Alternative minimum Tax

The newly passed and signed debt extension bill contains an estimate that there will be more revenue (taxes) raised when the Bush era tax extensions expire after the 2012 elections. One of those provisions that our wonderful Congress will let expire is the AMT patch. What that means is that another 20,000,000 yes, twenty million more taxpayers will be subject to AMT.

What does that mean for the average Joe. Well the average Joe really does not pay any tax except social security tax and he thinks that SS is a retirement plan.

For those of us who actually pay taxes it means on average and additional $3000 more tax to pay each year to our wonderful government.

They really have the taxpayer's problems in mind. NOT!!!

2011 Tax organizing

I realize that now is not usually the time to think about tax filings but it really is. You have six months to get organized again. If you need help in organizing your business records or charitable deductions just email us and we will send you free of change a worksheet for your industry or for those charitable expenses. Remember, gifts to charities are one of the last item on your tax return that does not change alternative minimum tax.

Tax Extension

The outgoing Congress decided to extend for two years the current tax code that has been around for several years. Some out there call it the Bush Tax Cuts. Actually it is Congress that makes these laws and the President is the one that signs them into law. It would be better if we just called this the current tax code.

There are some items that will need to be addressed this coming year. The largest one is the 1099 issue that must change. For any business expense in 2011 a business either large or small must send a 1099misc. to the vendor. This means your electric company, the telephone company as well as the guy that cleans your business auto. Yes, the detail man. So what you need to do if you have a business is obtain the tax ID# of those that you write checks to.

If you need a W9 which is the form that is used to get that information then to to my website at www.traxtax.com and look under the forms tab.

Oh, ya if you do not send in these 1099 forms you will be fined. The current fee is $50 per form. Don't you just love this tax code????? NOT

Ending Bush Tax Cuts Doesn't Mean Wealthy Will Pay More: Tax Expert - CNBC

Ending Bush Tax Cuts Doesn't Mean Wealthy Will Pay More: Tax Expert - CNBC

Tax on the Sale of your Home

There are more and more details coming out of the new healthcare bill. The newest one that I have investigated in the 3.8% tax that will be added to many taxpayers that sell their homes beginning in 2013. Yep, the good old folks in our government have figured out a way to tax you when you sell your home. There are certain upper limits to this and you would need to have an adjusted gross income of over $200,000 as an individual and $250,000 as a joint filer but if you have any capital gains and or investment income and or rental income and sale of investment property you could fall into this category. Many more will fall into this area when Congress cancels the $250,000 exclusion for an individual and $500,000 for a couple on the gain on the sale of your home. When will they do that you ask? My best guess is December 31, 2012.

WHAT WONDERFUL PEOPLE WE ELECT YEAR AFTER YEAR!

New rules for business owners

New Healthcare Law Expands Volume of 1099 Reporting for Businesses

As more research is being done on the recent, 2,000+ page health care reform bill, one hidden provision which hasn't been given much attention is the fact the new law will require businesses to dramatically increase the amount of their information reporting to the IRS relating to the amount they pay for goods and services on an annual basis.

Under current law, if a business pays $600 or more for services rendered by a single unincorporated payee during the year it is required to report the total amount of those payments to the IRS via form 1099-MISC. Payments for goods purchased, payments to corporations, exempt organizations and retirement plans have historically been exempt from this reporting requirement. Section 9006 of the recent healthcare reform bill (HR 3590) drastically changes this.

Starting in 2012, businesses will be required to report all payments greater than $600, regardless of the status of the payee or what the payments are for to the IRS on Form 1099-MISC.

This will have a dramatic impact on many businesses. The new requirement means additional paperwork, information gathering, administrative work and obviously additional costs for businesses. For example, if your business purchases a new copier for $1,000, you will need to obtain the TIN (Taxpayer Identification Number) and home business address from the vendor/store that you made the purchase from and generate a 1099-MISC at year end reporting the purchase to both the IRS and the vendor. Multiply that times the number of different vendors you do business with and you will see the incredible amount additional work and cost that could be involved.

The goal of this provision is to make revenue and expense reporting by businesses more transparent in order to help the IRS catch under-reporting of income. There are still many questions surrounding this change, including how the new rules will be enforced by the IRS. It is anticipated the IRS will issue regulations sometime next year in order to help taxpayers comply accordingly.

Notice from "Business Filing Division

Many of my corporate clients have received a letter from the, Business Filing Division". Do not pay them anything. This is a scam. Follow this URL and see for yourself.

http://www.taxloopholes.com/connect/blog/megan-hughes/2009/08/have-you-received-mail-busines