May 10, 2010
Tax Court takes broad view of personal service
IRS issues forms, instructions for HIRE Act employer tax
IRS examiners told to carefully observe operations of
cash intensive businesses...
TIGTA targets withholding shortfalls among higher-income
IRS holds to timetable on reporting of uncertain tax
AL - Married taxpayer filed separately but was not
permitted to itemize deductions...
AK - Initiative to allow residential property exemption
AZ - Food and drinks served at charter schools will be
AR - Liability for consumer use tax clarified...
CA - Federal extension relief for Haiti relief workers
CO - Corporate disclosure requirement regulations
CT - Nexus presumption bill introduced...
DE - Law allows taxpayers to direct refunds into college
DC - Filing guidance issued for same-sex spouses...
FL - Procedures for value adjustment boards adopted...
GA - Federal conformity, decoupling bill passes general
HI - Qualified high technology business comfort rulings
ID - Credit for charitable contributions temporarily
increased and expanded...
IL - Tax should be refunded in full on merchandise
IN - Mortgage deduction requirements amended...
IA - Enterprise zone application period extended;
certain limitations removed...
KS - SST conformity updated...
KY - Extension of tax incentive agreements for economic
development projects available...
LA - Rule enacted regarding special assessment levels,
ME - Proposed apportionment rule amendments, military
spouse guidance announced...
MD - Credit for hiring unemployed workers explained...
MA - Interest rates hold steady for second quarter of
MI - True cash value of leasehold property was actual
MN - Adoption of federal provisions discussed...
MS - Exemptions enacted for clean energy, aerospace, and
data center businesses...
MO - Attorney General approves content, form of proposed
constitutional amendment summary...
MT - Trend tables for valuing property amended...
NE - Governor vetoes exemption for nonprofit health
NV - SST rules adopted...
NH - Filing for single-member LLCs discussed...
NJ - Madoff investment loss computation notice
NM - Agricultural biomass credits enacted...
NY - Industrial development agency exemption denied...
NC - Governor proposes tax relief for small businesses,
hiring credits, More...
ND - Notices regarding Military Spouses Residency Relief
OH - Direct marketing sales to wholesalers were
OK - Emergency medical responder death benefits
OR - Impact of unemployment on enterprise zone exemption
PA - Military spouses residency relief act discussed...
RI - Combined reporting bill introduced...
SC - Ruling discussing Military Spouses Residency Relief
SD - Tax breaks for specified paraplegic individuals
TN - Large greenhouses were real property, not personal
TX - Homestead exemption continuance clarified...
UT - Taxability of payroll services and software
VT - Valuation of single-family home not arbitrary...
VA - Green jobs credit enacted...
WA - Legislation addresses annexations by cities located
within RTA boundaries...
WV - Participation in treasury offset program
WI - Assembly passes job creation tax benefit bill...
WY - Exemption provided for community development
IRS ramps up guidance on new small employer
health insurance tax credit
The IRS is moving quickly to
alert employers about a new tax credit for health insurance premiums.
The recently enacted health care reform package (the Patient Protection
and Affordable Care Act of 2010 and the Health Care and Education
Reconciliation Act of 2010) created the small employer health insurance
tax credit. The temporary credit is targeted to small employers that
offer or will offer health insurance coverage to their employees. The
credit, like so many federal tax incentives, has certain qualifications.
Please contact our office and we can arrange to review in detail how
the credit may cut the cost of your business's health insurance
premiums. The dollar benefits of the credit are substantial and they
apply immediately to 2010 premium costs. More...
More federal tax legislation expected soon
returned from its spring recess in April to a full agenda of tax
legislation that will impact individuals and businesses. Lawmakers are
hoping to complete work on as many bills as possible before their
Memorial Day recess but the Senate's timetable may be slowed by many
non-tax issues. Among the most pressing bills are a package of tax
extenders and estate tax relief. Many taxpayers are also waiting to
learn the fate of the 2001-2010 individual marginal tax cuts and the
popular first-time homebuyer tax credit. More...
IRS updates change-of-address notification
If you have or are planning to move - whether it's
a change of personal residence or a change of business address - you
want the IRS to know about your change of address. The IRS has recently
updated its procedures for taxpayers to follow when notifying the IRS of
a change of address. The IRS uses a taxpayer's "address of record" for
mailing certain notices and documents that the agency is required to
send to a taxpayer's last known address. More...
FAQ: Are individuals now required to purchase
The answer is no for 2010, but yes, in
practical terms, for 2014 and beyond. The health care reform package
(the Patient Protection and Affordable Care Act of 2010 and the Health
Care and Education Reconciliation Act of 2010) does not require
individuals to carry health insurance in 2010. However, after 2013,
individuals without minimum essential health insurance coverage will be
liable for a penalty unless otherwise exempt. More...
How Do I: Claim residential energy credits?
are two important energy tax credits that can benefit homeowners in
2010: (1) the nonbusiness energy property credit and (2) the residential
energy efficient property credit. Collectively, they are known as the
"home energy tax credits." With the home energy tax credits, you can not
only lower your utility bill by making energy-saving improvements to
your home, but you can lower your tax bill in 2010 as well. Eligible
taxpayers can claim the credits regardless of whether or not they
itemize their deductions on Schedule A. Your costs for making these
energy improvements are treated as paid when the installation of the
item is completed. More...
