It’s that time of year, and our tax newsletter is here…
This year’s tax newsletter is full of information for both individuals and businesses. Read about changes affecting Education, the Affordable Care Act, Minimum wage, tax tips and more!
Click to Download
It’s that time of year, and our tax newsletter is here…
This year’s tax newsletter is full of information for both individuals and businesses. Read about changes affecting Education, the Affordable Care Act, Minimum wage, tax tips and more!
Click to Download
Identity theft is a big problem. In fact, this year it took the number one spot on the IRS Dirty Dozen scam list. In an effort to help victims reclaim their identity, the IRS announced the nationwide expansion of a program that helps law enforcement officials obtain the tax return data they need to support their local investigations and prosecutions. Because the pilot program went so well, the IRS decided to expand it.
And, just as a reminder that anyone can end up a target of identity theft…the Chicago Tribune recently reported that Chief Justice John Roberts became a victim of credit card fraud.
Bill Romanowski had a lucrative 16-year NFL career, but it seems retirement is proving to be less fruitful. According to AccountingToday, when the Five-Time Super Bowl Starter retired, he found his way into a tax-shelter scheme. Romanowski decided to invest $13,092,732 in a horse breeding-program, which would allow him to offset his taxable income from 1998-2003. The only problem is, his horse-breeding income didn’t allow him to utilize the losses against the income.
According to Forbes, Romanowski was denied his claim because he didn’t enter into horse breeding with the intention of making a profit. Therefore, his activity qualified for the hobby-loss rules and his expenses could only be deducted up to the amount they would have generated income.
The IRS announced that they will be doing compliance checks on some organizations that declare themselves tax-exempt under section 501(c)(4), (5) and (6). Please note, the questionnaire is optional and you are only eligible to complete it if you receive a letter in the mail from the IRS that includes a PIN, password, and source ID.
According the IRS, responses will help them understand these self-declared organizations and help to determine if they complying with the law
Employers – If you have 25 or more employees at any one time in a quarter, you must file form UIA 1028 electronically. The deadline to file is April 25th, and in order to file electronically you must be registered on the michigan.gov website. If you have not registered yet, please be sure to visit michigan.gov and complete the Michigan Web Account Master (MIWAM), as soon as possible.
Melissa Miller
Payroll Specialist
231.924.8052
melissam@hscompanies.com
Lindsay Lohan might not be "winning" despite Charlie Sheen paying off a large chunk of her tax bill.
At least that’s what worked for Lindsay Lohan. AccountingToday published that the starlet reportedly owes $233,904 in unpaid taxes to the IRS. Sheen found out about the massive debt while the two were filming Scary Movie 5, and he offered to help with the tax leins; however, Lohan declined at the time.
Lohan later decided to accept the cash from Sheen and applied his $100,000 check to her outstanding debt. According to Forbes though, neither Lohan nor Sheen may be “winning” on the transaction. Because of rules regarding large cash gifts, Lohan may be liable for $35,000 in income taxes on the money, or if Sheen declares the money as a gift, he could be liable for gift tax.
To learn more, read Charlie Sheen Pays $100,000 of Lindsay Lohan’s Tax Debt.
The election will have a large impact on tax legislation.
As the presidential race heads into the fall both candidates are campaigning hard. Many analysts have said this election will come down to the economy. With that in mind, let’s review each candidate’s position on matters that affect small business.
Code Sec. 179
Currently covers qualifying new property placed in service before January 1, 2013. Dollar limit: $139,000; Investment limit: $560,000
President Obama: Has not addressed
Mitt Romney: Has not addressed
Bonus Depreciation
Currently allows for 100% depreciation for qualified investments made after September 8, 2010 and before January 1, 2012
President Obama: Has proposed extending 100% bonus depreciation
Mitt Romney: Has discussed extending bonus depreciation, but has not indicated a percentage
Research Tax Credit
Currently allows those who participate in research to calculate this credit using the alternative simplified credit method
President Obama: Proposed to make this credit permanent and to increase the alternative simplified credit to 17%
Mitt Romney: Proposed to make this credit permanent
Code Sec. 199 Deduction
Currently allows a qualified taxpayer to deduct an amount equal or less than the phased-in percentage of taxable income or qualified production activities income
President Obama: Proposed to exclude oil, gas, coal and other producers of hard mineral fossil fuels from this credit
Mitt Romney: Has not addressed
Carried Interest
Currently allows general partners in private equity and hedge funds to charge limited partners a percentage of the fund’s earnings, aka, carried interest, which is characterized as a capital gain
President Obama: Proposed to tax as ordinary income with special rules for partners
Mitt Romney: Has not addressed
They’ve also both taken stances on things like individual rates, deductions and credits, estate tax, and the corporate tax (which we reviewed here).
Tax planning early will be difficult this year, as the presidential election will have a significant impact on tax law. Be sure to check out our October newsletter for even more tax planning ideas that may impact your tax situation for 2012.
Source: CCH Tax Briefing
The election will have a large impact on tax legislation.
Source: CCH Tax Briefing
The UIA launched their new site for employers to manage their unemployment tax accounts
As of August 14th Michigan Employers have a new tool for managing their unemployment tax accounts. The Employer Web Account Manager has been upgraded and rebranded as the Michigan Web Account Manager, which made its public debut yesterday (Tuesday, August 14th). Among the changes, employers can now file tax reports and make payments the same day that they establish an account, create employer representative profiles with varying level of access, and receive their notices and letters electronically.
To learn more read, Michigan Web Account Manager (MiWAM) is Live. From this link you can review recent communications, access the MiWAM toolkit, and access the new account manager.
Sue Murray
Certified Public Accountant
989.779.7799
suem@hscompanies.com
