AMT Aftermath

The IRS has made great progress in implementing the changes to forms due to the AMT patch. According to recent news, the filing season should start on time for many taxpayers. The others…well due to the AMT, if you are a taxpayer filing the following five forms, processing of your return will not begin until February 14, 2008:

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• Form 8863, Education Credits.
• Form 5695, Residential Energy Credits.
• Form 1040A’s Schedule 2, Child and Dependent Care Expenses for Form 1040A Filers.
• Form 8396, Mortgage Interest Credit.
• Form 8859, District of Columbia First-Time Homebuyer Credit.

Be sure to speak with your tax advisor if you have to file these forms for you 2007 returns.

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I.R.S. says I’m Really Slow

Now that the AMT patch is behind us, many wonder how long it will take to process a return (and get your refund) for the coming season. According to the IRS it needs up to 10 weeks to reprogram systems for the AMT patch. A further detail of the possible delays from the IRS Oversight Board:

AMT Delays





So as it sits right now, the IRS processing of returns will be really slow for 2008. The patch was only extended for one year that makes many wonder how this will affect tax planning for the future. I am sure that we have not seen the last of the AMT issue.

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A Holiday Gift from the Government….AMT Patch Passed

Hopefully the AMT saga has ended….for the time being at least. Wednesday, the House passed a one-year "patch" for the alternative minimum tax on Wednesday, joining the Senate in acting to shield taxpayers from an average hike of about $2,000. Now is goes to the president to be signed into law. Once signed by the president, the IRS will have to make a rush effort to change their procedures and tax forms possibly delaying tax returns (and refunds) for the upcoming tax season.

So there is still a little time to meet with your tax advisor and devise a strategy regarding the AMT and your situation. For many American’s (about 20 million) the AMT patch may be an early holiday gift for the AMT will affect taxpayers with incomes less than $100,000.

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AMT Update – Expect Delays

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The House was able to pass an alternative minimum tax (AMT) relief bill on December 12, but the new measure contains more than $50 billion in revenue increases that critics believe are unlikely to win support in the Senate. Some of the highlights include:

AMT relief for nonrefundable personal credits and increases the AMT exemption amount to $66,250 for joint filers and $44,350 for individuals. The bill would also provide relief for AMT taxpayers who have exercised incentive stock options and would make changes to the refundable AMT credit. The measure also includes a provision to increase the eligibility of the refundable child tax credit.

No it is back to the Senate, at the rate things are going the IRS estimates that e-filed returns will not be able to be processed until mid-February.
We will keep a close eye on the developments regarding the AMT and YOU.

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AMT Fixed?!?

Many taxpayers are concerned about the AMT (Alternative Minimum Tax) issue as questions regarding it have been coming into our office a great deal lately. In actuality the AMT, will affect about 23 million taxpayers, so here is the latest news…
A one-year patch of the AMT provisions was approved by the Senate on Thursday, December 6 but without including any of the offsetting revenue-generating provisions included in a version of the bill passed last month by the House. So now it’s back to the House. The Internal Revenue Service has already warned that the delays in patching the AMT already threaten to hold up tax refunds for millions of taxpayers. Twelve different forms need to be revised to reflect the changes.
Be sure to speak with your tax advisor and start planning for the AMT changes now

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10 Small business start-up sins

With the New Year ahead, many wanna-be entrepreneurs are considering starting their own businesses. Here is a must read for anyone who is considering the leap to the world of independence. One way to ensure that you do not fall into these ten traps is to have a great team of advisors who can guide you through the process of starting your own business. The major sins include:

1. Not learning from one’s mistakes
2. Forgetting one’s personal life
3. Expecting customers to come to you
4. Losing one’s soul
5. Maxing out credit cards
6. Keeping ideas to oneself
7. Not using written contracts
8. Starting a business without passion
9. Selecting a bad location
10. Trying to go at it alone

Read the rest of the article

Good information for those starting a business or even operating an existing on. Use this information to keep your Business N Synergy

SSA/IRS adds to their Technology for SMB’s

Recently the IRS added links for small to mid-sized businesses (SMB’s) on the SSA/IRS website. The links provide SMB’s with resources regarding Employment Tax & Worker Classification, forms, publications, and other small business resources to get SMB’s ready for the upcoming filing season. With the year coming to an end, now is a good time to make sure you are ready to provide your employees with their tax information. W-2’s should be sent to employees by the end of January 2008.

SMB’s can also subscribe to the “e-News for Small Business” that provides timely useful tax information right to your computer. The news is sent to your inbox every Wednesday, and it is FREE.




