Thomas and Thomas CPAs - Richmond VA

Corporate Deadline Approaching

2012-03-06T16:51:00.003-05:00

Corporate Deadline Approaching

It is very easy to remember April 15^th as the deadline for tax return filing, but there is another deadline that a lot of folks forget about.

If you have a corporation that uses a calendar year, then the deadline for that corporation’s tax return is rapidly approaching at March 15^th.

Make sure to file a timely extension with the IRS and state if you cannot assemble your information in time to file the return. Keep in mind that the extension is only an extension of time to file, not an extension of time to pay. The IRS will be expecting the payment of any taxes owed along with that extension.

Call our office at 804-798-9408 or email us for further info.

BEWARE Self Employed Filers!

2012-03-05T16:51:00.000-05:00

BEWARE Self Employed Filers!

If you had a current year Schedule C loss you may be selected for audit. General Accounting Office statistics indicate that if you file a Schedule C you are ten times more likely to be audited (even with a profit). A loss increases the possibility of audit.

If filing on Schedule C, we are suggesting to our clients that you consider becoming an LLC and then electing to become a Corporation. Current discussions in Congress contemplate the lowering of “C” corporation tax rates below current individual rates. Existing tax laws effective after 2012 result in even higher individual rates and loss of exemptions and deductions that may make “C” corporation status desirable. Also by electing “C” status you can select a different year end and relieve the pressure of getting info together during the busy tax filing season. A year end other than December tends to negate the Form 1099 matching process resulting in less inquiries by IRS.

Call our office at 804-798-9408 or email us for further info.

IRS is Cracking Down on Subcontractor Payments!

2012-02-07T16:28:00.003-05:00

IRS is Cracking Down on Subcontractor Payments!

When a subcontractor is hired to perform services for a business, the hiring business is to send a Form 1099-Misc to the subcontractor (and to the IRS) if the payments for the year total $600 or more. This would include payments to landlords for rent and also attorneys for services rendered. Payments to corporations, except for the attorneys, are exempt from the filing requirement. Payments to LLCs are not listed under the exempt payees.

The IRS will use this information to make sure that the payee lists these payments as income on their tax returns.

Many times a payer will neglect this filing requirement.

In their efforts to collect as much underreported income taxes as possible, the IRS has added two new questions on each business return and schedule for the 2011 tax returns:

1- Did you make any payments requiring the filing of Forms 1099?

2- Did you file all required 1099s?

Call our office at 804-798-9408 or email us for further info.

Be Prepared to Pay More After 2012

2012-02-02T16:27:00.000-05:00

Be Prepared to Pay More After 2012

There are several new tax laws going into effect in 2013 that call for an increase of 3.8% tax on unearned income such as interest, dividends, annuities, royalties, rents and capital gains, as well as an additional 0.9% tax on earned income for married joint filers with adjusted gross income over $250,000 ($200,000 for all others).

Additionally, the Bush tax cuts are set to expire at the end of 2012 with an increase in the rates across the board up to a high of 39.6% as during the Clinton years. Dividends will no longer be taxed at capital gain rates (which incidentally will increase from 10% to 15%) and will be taxed at ordinary income rates.

Personal exemption and itemized deductions will be phased out for individuals with high adjusted gross incomes. As a result many economists are projecting increases ranging from 27 to 30% on certain taxpayers in 2013 and beyond.

Call our office at 804-798-9408 or email us for further info.

IRS Wants Congress to Give Them More Authority Regarding Levies

2012-01-18T13:49:00.000-05:00

IRS Wants Congress to Give Them More Authority Regarding Levies

With regard to levies, in the past, the only income that the IRS could continuously levy included wages, salaries, and other federal payments (ie Social Security payments).

Apparently, the IRS is now seeking the authority from Congress to also continuously levy royalties, rents, fishing boat proceeds, and other nonemployee compensation (ie Self Employed 1099 Contractor payments).

There is no reason to believe that the Congress will not grant them this capability.

Call our office at 804-798-9408 or email us for further info.

Your Private Mortgage Insurance (PMI) may be Deductible

2012-01-15T13:49:00.000-05:00

Your Private Mortgage Insurance (PMI) may be Deductible

A lot of folks pay private mortgage insurance (PMI) on their mortgage loans. This insurance protects the lender in case the borrower defaults on their mortgage loan, and most lenders will require that borrowers have such insurance until their loan becomes less than 80% of the value of the home.