May 2010 tax compliance calendar
individual or business, it is your responsibility to be aware of and to
meet your tax filing/reporting deadlines. This calendar summarizes
important tax reporting and filing data for individuals, businesses and
other taxpayers for the month of May 2010. More...
Tax benefits give added incentives to
If you're thinking about setting up employees
as telecommuters, you're not alone. Businesses ranging from large
multi-nationals to small shops know that telecommuting not only can
improve worker morale and performance, it can also save you and your
employees money. What's not to like about zero commuting costs and no
office rent? You can also sell the benefits of telecommuting by alerting
employees to some significant tax breaks. More...
FAQ: Are employer-provided cash incentives to
purchase hybrid vehicles taxable?
Yes. If you received a cash
incentive from your employer to help you purchase a hybrid vehicle, the
IRS treats it as taxable compensation. More...
How do I...calculate capital gains tax on the
sale of a collectible?
Uncle Sam takes a tax bite out of
almost every asset sold and collectibles are no exception. Indeed,
collectibles are currently subject to one of the highest rates of
federal taxation on investment property. Capital gain from the sale of a
collectible is taxed at 28 percent. More...
How do I? Deduct a contribution of clothing or a
household item under the new rules?
Every year, Americans
donate billions of dollars to charity. Many donations are in cash.
Others take the form of clothing and household items. With all this
money involved, it's inevitable that some abuses occur. The new Pension
Protection Act cracks down on abuses by requiring that all donations of
clothing and household items be in "good used condition or better." More...
FAQ: When is the best time of year to contribute
to an IRA?
A: If you have the money, contributing to your IRA
immediately on January 1st or as soon thereafter as possible is the
best strategy. The #1 advantage of an IRA is that interest or other
investment income earned on the account accumulates without tax each
year. The sooner the money starts working at earning tax-free income,
the greater the tax advantage. With a traditional IRA, that tax
advantage means no tax until you finally withdraw the money at
retirement or for a qualified emergency. In the case of a Roth IRA, the
tax advantage comes in the form of the investment income that is never
FAQ: When are business meal deductions
Only 50 percent of the cost of meals is generally
deductible. A meal deduction is customarily allowed when the meal is
business related and incurred in one of two instances: More...
Late-breaking news: Congress passes extenders and
much more in new tax law
In a final session, Congress
approved a $45.1 billion package of tax extenders and other tax breaks
during the night of December 8-9. The Tax Relief and Health Care Act of
2006 (H.R. 6111) renews many valuable - but temporary - tax breaks for
individuals and businesses, including the state and local sales tax
deduction, the higher education tuition deduction and employer tax
incentives. The new law also extends some energy tax breaks, makes
Health Savings Accounts (HSAs) more attractive and creates new tax
How do I? Compute the Child Care Credit
of a child under age 13 can take a tax credit for child care expenses
to enable them to work. The credit can be taken for care of two or more
children. Child care expenses are amounts you paid for someone to come
to your home, for care at the home of a day care provider, and for care
at a day care center. More...
FAQ: What are catch-up retirement savings?
many cases, employees can elect to reduce their salary and contribute
the amounts to a retirement plan. These plans include 401(k) cash or
deferred arrangements, 403(b) tax-sheltered annuities, eligible Code
Sec. 457 deferred compensation plans of state and local governments and
tax-exempt entities, simple retirement accounts, and plans for
self-employed persons such as a SEP individual retirement account (SEP
FAQ: Does filing at any particular time or manner
increase my odds for an audit?
If you call attention to your
return, it probably will be noticed. Whether by writing in red across
your return a "tax protestor" slogan, by not signing your return, or by
not filling in all required lines, you will get your return noticed and
at the very least you'll get a letter asking to further explain your
position. Absent such blatant attention-getting behavior, however, your
chances of audit depends upon the numerical amounts you place on your
return and how they compare to certain norms determined by IRS computers
(and kept secret from the public). Some audit selection is also done
randomly, although those odds are less than a fraction of one percent
under current practice. More...
FAQ: What is tax risk management?
risk management" is a fairly recent term first used by large accounting
firms to underscore to businesses the opportunities and pitfalls
inherent within the particular tax positions taken by a business at any
point in time. The collapse of Enron and WorldCom, and Congress's
response through Sarbanes/Oxley legislation, have elevated corporate tax
departments from what were once sleepy backroom operations to key
participants in corporate bottom-line performance. Tax reserves and
other tax forecasts now take a more prominent role in SEC-required
disclosure and their resulting impact on shareholder value. Corporate
boards and top executives are now held directly responsible for
tax-related mistakes. More...
How Do I? Compute the optional state and local
sales tax deduction
End-year 2006 tax legislation extended
the opportunity to take the optional federal sales tax deduction for tax
years 2006 and 2007. The deduction remains the same as in past years,
although the IRS standard tables used to figure sales tax in lieu of
keeping receipts changes each year due to cost of living and other
How do I ... Split my tax refund?
of getting a paper check, you may want to have your refund deposited
directly into your bank account or other financial account. Forms 1040,
1040A, and 1040EZ have a line for designating direct deposit of your
refund, right after the line showing the amount of your refund. More...
FAQ: Must I retain original business expense
receipts if I computer scan them?
No, taxpayers may destroy
the original hardcopy of books and records and the original computerized
records detailing the expenses of a business if they use an electronic
storage system. More...