Thursday, October 30, 2008

New Updates from Microsoft

Our friends over at Microsoft have a couple of new updates that may be of interest to many individuals and small business owners. The firs is a security update MS08-067 which affects many versions of the Windows operating system and server operating systems so be sure to download this update as soon as possible. Many individuals turn off their automatic updates and if that is the case you will have to go directly to the Microsoft website to download the update.

The other update is the unofficial death of the Windows Vista operating system. I came across an article that Microsoft recently revealed the next version of their operating system which will be called Windows 7. Be sure to check out the slideshow that provides screen shots of the new look and feel of Windows 7. Although similar to Vista, Windows 7 has made a great deal of changes that are sure to please new computer buyers when released sometime next year. If you are in the market for a computer and can hold off, waiting until this operating system is released may be a good thing.

Keeping Your Business N Synergy

Tuesday, October 28, 2008

Tax Provisions "Bail" You Out

This past week I had the pleasure to sit on a panel with other local accountants that spoke to the needs of small business owners and one of the main questions that attendees wanted answers was regarding how the small business would stay afloat after the passage of the bailout bill. The bailout bill had a great deal of tax provisions that were included (and I finally had a chance to take a closer look at) here are a few that will hopefully help bail out small businesses and individuals in this slow economy:

Individual Provisions

• Itemized and “above the line” deductions – state and local sales tax deductions, higher education tuition deduction, additional standard deduction for real property taxes extended through 2009
• Tax free distributions from IRA’s for charity has been extended through 2009
• Child tax credit floor falls allowing more taxpayers to tax the credit

Small Business Provisions

• Leasehold and restaurant improvements now eligible for a shorter depreciation cost recovery through 2009
• Charitable Contributions of food, books and computers extended through 2009
• New markets tax credit extended through 2009, encouraging more small business investment

Be sure to speak with your accountant regarding these new tax provisions and how they may affect your tax planning for 2008 and 2009 tax filing season. As always tax planning should be proactive and not reactive to the economic environment around you.

Keeping Your Business N Synergy

Sunday, October 19, 2008

Let’s Be Reasonable

Recently a potential client posed a question to our firm regarding what kind of salary he should take for his new business. Although this may sound like a simple question, there are many factors that must be taken into account before constructing a compensation plan for a small business and their owners. The main factor that must be addressed is what type of business entity the business owner has chosen (sole proprietor, partnership, C or S-Corp) and this should be addressed in the planning stages with input from an attorney and accountant.

If the business is organized as a corporation, additional legwork must be done to ensure that the compensation taken by the officers/employees is reasonable. The IRS has recently stepped up their enforcement on corporations that do not provide their officers/employees with a reasonable compensation and it is important for a small business owner to address the following factors when developing a compensation plan:

• The financial condition of the company
• The roles and responsibilities of the company
• The salaries paid to other individuals in similar situations in the market

These are just a few of the factors a small business owner must address when structuring a compensation plan to maintain compliance with the IRS guidelines. Be sure that your compensation plan is outlined and detailed within your corporate information and there will be minimal chance that the IRS adjusts your compensation to what they feel is reasonable.
Keeping Your Business N Synergy

Friday, October 17, 2008

Tax Extenders Catch a Ride on Bailout Bill

Now that the tax filing extension is behind many taxpayers, it is now time to focus on next year’s tax season. I know that many are dreading the process that will start all over again very soon, but there have many quite a few tax law changes that many affect your business and individual tax returns. The passage of the recent “bailout” package contained a great deal of changes for the coming tax season. The major changes include making the penalty provisions the same for taxpayers and tax preparers and the major change of extending the AMT patch. Luckily the AMT patch extender was passed in time enough for the IRS to make the necessary changes to the tax forms for the upcoming filing season.

The majority of the changes in tax code will more than likely happen after the election and going into the 2010 tax year. Be sure to stay tuned in to properly plan for your tax future. As always remember that tax planning should be a year round process.

Keeping Your Business N Synergy