As we enter the new tax filing season, keep in mind that this insurance may be deductible for you on your 2011 tax return. If your adjusted gross income (AGI) is less than $110,000 ($55,000 for married filing separate taxpayers), then you may be able to deduct a portion, if not all, of this insurance that you paid for 2011.

Also --- FYI ---- This deduction is scheduled to disappear after the 2011 filing year, unless Congress acts to extend it into 2012.

Call our office at 804-798-9408 or email us for further info.

Federal Unemployment Taxes Higher for Companies in 20 States

2011-12-20T16:29:00.003-05:00

Federal Unemployment Taxes Higher for Companies in 20 States

When state unemployment funds run low on monies, they can borrow from the federal unemployment fund to make their payouts to the unemployed. If the state unemployment funds do not pay it back to the federal fund within two years, then the credit given to the employers in that state will be reduced, thus making the employers federal unemployment taxes higher. This mechanism was put in place as a way to ensure that the federal unemployment fund was replenished for these unpaid loans.

For 2011, employers in the following states will be subjected to this higher federal unemployment rate: Arkansas, California, Connecticut, Florida, Georgia, Indiana, Illinois, Kentucky, Michigan, Minnesota, Montana, North Carolina, Nevada, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Virginia, and Wisconsin, as well as the Virgin Islands.

Call our office at 804-798-9408 or email us for further info.

Should You Take Capital Gains This Year?

2011-12-15T16:28:00.000-05:00

Should You Take Capital Gains This Year?

When tax planning, capital gains should always be considered. If you have capital loss carryforwards from prior years, you may want to consider selling some securities that have a gain position on them, as that capital loss carryforward can be used to offset those capital gains.

Any amount in excess of the loss carryforward will be taxed at a maximum of 15% if you held the security for over one year. If held for under a year, the tax rate will be your ordinary tax rate.

Call our office at 804-798-9408 or email us for further info.

Year End Tax Planning

2011-12-01T16:37:00.000-05:00

Year End Tax Planning

With the year-end fast approaching and tax planning on the mind, now is a great time for most taxpayers to benefit by paying some bills early.

Remember that most deductions are deductible in the year they are paid, so keep in mind:

to pay that 4^th quarter payment for estimated state income taxes in December,

to consider paying property taxes and/or January’s mortgage payment in December if they are due in 2012,

consider paying medical bills in December, or think about having any elective procedures before year end and paying for those as well, and

charitable donations can be made until Dec 31 and still be deductible for 2011 as well.

Call our office at 804-798-9408 or email us for further info.

Child Tax Credit Available to Those Illegally Working in US

2011-11-23T16:29:00.001-05:00

Child Tax Credit Available to Those Illegally Working in US
For those workers living and working illegally in the US that are Mexican or Canadian citizens, tax return filing still must be done. The IRS allows the taxpayer to apply for an Individual Taxpayer Identification Number (ITIN) to be used to file their returns, in place of a Social Security Number.

As an added bonus for these illegal workers, the tax code allows them to obtain the Child Tax Credit as well. But, they are not eligible for the Earned Income Credit.

Over $4 Billion was refunded last year to people who were not authorized to work in this country.

Call our office at 804-798-9408 or email us for further info.

Breaks for Veterans

2011-11-11T13:43:00.002-05:00

Breaks for Veterans

There is a new bill currently before Congress that would give a break to businesses that would hire veterans. This bill, if passed, would give employers a credit of up to $2400 if they were to hire a veteran that was unemployed for four weeks or more.

Big bonus….if the veteran was unemployed for six months, the credit would jump to $5600, and the credit would be even more if the veteran is disabled.

Call our office at 804-798-9408 or email us for further info.

Capital Gains to be More Complicated This Tax Season

2011-11-04T15:27:00.001-04:00

Capital Gains to be More Complicated This Tax Season

There will be a new form to be added to the return this upcoming tax season. Form 8949 must be added to the return to list the details of all capital gains.

What is happening to the traditional Schedule D? Is the IRS eliminating it? Not a chance.

The totals of capital gains from the Form(s) 8949 will be transferred to Schedule D, so we will basically need to prepare two forms to report the capital gains now.

