Sunday, January 28, 2007

Throwing S.A.L.T. in Your Game

There is an article in the January 2007 issue of CFO magazine that caught my attention this week. It deals with State And Local Taxation (S.A.L.T.) departments making an attempt to get money back from businesses that are drawn to their state by generous tax breaks offered by another governmental department, economic development. In most cases, when and individual begins research on starting a new business, they look for a state that offers tax breaks, economic development funds to start the business in underdeveloped areas, or both. What seems to be happening these days is the state revenue departments are finding other ways to take back the incentives given by the economic development departments.

Many of the states strategies include, beefing up their audits of businesses, passing new “creative” tax laws, and stricter enforcement of the laws surrounding the economic incentives. These actions however contradict the efforts of the economic development departments of the states so there is a conflict within the state. The goal seems to be that states want businesses to open up shop in their state but at the same time they want the tax revenue they will bring. Once the revenue department and the economic development department reach a compromise, the gap between the two can be shorten. By proactively working together on economic development projects, each side can benefit. This way less SALT will be thrown into the strategy of the business looking to move into a state.

For more information regarding the best states to open a business in be sure to check out the following website:

www.cfo.com/statetax


Keeping your Business N Synergy (will less salt)

Brian N. Stovall
http://www.thebricogroup.com/

Sunday, January 21, 2007

Tax and Legislative Updates

The IRS is raising the standard mileage rates for the year 2007 for automobile usage. The new rates are used to calculate the deductible costs of operating an auto for business use, charitable use and/or medical or moving purposes. Beginning with the start of this year, the mileage rates will be as follows:

48.5 cents per mile for business miles driven

20 cents per mile for medical or moving purposes

14 cents per mile for service to a charity

See IR-2006-168 and Rev. Proc. 2006-49 for more information

From the legislative forefront, the Senate is backing legislation that would provide around 8.3 billion in tax cuts for small businesses over the next 10 years. The details of the bill include increasing the minimum wage, and extend the Work Opportunity Tax Credit for five years. The bill would also provide favorable expensing provisions for small businesses allowing them to more quickly deduct costs associated with growing their business.

These are some of the many issues that will affect your small business in the year 2007 and beyond.

Keeping your Business N Synergy

Brian N. Stovall
http://www.thebricogroup.com/

Sunday, January 14, 2007

What The RAL is Going On?!?!?

Greetings everyone out there in cyber land. I am writing (and posting) this week’s blog on the road from Maryland as I am out of the office working with clients. On the flight up from Atlanta, I was able to get in some reading and found an interesting article in the January 2007 issue of Practical Accountant (a Source Media Publication). It deals with our good friends at H&R Block and their better disclosure to their clients of all the fees associated with Refund Anticipation Loans (RAL’s). What caught my attention is that they are reducing the costs associated with these loans.

For those who do not know how RAL’s work, let me walk you thru them. The loan is based on your anticipated refund amount and the time frame to receive your money can be a fast as a day to 11 days. The catch with these loans is that the interest rates can be as much 35 to 40 percent, not including the additional costs for forms and processing. This is a great way for tax prep firms as well as banks to make an additional bounty of money.

Smarter ways of filing your taxes and keeping more of your hard earned money is to simply E-file your return, and have the refund direct deposited into your account. This process typically takes about the same amount of time as a RAL and you save your money.

This is just a thought. Feel free to respond to this post and let me know your thoughts.

As always keeping your Business N Synergy (even on the road) :-0

Brian N. Stovall
www.thebricogroup.com

Sunday, January 07, 2007

Hey IRS, What’s New?

So the tax season has started and it may appear that the IRS was caught a bit off guard this year. With all the recent tax law enactments that were passed, the IRS has not had time to update the form 1040 and additional schedules. Individuals claiming deductions on Schedule A will need to lookout for a special mailing of Publication 600 outlining how to claim the sales tax deduction.

For more information visit this IRS link

New Form 1040EZ-T

For those who don’t need to file a regular tax return, the IRS has developed this short form so that taxpayers can request a telephone refund. Taxpayers can use the standard amount on the form or attach Form 8913 for actual expenses.

And now the bad news….

Because of all the “changes” this year, the IRS expects return processing to be slower than usual, thus delaying your precious tax refund. The IRS recommends that you E-file your tax return for faster processing. For the best estimate of when you will receive your refund, the IRS has provided Publication 2043.

Happy Tax Season to ALL!!!

Brian N. Stovall
www.thebricogroup.com