A Word From Michael
Yes it's that time again; time to prepare your 2009 taxes which are due April 15, 2010 for individuals and March 15, 2010 for many corporations.
This year there are many changes to the tax laws as enacted by Congress as a result of the American Recovery and Reinvestment Act of 2009 and the Worker, Homeownership and Business Assistance Act of 2009, and many other tax provisions that affect the 2009 and 2010 tax years.
Some of the changes include extensions of expiring provisions and some new laws:
- First Time Homebuyer Credit extended. The credit is 10% of the cost of the home, up to $8,000 if purchased in 2009 or 2010. Must have purchased by 4/30/10. Must be principal residence, and first home purchased within 3 years or have owned previous home 5 of 8 years. Members of the military & certain other federal employees serving outside of the United States have an extra year.
- The first $2,400 of unemployment benefits is tax-free per taxpayer.
- The Mortgage Debt Relief Act of 2007 allows taxpayers to exclude income from the discharge of debt on their principal residence. Applies to debt discharged 2007-2012.
- Real Estate Tax deduction for those who do not itemize: $500 single; $1,000 joint.
- Sales Tax paid on a new motor vehicle deductible regardless of itemized or standard deduction, up to $49,500 of the purchase price of the new vehicle.
- The Residential Energy Credit has been reinstated for 2009 and 2010.
- Standard business mileage deduction increased to $0.55/mile; it will be $0.50 for 2010.
- Tax-Free direct distribution from IRA to charity.
- The Hope Credit has been expanded and increased to $2,500/year for all 4 years.
- Up to $250,000 in the first year expensing of business equipment. Also, 50% bonus depreciation of equipment available.
- Expanded Net Operating Loss (NOL) Carryback options for most businesses.
We also hope you took or will take advantage of year-end tax savings by:
- Selling losing stock, this could generate up to $3,000 in deductible losses.
- Setting up a Section 529 plan for future college tuition and tax savings.
- Reviewing your Flexible Spending Account (FSA) and using any remaining balance.
- Keeping records and receipts which substantiate any contributions of non-cash items to non-profit organizations (including clothing, furniture, vehicles etc.)
I, along with my staff—Michelle, Renee, Trisha, & Eileen look forward to seeing our returning clients, as well as new clients this tax season may bring.
Sincerely,
Michael A. Galer
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START YOUR ENGINE...
Staying on the Right Track
...Record Expenses
So what's the best way to keep
good records? It doesn't have to be complicated. Use any recordkeeping
system suited to your business that clearly and accurately
shows your income and expenses.
Your tax records must back up all the tax deductions and credits
you claim on your tax return. Keep careful track of all your
income and where it comes from. It's important to separate
your business and personal receipts and your taxable and non
taxable income.
Be careful if you transfer some of your personal funds into
your business account, essentially making a "loan"
to the business. Keep complete records of the transaction
so that you don't include the money in your taxable business
income by mistake.
Record Expenses
Record your expenses when you actually incur them. It's easy
to forget about some of last year's expenses when your filling
out your tax return. Overlooking deductible expenses can cost
you.
Car Expenses
Its' important to get into the habit of recording
your business milage at the time you actually use your car.
Try keeping a log book in the glove compartment and jotting
down the milage at the beginning and end of each business-related
trip. Record parking fees and tolls, and save your insurance
and repair service.
Payroll Taxes
If you have employees, you must keep all records dealing with
federal employment taxes for at least four years. Make sure
your records include your employer identification number,
the confimation number or tax record from any electronic payments,
copies of the tax returns you filed, and the dates and amounts
of all the employment tax deposits you have made.
Keep track of your employees' social security and Medicare(FICA)
taxes and income tax withholding in the same way: record the
date and amount of the taxes you withheld.
You must also keep a record of federal unemployment (FUTA)
tax you paid. Record the total amount you paid for each employee
and the amount you paid into the state unemployment fund.
Meals and Entertainment
Keep all business-related meals and entertainment receipts.
Indicate the exact business reason for these expenses. Remember,
most meals and entertainment expenses will be limited to 50%
of expenses incurred.
Michael A. Galer, CPA, CFP®
Resource: IRS Publication 1518(Rev. 6-2001)
Catalog Number 1235oz
(Extract from: The Quickfinder Handbook TMI Tax Services,
Inc.)
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DEAR CLIENTS & PROSPECTIVE CLIENTS
I am authorized by the Certified Financial Planner Board of Standards Inc. (CFP Board) to use the CFP®, CERTIFIED FINANCIAL PLANNER ™ certification marks in accordance with CFP Board certification and renewal requirements.
These marks identify those individuals who have met the rigorous experience and ethical requirements, have successfully completed financial planning coursework and have passed the CFP® Certification Examination covering the following areas:
- The financial planning process
- Risk management
- Investments
- Tax planning and management
- Retirement and employee benefits
- Estate planning
CFP® certificants must also agree to meet ongoing continuing education requirements and to uphold CFP Board's Code of Ethics and Professional Responsibility and Financial Planning Practice Standards.
I am pleased to add the certification of CERTIFIED FINANCIAL PLANNER ™ practitioner, as it is in accordance with my commitment to providing my clients with a full range of financial services. I can help you meet all of your personal and business tax and accounting needs, please call to discuss financial planning issues, includin:
- Estate planning and consultation
- College planning
- Retirement plan funding (personal and business)
- Investments
- Life insurance needs (personal and business)
Sincerely,
Michael A. Galer
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"Let me start by saying
I wish I had your imagination..".
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Tax Tips...
Don't Miss the Date
Avoid penalties and interest-
check the tax due date,
then file and pay on time.
Get It Right
Know your rights as a taxpayer:
If you cannot pay all of your
tax
when it is due, you may be able
to make monthly installment
payments.
Did you know?
The IRS will not disclose to
anyone
the information you give the IRS,
except as authorized by law.
Do you have a question
about taxes?
E-mail us your tax questions for
"Tax Tips"
Resource: IRS
Publication 1518(Rev. 6-2001)
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"The
Quill": Winter Edition