Call our office at 804-798-9408 or email us for further info.

Social Security Increasing for 2012

2011-11-02T15:25:00.000-04:00

Social Security Increasing for 2012

The wage base for is increasing for 2012 to $110,100, up from $106,800 in 2011. This is the first increase in two years.

Not coincidentally, the benefits paid out are going to increase by 3.6% as well.

The wage base cannot be increased in any year without increasing the benefit payout as well.

Call our office at 804-798-9408 or email us for further info.

Cell Phones to Employees Can Be a Tax Free Benefit

2011-10-28T15:24:00.000-04:00

Cell Phones to Employees Can Be a Tax Free Benefit

Cellular phones provided to employees can be a tax-free benefit to the employee. According to the IRS, if a company gives its employee a cell phone primarily for business purposes, there will be no tax on the employee for the personal use of the phone and no log of personal and business calls will be necessary.

Call our office at 804-798-9408 or email us for further info.

Do the Top Earners Pay Most of the Income Taxes?

2011-10-21T14:00:00.000-04:00

Do the Top Earners Pay Most of the Income Taxes?

According to an IRS analysis of the tax year 2009, they do.

The top 1% of earners in 2009 made $343,927 or more and paid 36.7% of all income taxes.
The top 5% of earners in 2009 made $154,643 or more and paid 58.7% of all income taxes.
The top 10% of earners in 2009 made $112,124 or more and paid 70.5% of all income taxes.

The bottom 50% of earners in 2009 paid 2.25% of all income taxes.

Call our office at 804-798-9408 or email us for further info.

Home Mortgage Interest on Construction Loans

2011-10-17T14:03:00.000-04:00

Home Mortgage Interest on Construction Loans

When a taxpayer obtains a loan to build their primary residence, the interest on that loan is deductible on Schedule A of the tax return after construction begins. There is a 24 month window of time to take this deduction while the home is being built. After 24 months, if the home is not completed, then the interest is no longer deductible.

With factors as the current state of the economy or unforeseen circumstances, this can readily happen.

Call our office at 804-798-9408 or email us for further info.

Supreme Court will soon rule on the Health Reform Law

2011-10-03T16:04:00.000-04:00

Supreme Court will soon rule on the Health Reform Law

Obama has petitioned the Supreme Court to review a portion of the Health Care Reform Law.

Sometime prior to the 2012 elections, the Supreme Court will rule on whether the part of the Health Reform Law requiring people to obtain health insurance.

Call our office at 804-798-9408 or email us for further info.

New 1099 Requirement to Catch Underreporting of Income

2011-09-23T10:31:00.005-04:00

New 1099 Requirement to Catch Underreporting of Income

In an effort to curb underreporting, there is a new reporting requirement beginning for 2011. Paypal and similar third party companies will be issuing a new 1099 form (called a Form 1099-K) to all payees with over 200 sales transactions and over $20,000 in annual sales volume.

To help the IRS match the 1099’s with the payee’s tax return, there will be a separate line on the tax return to show that portion of income.

Call our office at 804-798-9408 or email us for further info.

Interest Rates on Overdue Taxes Decreasing

2011-09-21T14:23:00.002-04:00

IRS Interest Rates on Overdue Taxes Decreasing

Starting September 30, 2011, the IRS will charge 3% interest to individuals on overdue taxes, down from 4%. The interest rate for corporate tax bills over $100,000 will be 5%.

The IRS will pay 3% interest to individuals getting refunds and 2% to the corporations. If the corporate refund is over $10,000, then the interest rate paid on the excess amount over $10,000 will be 0.5%.

Call our office at 804-798-9408 or email us for further info.

Letters are coming from the IRS

2011-09-01T11:32:00.001-04:00

Letters are coming from the IRS

No reason to worry if you get one though.

Very soon, approximately 20,000 individual and 24,000 business taxpayers will be getting letters from the IRS.

The IRS is attempting to update their data on the time and costs of recordkeeping and completing the tax returns, so they are sending out surveys to selected taxpayers, in order to gather information.

Call our office at 804-798-9408 or email us for further info.

IRS’ Own Employees Delinquent on Their Taxes

2011-08-26T12:46:00.000-04:00

IRS’ Own Employees Delinquent on Their Taxes

Treasury inspectors reported that there are more than 100 IRS employees that have not filed or paid their taxes.

