Archive for the ‘Taxes’ Category

Hi everybody!  I know it has been a while since we have talked, but I am back.

I wanted to take a couple of minutes to address a rumor that has been going around the internet lately.  The rumor involves the taxation of health insurance benefits for employees.  Many emails and blog posts are claiming that, under the new health insurance law, the value of the health insurance provided by your employer is going to be reported on your W-2 and included in your taxable income.

Well, as with most internet rumors, there is some truth to the statement and some fiction.  The truth is that, starting in 2011, employers will be required to report the value of employer provided health insurance on employees’ W-2 forms.  However, the law does not make the benefits taxable to the employee.  So starting next year, you will see the value of your employer provided health insurance on your W-2, but the taxation of those benefits has not changed.

I hope this helps clear up this issue for you.  As always, please feel free to call or email me if you have any questions regarding your particular tax situation.

Until next time,

May you live as long as you want,
And never want as long as you live.

Chuck Ransleben

Hi everyone!  I know it has been a while since I posted on my blog.  Things got pretty busy leading up to April 15th and they hardly seem to have slowed down since then.

I wanted to mention to all of my friends that are employers a new tax break that could save some payroll taxes.  Earlier this year, Congress passed the HIRE act that allows employers to not pay the employer’s portion of social security taxes (FICA) on qualified employees for the remainder of 2010.  A qualified employee is an employee that meets the following qualifications:

• They have not been employed for more than 40 hours during the 60-day period ending on the date the employee begins employment with you

• They begin employment with you after February 3, 2010, and before January 1, 2011

• They are not employed by you to replace another employee unless the other employee separated from employment voluntarily or for cause and

• They are not related to you (interestingly, your spouse is not related to you for this qualification)

If you have an employee that meets these qualifications, have the employee complete a Form W-11 (available here) to verify their qualifications regarding their prior employment and keep it in your records.  Please keep in mind that you must still withhold the employee’s portion of FICA from their pay and submit that to the IRS with your normal payroll tax deposit.  Also, this tax saving opportunity does not apply to Medicare taxes.

If you have any questions regarding this tax saving opportunity, please feel free to contact me.

Until next time,

May the road rise to meet you.
May the wind be always at your back.
May the sun shine warm upon your face.
And rains fall soft upon your fields.
And until we meet again,
May God hold you in the hollow of His hand.

Chuck Ransleben

As we head into the time for filing your 2009 income tax returns, I thought I would pass along some helpful tips.

Making Work Pay Credit – A new law passed during 2009 created the “Making Work Pay” credit.  The credit is equal to 6.2% of your earned income in 2009 with certain limitations.  The total credit is limited to $400 for a single person and $800 for a couple filing jointly.  There are also limitations as your income exceeds $75,000 for a single person and $150,000 for a couple filing jointly.  You should calculate the credit on Schedule M and report it on line 63 of your tax return.

Bonus Depreciation -  Bonus depreciation is an acceleration of the depreciation deduction for most new business property placed in service during the year.  This provision has been adjusted numerous times over the last few years.  For 2009, the bonus depreciation is equal to 50% of the cost of the new assets.  In other words, you can immediately deduct 50% of the cost of the new assets and also write off the remainder of the cost over the life of the assets.  This is a great opportunity for you to take a substantial deduction for 2009 and reduce your current tax liability.  Please note that this provision only applies to new assets purchased and vehicles have separate limitations that could reduce your current deduction.

Information Forms From Brokers – As some of you may have already discovered, the brokerage houses have received automatic extensions of time to provide their information reporting forms (Forms 1099) to their clients this year.  This extension is until February 15, 2010.  They received this extension because it has been difficult for them to compile all of the information necessary to mail the forms by January 31st in the past.  In past years, this has resulted in many of them issuing one or more corrected statements to their clients.  Hopefully, this extension will solve the problem of multiple corrections.  If you have brokerage accounts, I recommend that you provide all of your other tax information to your CPA or other tax return preparer as soon as possible and then forward the brokerage information when you receive it.  This will allow your CPA or other tax return preparer to begin working on your tax return and help avoid a last minute rush to the April 15th deadline.  I would also recommend that you wait until after March 1st to finalize your tax return in case your broker sends you a corrected form.

If you have any questions about these tips or any other tax situation you may face, please feel free to call or email me.  I would be happy to help you.

Until next time,

Always remember to forget
The troubles that passed away.
But never forget to remember
The blessings that come each day.

Chuck Ransleben

Well it has certainly been an interesting week in America!  We came into the week with the Democrats in the Senate holding a filibuster proof majority and negotiations on the health care bill in full swing.  We leave the week with a Republican elected to the Senate to hold the seat previously held by Senator Ted Kennedy and the health care debate in complete turmoil.  What will come of all of this?  I’m not sure anyone really knows yet but I am willing to bet that we are going to see a lot of changes this year, including changes to our taxes.

One of the first changes that looks to come through this year is an opportunity to deduct certain 2010 charitable contributions on your 2009 tax return.  The bill that has passed the House and Senate allows you to deduct contributions for Haiti relief made after January 11, 2010, and before March 1, 2010 on your 2009 tax return.  The bill also relaxes documentation requirements for the deduction by allowing your telephone bill that reflects the name of the receiving organization, the date of the contribution, and the amount of the contribution to count as documentation for the donation.  President Obama is expected to sign the bill soon.

I am sure that this is just one of the many changes we will see to our tax laws this year.  As we work our way through 2010, please be sure to check back for the latest tax news and an occasional “tidbit” about other interesting topics.

Until then,

May you live as long as you want,
And never want as long as you live.

Chuck