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Inflated Tax Penalties

So we all know that every year one thing is always set to increase…inflation. The IRS is now taking a look at their tax penalties to ensure that they maintain their bite during these inflationary times. A recent report by the GAO (Government Accountability Office) reveals that inflation has significantly decreased the real value of some civil tax penalties with fixed dollar amounts. The report goes on to say that the decline in value could weaken the deterrent effect of penalties and the treatment of taxpayers over time.

Maybe coming soon to a mailbox near you will be an increase in your tax penalties, but of course the easiest way to alleviate this situation is seek out a tax advisor that can keep you ahead of the ball year round. Don’t let inflation bite you in the tax pocket too.

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Microsoft Office Accounting 2008 Coming Soon

Microsoft is updating their small business accounting software package for 2008. Get ready for the new Office Accounting Express and Professional 2008. Each software title has enhanced features in addition to the seamless integration with existing Microsoft software titles. The major improvements are:

1. New Bilingual versions
2. New Resource Center
3. Budgeting Functions
4. Universal transaction import
5. Easier Invoicing
6. Enhanced Purchase and Sales Order tools
7. Streamlined Online Banking

Of course Office Accounting has all the features that made over 2million people download the FREE version in 2007. These features include payroll integration, EBay business integration, and the ability to send your books to your accountant remotely. For more information on how Microsoft Office Accounting can make your business run smoothly be sure to visit their website or speak to a Microsoft Office Accounting Certified Consultant.

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Tax Planning Switch for 2008

The final months of the year are the time that many taxpayers are meeting with their accountants to get a good hold on their taxes for this year. Typically as a small business taxpayer, the strategy for tax planning is to defer income to the next year and accelerate deductions in the current year. This strategy may need to be changed if 2007 was a bad year economically (see previous posts regarding small business sentiments). If there was not very much revenue for 2007, one may ask what the use in accelerating deductions is.




One thing is do is maybe switch your plan and defer deductions until next year. As with any tax strategy what actions your small business takes in the old year need to be examined in regards to the projections for 2008. Be sure to speak with your accountant before taking any actions for the actions you take should not only be to lower your tax bill ,but to keep your business running smoothly for years to come.

Keeping your Business N Synergy

Crunching Back the Cash Flow Crunch

Two interesting articles crossed the e-mail today. One article is announcing a new ad campaign that encourages more people to start their own businesses. The launch of Intuit’s “Just Start” will launch in New York’s Grand Central today and tomorrow. Another article probably echoes the sentiments of many existing small business owners that operating a business and managing cash flow are the most important issues to success.

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The numbers in these articles is what really caught my eye. Intuit conducted a survey with accountants and their results found that the majority of accountants tell individuals interesting in starting their own business to create a business plan. Almost all of the accountants surveyed also stated that up to one quarter of their clients did not use accounting software.

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Another survey conducted by CPA2Biz found that over half of small business owners do not use budgets or forecasts to effectively manage their cash flow. These surveys bring up major issues that small business owners must address to keep their business running smoothly. Attending one of our FREE seminars is a good way to get the tools to keep your cash flow smooth.

Our next seminar is this Saturday so be sure to check our website for more information.

Keeping Your Business N Synergy

Cleaning Out Your Tax Fridge

With tax season just around the corner, and tax laws changing all the time, many individuals and small businesses will be looking for the right ingredients to prepare their new tax return entrees for 2008. As with any great entrée one prepares, it all starts with your ingredients. To ensure that your taxes are prepared with the freshest and latest tax changes, here are some tax provisions that will be expiring by the end of the year (2007) that you will need to clean out of your tax fridge:

1. AMT exemption amount
2. State and local sales tax deduction
3. Qualified tuition deduction
4. Residential energy credit
5. Conservation contribution
6. IRA distribution to charities
7. Educator deduction
8. Mortgage insurance premiums
9. S corporation contributions
10. Research credit
11. Contributions of food, books, or computer technology

12.Leasehold and restaurant improvements

Be sure to check with your tax advisor for the expiration date of these provisions and details on how to use them for your tax entrée this year.

Keeping your Business N Synergy

Organize Your Medical Expenses

New Rule Will Haunt Poker Players

Happy Halloween to everyone out there in blogger land. Here is a new law that is sure to haunt poker players at tax time. Starting next year, casinos and other sponsors of poker tournaments will be required to report most winnings to winners and the IRS.

The new requirement, which goes into effect on March 4, 2008, was contained in guidance released Sept. 4 by the IRS. The guidance is designed to clear up confusion about the tax reporting rules that apply to poker tournaments. In recent years, some casinos and players have been confused over whether poker tournament sponsors who hold the money for participants in a poker tournament are required to report the winnings to the IRS and withhold tax on the winnings.
For more information on this change be sure to visit this IRS web link.