The IRS has long had a system that they use to determine if their own employees do not file or pay their taxes in a timely fashion, but apparently it is not flawless.

Call our office at 804-798-9408 or email us for further info.

New Federal Unemployment Rate!

2011-08-25T12:44:00.001-04:00

New Federal Unemployment Rate!

Effective July 1, 2011, the federal unemployment rate was reduced from 6.2% to 6.0% of the first $7,000 of wages for the calendar year. There is a credit of 5.4% given if the employer pays their state unemployment taxes timely, therefore making the effective rate change from 0.8% to 0.6% of the first $7,000.

This change reflects the elimination of a 0.2% surcharge that was added into the unemployment rate in the 1970’s.

The IRS is currently revising the Form 940 to reflect the two different rates for 2011.

Call our office at 804-798-9408 or email us for further info.

The IRS Wants to Help!

2011-08-12T14:17:00.000-04:00

The IRS Wants to Help!

One of the little known facts in the tax world is that the IRS really does want to help you keep your records straight and be an educated taxpayer.

In that effort, the IRS has established a website at www.IRSVideos.gov geared toward educating the taxpayers and tax professionals. There are loads of videos on the site that can be viewed, including Small Biz Workshop and Starting a Business videos for Small Businesses. Videos for individuals include IRS Audits, Recordkeeping, and Scams & Fraud.

Call our office at 804-798-9408 or email us for further info.

Over The Counter Drugs Returning to HSAs?

2011-08-09T15:59:00.002-04:00

Over the Counter Drugs Returning to HSAs?

One of the changes in the new health reform law started in January 2011, when over the counter drugs were no longer able to be purchased with HSA funds.

The new rule stated that the only drugs allowed to be purchased with HSA funds would be those prescribed by a doctor.

Now, there is word that this part of the new law may be repealed, returning OTC drugs to the list of HSA qualifying expenses.

Apparently, lots of folks were getting their doctors to write prescriptions for the OTC medications to circumvent the new rules.

Call our office at 804-798-9408 or email us for further info.

IRS Will Never Contact You Via Email

2011-08-01T13:01:00.002-04:00

IRS Will Never Contact You Via Email

Just a quick reminder to be cautious of any emails from the "IRS". There have been many scam artists who originate these emails claiming that you are due a refund or under investigation, only to obtain personal information or direct you to a fake IRS website that will ask for personal information.

Call our office at 804-798-9408 or email us for further info.

IRS Revokes Tax Exempt Status

2011-07-25T12:26:00.003-04:00

IRS Revokes Tax Exempt Status

Last month, over 275,000 organizations had their tax-exempt status revoked by the IRS. These organizations had not filed the required annual reports for three consecutive years. At this point, many are believed to be defunct.

The Pension Protection Act of 2006 created the annual filing requirement and gave the IRS the authority to revoke the tax-exempt status after three years of non-filing the reports.

All is not lost, however, as the tax-exempt status can be reinstated. Give us a call if your organization needs reinstatement.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

IRS Launches New Smartphone Application

2011-07-22T12:25:00.000-04:00

IRS Launches New Smartphone Application

Earlier this year, the IRS launched a smartphone application for taxpayers’ cell phones. This free application, called IRS2Go, can also be used to check tax refund status and receiving daily IRS tax tips.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

Your Time is Worthless, but...

2011-07-08T14:34:00.001-04:00

Your Time is Worthless, but...

The value of your time spent for charitable organizations cannot be deducted on your tax return. I have always told clients that the IRS considers their time to be worthless when it comes to charitable purposes.

Although, for those that spend a lot of time working for their charities, there are certain out of pocket expenses that may be deducted when spent for a charitable organization.

These would include:

A portion of meals or entertainment expenses,
Additional telephone expenses you incur,
Cost of uniforms used for the charity,
Mileage at $0.14 per mile, and
Hotel costs to attend charity functions out of town.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

Tax Return Statistics

2011-07-01T15:39:00.000-04:00

Tax Return Statistics

The IRS has released some statistical data from their year ended September 30, 2010.

During that year, there were over 230 million returns processed, and over 119 million of those returns were efiled.

