CPA's & Business Advisors

Important UIA Reminder for Employers

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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.

Have questions? Contact Melissa Miller, Payroll Specialist.

Melissa Miller
Payroll Specialist
231.924.8052
melissam@hscompanies.com

Tax Tips for Farmers

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Below are a few tax tips for anyone who owns or operates a farm:

  • If your crops were damaged and you received insurance payments for the damages, that money counts as income. You must report it to the IRS.
  • You can deduct ordinary expenses that are considered to be common in the farming business. Additionally, you can deduct necessary expenses that are considered necessary for business.
  • You’re allowed to deduct reasonable wages paid to your full-time and part-time employees. Be sure to withhold Social Security, Medicare, and income taxes from your employee’s wages.
  • If you purchased items for resale, such as livestock, you may be able to deduct the cost in the year of the sale, including freight charges for transporting livestock to your farm.
  • If bad weather forced you to sell more livestock or poultry than normal, you may be able to wait on reporting the gain of the sale.

 

For more information, contact Michaelia Breuker at 231.924.8072.

 

breuker-michaelia-accountant-farm-agricultureMichaelia Breuker
Accountant Specializing in Farm & Ag
231.924.8072
michaeliab@hscompanies.com

Beware of Early Withdrawal Penalties

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Removing money from your nest egg early could cost you.

Thinking about pulling money out of your retirement plan early? Below are a few things you should know about early withdrawal.

  • An early withdrawal is considered removing money from your retirement account before you reach age 59½.
  • If you decided to withdrawal your funds before age 59½, you must report the amount removed to the IRS and you may be subject to a 10% penalty on the early withdrawal.
  • You may be able to avoid the 10% penalty for the following reasons:
    • You withdrew money from a retirement account in which you paid taxes on the money before you deposited it.
    • Transferring money from a qualified retirement plan to another retirement plan within 60 days is not subject to income tax or the 10% penalty.
    • Other exceptions may be made, for example, if you need to remove money for certain medical expenses or if a taxpayer is disabled.

For more information, contact your H&S tax professional today.

Issues with IRS Form 8863 Causes Refund Delay for Some Taxpayers

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hs-companies-form-8863-delaysThe IRS released a statement that some taxpayers who filed their return between February 14th and February 22nd may experience a delay in receiving their refund due to a software glitch. AccountingToday reported that more than 600,000 returns have been affected, with a large portion of those returns being from H&R Block.

According to AccountingToday, the delays occurred due to changes to Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits). Originally, preparers were told to respond Yes or No to lines 23-26, which were added to the form this year.  The forms found in some tax software were programmed to actually require an “N” for no. The IRS is being forced to review the forms because of glitches in the programming. The IRS said it is working with affected software companies on the issue, so that no further delays occur.

If you plan to complete your own taxes, be sure to check with your software provider regarding any issues.

Please note that H&S Companies has not experienced any delays due to this issue. Remember, you can check the status of your refund via the IRS tool “Where’s My Refund”.

 

Sources:
IRS Statement on Form 8863, Education Credits 
600,000+ Tax Refunds Delayed by Education Credit Glitch 

Is All Income Taxable?

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taxable-nontaxable-income

Gifts or inheritances received is typically not taxable.

Most income you earn throughout the year is taxable, however, some is not. Income that is not typically taxable, includes:

  • Child support payments
  • Gifts or inheritances received
  • Welfare benefits
  • Damage awards for physical injury or sickness
  • Cash rebates from a dealer of manufacturer for an item you purchased
  • Qualified reimbursed adoption expenses

Be sure to include all taxable income on your tax return, including the fair market value of any items you may have bartered throughout the year.

If you have questions regarding what is taxable income, contact H&S Companies.

Source
Taxable and Nontaxable Income

Homestead Property Tax Credit Harder to Come By This Year

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Listen as H&S Companies CPA, Scott Hunt, explains why the Homestead Property Tax Credit is little tougher to come by this year.

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Want to learn more? Contact Scott today!

Scott Hunt
Certified Public Accountant
231.798.6508
scotth@hscompanies.com

Michigan's Big Changes to Taxing of Retirement Income

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Listen as H&S Companies CPA, Scott Hunt, explains the big changes to the way the State of Michigan started taxing retirement income this last year.

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Click to Listen


 
 
 
 
 
 
 
 
 
 
 

Want to learn more? Contact Scott today!

Scott Hunt
Certified Public Accountant
231.798.6508
scotth@hscompanies.com

Michigan’s Big Changes to Taxing of Retirement Income

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Listen as H&S Companies CPA, Scott Hunt, explains the big changes to the way the State of Michigan started taxing retirement income this last year.

radio_icon

Click to Listen


 
 
 
 
 
 
 
 
 
 
 

Want to learn more? Contact Scott today!

Scott Hunt
Certified Public Accountant
231.798.6508
scotth@hscompanies.com

Home Office Deduction Criteria

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hscompanies-home-office-deduction

Do you use your home for business?

Do you use your home for business? If so, you may be able to deduct expenses for the business use of your home, such as: mortgage interest, insurance, utilities, repairs, and depreciation.

You must meet two requirements in order for your home to qualify as a deduction.

  • You must use your home office space regularly and exclusively for business.
  • You must run your business primarily out of your home office.

 
Keep in mind that typically home office deductions are based on the percentage of your home that is devoted to the business. If you use a spare room as your office, you’ll need to calculate the percentage of your home you have devoted to business activities.

If you telecommute and want to deduct your home office workspace, you must meet the follow criteria:

  • The use of your home workspace must be for the convenience of your employer.
  • You can’t rent any part of your home to your employer and use the rented portion to perform services for that employer as their employee.

 
Daycare providers have special qualifications for deducting their workspace. You may be allowed to deduct business expenses for parts of your home, even if you use them for non-business purposes.

  • You must be providing daycare for children, people age 65 or older, or for people who are physically or mentally unable to care for themselves.
  • You must have applied for, been granted, or be exempt from having one of the following: a license, certification, registration, or approval as a daycare center, family daycare home, or group daycare home.

 

To learn more about deducting your home business workspace, contact H&S Companies.

Sources:
Home Office Deduction
Publication 587, Business Use of Your Home  

Economic Forecast – Last Half of 2013 Looking Bullish

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hscompanies-bull-market

Economists, surveyed by USA Today, expect growth for the last nine months of the year.

According to an article on USA Today, during the first half of 2013, the economy will be sluggish, but the bull will come out to play as we head into summer. Economists, surveyed by USA Today, expect growth for the last nine months of the year (at the fastest pace in the last three years)! Average monthly jobs gains are expected to be 171,000, while unemployment is expected to fall from 7.9% to 7.5%.

 To learn more, read: Economic forecast: More jobs, faster growth

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