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Small Business Networks a Growing

It seems like every day there is a new smal business network introduced by a large compnay these days. Well today, I found out of another one that is being introduced by AT&T. “The Watercooler” is the newest entrant into the resource portals for SMB’s and it appears on the surface to offer similar resources as the others. SMB resource portals allow small business owners immediate access to information they need to effectively run their businesses. They are also good ways to network with other small business owners online. Below are just a few online resources that are great ways to increase your reach:

ATT OnwardSmallBiz
Intuit's Jumpup
Microsoft Startup Center
Microsoft Small Business Center

Many of these resources also offer FREE products and various other resources that your SMB will benefit from. Be sure to join these networks and get your Business N Synergy.

Missed Your S-Corp Election

Let me start off by thanking the many attendees for our fall seminar series yesterday. We hope that the “Getting Sharp as a Tack on Taxes” seminar provided everyone with timely information that will help you save money on your taxes this coming season. A particulr question came up regarding S-Corps and here is a little information regarding Filing a S-Corp election:

Revenue Procedure 2007-62 allows small businesses that missed filing Form 2553, Election by a Small Business Corporation, before filing their first Form 1120S, U.S. Income Tax Return for an S Corporation, to file both forms simultaneously. The change is effective for taxable years that end on or after Dec. 31, 2007.

Be sure to speak to your tax advisor regarding additional steps to ensure that your S-Corp election is prepared correctly.

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No Bad Checks to the IRS

The rules are changing for taxpayers who might consider writing a bad check to the IRS. The former rule was a 2 percent penalty of the amount of the check that was payable to the government. The new rule is a flat rate penalty for checks received after May 25th 2007. The new rate is $25 for amounts less than $1250.

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Small Business Confidence Drops in 3Q

Bad new from the small business home front. According to the briefing from SMB Finance magazine (Co sponsored by the International Profit Associates), the Small Business Confidence Index slipped three points during the third quarter of this year. The major areas of the country that saw the largest declines were the Midwest, Northeast, and South regions. Details regarding the regions are:

The greatest loss of confidence was among businesses in the southern states where the confidence index dropped to 44 from the 50 recorded during the second quarter.

Small businesses in the western states, where the SBCI reached 47.66, were the only ones who reported improved business prospects from the previous quarter.

Businesses in the Northeast with an SBCI of 42.33 and the Midwest with an SBCI of 39.66 both were both below the national average of 43.


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Deadlines, Deadlines, Deadlines

The fall season is a busy time: making quarterly filings and payments; verifying employee, wage, and benefit information; processing tax returns. These are just some of the many deadlines coming for a small business owner. Be sure that you have everything you need to get all of your payroll information filed correctly and on time. Here are the upcoming deadlines for payroll tax filings:

Social Security, Medicare, and withheld income tax. File form 941 for the third quarter of 2007. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until November 12 to file the return.

Federal Unemployment Tax. Deposit the tax owed through September if more than $500.

There also may be state payroll taxes due for the quarter. Be sure to check with your state.

If this seems like a lot to do, there are ways to make filing easier. By using technology and e-filing most of these tasks can be track and completed with little hassle. Check with your tax advisor for more information on how you can make payroll filings easier.

Keeping Your Business N Synergy

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Tuition is the Perfect Medicine

Today’s tax saving topic deals with personal tax deductions for taxpayers with children in college or prep school who pay tuition. For taxpayers with children in college or prep schools tuition can be a large family expense. Now there is a write-off available for a portion of the tuition that is attributable to health care as a medical expense. You must have a breakdown of the tuition costs that’s attributable to health care to take this deduction. For more information see IRS Revenue Ruling 54-457.

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Tax Provisions….Get your 4th Quarter N Order

The last quarter is upon us!! It is now time for the last push for the year 2007. This is also a great time to take a look at your tax situation so that you will be ready for tax season next year. Now is the time to get a strategy together for tax time, not the yearend. There are a few new tax provisions for 2007, and one many small business owners may want to look at is the Domestic Production Activities Deduction (Code Sec. 199).

This deduction many small businesses qualify for and it allows a deduction from taxable income an amount that is equal to a portion of the small businesses’ gross receipts. The deduction has now been raised to 6 percent (%) up from 3 percent (%) in 2006.

Be sure to speak with your tax advisor for additional rules and qualifications for the deduction. Get your last quarter N order.

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www.thebricogroup.com