Collected revenues were $2.3 trillion, while refunds issued were $358 billion.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

Fraudulent Energy Credits

2011-06-30T14:16:00.001-04:00

Fraudulent Energy Credits

Recent reports from the Treasury Inspector's office have shown that the IRS allowed many energy credits to be given to folks that did not qualify for the credits. These credits are for taxpayers performing energy efficient improvements to their main home. Apparently, credits were given to prisoners, taxpayers under 18 years of age, and taxpayers who did not own a residence.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

Increase in Mileage Rates!!!

2011-06-27T13:56:00.001-04:00

Increase in Mileage Rates!!!

The last time we had such a large increase in the price of gas was in 2008. That year, the IRS increased the mileage rate in the middle of the year, creating a great benefit to taxpayers, while creating some confusion for tax preparers trying to complete the return at the end of the year.

Taxpayers will get the benefit of this increase for 2011 also for the second half of the year. Effective July 1, 2011, the business standard mileage rate increases from 51 cents to 55.5 cents. The medical and moving mileage rate will be 23.5 cents, up from 19 cents, while the charity mileage rate will stay unchanged at 14 cents.

The old rate will be effective for the months of January-June 2011, requiring taxpayers to split their mileage between the first half of the year and the last half of the year to calculate the two separate deductions.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

Increase in Medicare Tax

2011-05-31T12:35:00.001-04:00

Increase in Medicare Tax

Many folks have not noticed yet that one of the ways that the Health Care Reform is going to get funded is an increase in the Medicare tax, starting in 2013.

For taxpayers with income over $200K ($250K if married), there will be a Medicare tax of 3.8% imposed on any investment income on the tax return. Investment income would include interest, dividends, capital gains, rents, and royalties.

Currently, Medicare tax is only imposed on earned income and is withheld from wages, with the exception of the self-employed, who must pay it with their tax return filing in the form of the Self-Employment tax.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

Small Firms Get W-2 Reporting Break!

2011-05-24T14:39:00.005-04:00

Small Firms Get W-2 Reporting Break!

New regulations requiring employers to include the employer costs of health insurance on the employee's W-2, have been suspended for all employers in 2011 and for those employers with less than 250 W-2s in 2012. Larger employers will be required in 2012 to comply with this requirement.

The amounts included were not intended to be included as taxable income, rather only to illustrate to employees how much employers have spent on their behalf for health insurance.

This was a part of the health care reform law that passed in 2010.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

1099 Requirement Repealed!

2011-05-20T14:39:00.001-04:00

1099 Requirement Repealed!

You may recall that included in the Health Care Reform law of 2010 was a requirement for Forms 1099 to be sent to almost everyone, including corporations and those providing materials and goods, starting with payments in 2012. This was also to be required for landlords as well.

Good News ---- This was recently repealed and will no longer be a requirement! This would have been a major bookkeeping headache, and shows that Congress can actually correct a wrong. Now they have to find another way to pay for the Health Care Reform.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

IRS Whistleblowers Must Pay Taxes on their Reward

2011-05-02T15:03:00.001-04:00

Whistleblowers Must Pay Tax on their Reward

The IRS has long rewarded those who turn in others for not complying with the tax laws. Sometimes these rewards can be as high as 30% of the amount that the IRS collects.

The IRS is now withholding tax on the payments to these whistleblowers to make sure that they pay their taxes.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

Landlords Getting More IRS Attention

2011-04-15T12:48:00.001-04:00

Landlords Getting More IRS Attention

The IRS has stated that they intend to pay more attention to those taxpayers with rental income, and particularly rental losses, by auditing more returns that have Schedule E (rental income) included in the filing.

For 2011, the Schedule E will also be changed to obtain more information about the property itself.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

IRS Audits Are Increasing

2011-04-08T12:51:00.000-04:00

IRS Audits Are Increasing

1.11% of individual returns were audited in 2010, and for those with more than $1 million of income, the rate is 8.36%.

High income taxpayers, self-employed taxpayers, as well as folks claiming the earned income credit usually draw the most interest from the IRS.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

Reimbursable Employee Business Expenses Not Deductible?

2011-04-01T12:53:00.002-04:00

Reimbursable Employee Business Expenses Not Deductible?

Folks that are not reimbursed for expenses that they incur for their job usually are able to deduct these expenses on Form 2106 each year on their tax return.

