stock transactions in 2011?

This Mid-February everyone will get a nice surprise when they open up the newly revised 1099-B from their brokerage accounts. Regulations are requiring that brokerages keep up with and report cost basis information on securities bought and sold after January 1, 2011. Prior to the brokerage firms keeping up with the cost basis, it was up to the taxpayer to keep up with this and report their gains and losses to the IRS. This was a nightmare for those preparing tax returns where the taxpayer was too busy to keep up with their cost basis on stocks purchased over a long period of time. To make the matter worse, clients that went from brokerage to brokerage would lose information on their original purchases. The new rules will help both tax preparers and taxpayers when it comes to the reporting of gains/losses in stock sales. As part of an ongoing process of making the brokerage firms keep up with cost-basis on stock sales, the 2011 1099-B will feature several new changes such as a box for date of acquisition, cost basis, amount of loss disallowed due to wash sale, whether the property sold is a non-covered security, and whether the gain or loss is long-term or short-term. If you have any questions when you receive your 1099-B you can contact us and we will be more than happy to help you out.

TAX HUMOR