In a recent court ruling, it was determined that these expenses are not deductible if your employer has a policy stating that they are reimbursable … whether or not you were reimbursed.

Therefore, a deduction is not allowed on “reimbursable” expenses simply because you did not request reimbursement from your employer.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

IRS Raises Tax Lien Amount

2011-03-25T09:38:00.000-04:00

IRS Raises Tax Lien Amount

Unpaid taxes will eventually generate a tax lien if they continue to be unpaid. The IRS has increased the amount of unpaid taxes it will allow before it files a tax lien.

In the past, a tax lien could be filed if taxes owed were more than $5000. The new minimum will be $10000 of back taxes owed before a lien is filed.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

IRS Increases Interest Rates

2011-03-18T09:34:00.000-04:00

IRS Increases Interest Rates

Effective March 31, the interest rates for individuals for unpaid taxes will rise to 4%, but the IRS will also pay 4% interest on late refunds. The corporate interest rate will rise to 6% for unpaid taxes, while the IRS will be paying 3% to corporations on late refunds.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

Tax Due Date Extended to April 18th!!

2011-03-11T09:30:00.002-05:00

Tax Due Date Extended to April 18th!!

Because to D.C. Emancipation Day, the due date for individual tax returns this year will be Monday, April 18th!

As an added bonus, the due date for next year will again be extended until April 17th, due to this holiday.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

Tax Break for the Self-Employed for 2011

2011-03-07T09:30:00.000-05:00

Tax Break for the Self-Employed for 2011

For self-employed individuals, there is a tax break in force for this year only.

In calculating the self employment tax on your earnings for 2011, you may subtract the health insurance premiums that you paid, this would also include Medicare Part B and Part D premiums.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

Social Security Wages for 2012

2011-02-25T10:24:00.000-05:00

Social Security Wages for 2012

Providing the first increase in several years, the Social Security Administration expects the base wages for 2012 to be $110,100.

Keep in mind also that the 2% employee break in your paycheck will expire at the end of 2011, decreasing your take home pay starting in 2012. The current 4.2% Social Security withholding will return to the old rate of 6.2% in January 2012.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

IRS Finally Accepts Schedule A

2011-02-18T09:34:00.000-05:00

IRS Finally Accepts Schedule A

The IRS has finally began acceptance of the Schedule A. February 15th was a big day as there were loads of returns filed that had been just waiting for the acceptance of the form for Itemized Deductions. Basically, anyone with a deduction for charity donations, mortgage interest, medical expenses, or real estate taxes could not file their taxes until this week. The IRS is flooded this week with returns, but should soon catch up.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

IRS Will Accept Schedule A on February 14th

2011-02-07T13:43:00.000-05:00

IRS Will Accept Schedule A on February 14th

The IRS will begin to accept e-filing of the Schedule A (Itemized Deductions) on February 14th.

The e-filing of the form that taxpayers use to itemize their deductions has been delayed this tax filing season, because Congress was so late with the new tax laws.

The tax law was passed so late in 2010 that the IRS computer programmers are just now catching up, inconveniencing a lot of taxpayers anxious to file their returns and get their refunds.
Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

IRS Has Sloppy Accounting Skills

2011-02-04T15:02:00.002-05:00

IRS Has Sloppy Accounting Skills

Apparently, the IRS has some very questionable accounting skills, and many instances where the right hand does not know what the left hand is doing.

News report just out that the IRS has renewed several contracts with its own vendors/subcontractors, where the vendor actually were delinquent in their income taxes.

Ooops!

Call our office at 804-798-9408 or email us for further info.

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Increased 1099 Reporting Requirements to be Repealed?

2011-01-27T15:02:00.001-05:00

Increased 1099 Reporting Requirements to be Repealed?

The much talked about increased requirements for 1099 reporting apparently is going to be repealed before it even gets started.

If you recall the new health care legislation in 2010 has a stipulation in it that required 1099s to be issued for payments to any vendor paid more than $600 during the year, including corporations, for goods and services. Basically creating a requirement that a 1099 would need to go to everyone for everything.

The word that we are getting now is that the Obama representatives and the tax writers both believe that this would not be a good thing, so it should just be a matter of time before this idea is completely scrapped.

Good thing for everybody.

Stay Tuned. We will keep you informed.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

No More OTC Drugs from Flexible Spending Accounts

2011-01-21T10:25:00.001-05:00

No More OTC Drugs from Flexible Spending Accounts

Starting January 1, 2011, new rules regarding Health Savings Accounts (HSAs), Health Reimbursement Accounts (HRAs), and Flexible Spending Accounts (FSAs) eliminate over the counter medications from the list of qualifying expenses that can be paid or reimbursed from these plans.

This is a huge blow to these plans.

Call our office at 804-798-9408 or email us for further info.

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Energy Tax Credits Lower in 2011 !!

2011-01-14T11:33:00.000-05:00

Energy Tax Credits Lower in 2011 !!

The energy tax credit has fallen from 30% in 2010 to 10% in 2011, and the $1500 limit has been reduced to $500. There are also further limits on the type of energy expense that you have.

Also, as a further tax bite...the credits taken in prior years will be counted toward the limit of $500.

Call our office at 804-798-9408 or email us for further info.

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More Health Care Controversy

2011-01-07T11:44:00.001-05:00

More Health Care Controversy

A recent district court case ruled part of the new health care reform law unconstitutional.

In Virginia v. Sebelius, DC, Va., the court stated that the requirement that people buy medical insurance by 2014 or else pay a fine was over and above the limits of powers that Congress has.

Ultimately, this requirement will end up in the hands of the Supreme Court.

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New Payroll Withholding Tables

2010-12-31T11:25:00.002-05:00

New Payroll Withholding Tables

Since the new tax law has finally passed, new payroll withholding tax tables have been created by the IRS which reflect the repeal of the Making Work Pay Credit. The IRS is giving employers until January 31, 2011 to get all the tax tables corrected, and adjustments can be made in later January paychecks to make withholding corrections from earlier January paychecks.

Call our office at 804-798-9408 or email us for further info.

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Payroll Tax Deposit Change !!

2010-12-23T11:43:00.000-05:00

Payroll Tax Deposit Change !!

Starting in 2011, banks will no longer accept the payroll tax payment coupons, Form 8109, that businesses have used in the past.

Businesses will be required to make payments electronically, using either telephone or internet connection. If your business has not already enrolled, you may enroll for electronic payments at http://www.eftps.gov/.

Call our office at 804-798-9408 or email us for further info.

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More Money in Your Pocket For 2011 !!

2010-12-23T10:21:00.001-05:00

More Money in Your Pocket For 2011 !!

As a result of the newest tax package to go through Congress, you will have more money in your pocket for next year!

In the past, the Social Security Tax withheld from employee's paychecks has been 6.2% of their wages up to certain annual dollar limits.

For 2011, the Social Security Tax withheld from employee's paychecks will be 4.2%, instead of the normal 6.2%. This should add up to $2,136 in each employee's pocet for the year.

Employers were required to match the 6.2% in the past, and will still be required to pay in the 6.2%, but the employees will certainly enjoy the break for now.

BEWARE - Do not get used to the extra money!! In 2012, the rate goes back to 6.2%!!

This will also apply to those self employed sole proprietors who pay the "Self-Employment Tax".

Call our office at 804-798-9408 or email us for further info.

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Source : The Kiplinger Tax Letter

Standard Mileage Rates for 2011

2010-12-22T10:34:00.003-05:00

Standard Mileage Rates for 2011

The IRS has issued the standard mileage rates to be used for 2011.

Business Mileage Rate
For Business purposes, the IRS standard mileage rate for 2011 will be $0.51 per mile, up from $0.50 in 2010. Businesses that have less than five vehicles can use this rate, and the limit on the number of vehicles may be changed in the future.

Medical and Moving Mileage Rate
For medical and moving purposes, the IRS standard mileage rate for 2011 will be $0.19 per mile, up from $0.165 in 2010.

Charitable Mileage Rate
For charity purposes, the IRS standard mileage rate will be $0.14 per mile, which is no change from the 2010 rate.

Parking and tolls can be included in addition to the IRS standard mileage rate, as they are not included in the standard rates, but you cannot add in repairs, maintenance, or fuel costs if you use these rates.

Call our office at 804-798-9408 or email us for further info.

Visit our website at http://www.thomas-cpas.com/

Source: The Kiplinger Tax Letter