jump to navigation

1099 Requirement Update | Tax Tip of the Week | No. 90 April 27, 2011

Posted by bradstreetblogger in : Tax Tip, Taxes, Taxes, Uncategorized , add a comment

Repeal of Form 1099 Filing Requirements

After intense lobbying efforts by the Ohio Society of CPAs and every other small business association, on April 14, President Obama signed legislation repealing the Form 1099 filing requirements that were imposed under the Small Business Jobs Act and the Pension Protection and Affordable Care Act.

The rules would have required businesses to report any purchases of goods or services of more than $600 a year from another vendor to the IRS on a Form 1099-MISC beginning in 2012. Owners of rental property were required to report payments of $600 or more to providers of services beginning in 2011.

As always, give us a call if you have any questions.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.

Rick Prewitt – the guy behind TTW

…until next week.

After Tax Season | Tax Tip of the Week | No. 89 April 20, 2011

Posted by bradstreetblogger in : Tax Tip, Taxes, Taxes, Uncategorized , add a comment

The Week After Tax Season

Aaaah……The week after tax season (and the first full weekend home in two and half months) is the best week in a tax accountant’s life!

We met a lot of new clients this year because of referrals from existing clients, and readers of our Tax Tip of the Week.  Thank you!  A referral is the best compliment we can ever receive.

Even though tax season is over—we will continue our Tax Tip of the Week mailing for the rest of the year.  We will keep you updated on the constant changes as well as spotlighting specific tax planning ideas.

If there are any special tax topics you would like us to cover, just send us an email or give us a call.

Again, thank you for making this one of most rewarding tax seasons yet.

As always, give us a call if you have any questions.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.

Rick Prewitt – the guy behind TTW

…until next week.

Filing For Extensions | Tax Tip of the Week | No. 88 April 13, 2011

Posted by bradstreetblogger in : Uncategorized , add a comment

Submit Extension Form 4868

If you haven’t filed your tax return by now, you should probably consider filing for an extension.  It is a lot easier to file for an extension than it is to amend a return later for a mistake you made trying to rush your return to completion.  Even more costly is if the IRS finds a mistake you made and assesses underpayment penalties and interest.

To file for an extension, you simply need to submit Form 4868.  After submitting this form, you now have until October 17, 2011 to timely file your return.  Note, however, an extension of time to file is not an extension of time to pay.  If you suspect you will owe some taxes, you must send a payment along with the extension.  This is true for your federal, state, school district and city returns.

Ohio will automatically accept the federal extension.  Some cities, however, require a special city extension form.  Also, some cities will not allow extensions if you only have W2 income.  Be sure to check with your work and/or resident cities before April 15th  (most cities are not recognizing the IRS extended filing date).

Another reason to file for extension is that some speculate your chances for an audit decreases for extended returns.  How?  One of the methods the IRS uses to select a return for audit is to select a random sample of returns filed by April 18th.   If your return is not in that sample—then you don’t get picked!

Editor’s Note: One of the pledges I make to all my clients is that my personal return will be the last one filed each year. When my most procrastinating client’s return is filed on October 17th —-mine is right behind it!  And has been that way for nearly 20 years!

As always, give us a call if you have any questions.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.

Rick Prewitt – the guy behind TTW

…until next week.

Deductions vs. Tax Credits | Tax Tip of the Week | No. 87 April 6, 2011

Posted by bradstreetblogger in : Tax Tip, Taxes, Taxes, Uncategorized , 3comments



Are You Getting the Credits You Deserve?

Tax Deductions are good….Nonrefundable Tax Credits are better….and Refundable Credits are great!

If, for example, you take a tax deduction for mortgage interest on your tax return you are simply reducing your taxable income.  This means that if your marginal tax rate is at the 25% level, you are saving $250 in taxes for every $1,000 spent on mortgage interest.

A nonrefundable credit, on the other hand, is a dollar for dollar reduction in your tax liability.
Examples of nonrefundable credits include:

Foreign Tax Credit
Education Credits
Dependent Care Expenses (Daycare)
Retirement Savings Credit
Child Tax Credit
Residential Energy Credit
Credit for Prior Year AMT
General Business Credit

Nonrefundable credits, however, are limited to your tax liability.  For example, if you have an energy credit of $1,500 and your tax liability is only $1,000, then your credit is limited to $1,000.

Refundable Credits are those that result in Uncle Sam giving you money!  Examples of Refundable Credits include:

Making Work Pay Credit
Earned Income Credit
Additional Child Tax Credit
American Opportunity Credit (Education)
First Time Homebuyer (expired)
Fuel Tax Credit
Adoption Credit
Health Coverage Credit

I had a couple come see me this year that have five children, two of which are in college.  They also installed a new energy-efficient HVAC system.  Their gross income was around $75,000.  After taking advantage of one part of the American Opportunity Credit for college expenses, the Child Tax Credit for those children under age 17, and the Residential Energy Credit their tax liability was eliminated.  In addition, they received an $800 Making Work Pay Credit, $2,000 Additional Child Tax Credit and $1,000 refundable credit for the second part of the American Opportunity Credit.  So their refund consisted of all the federal tax they had withheld plus $3,800 in refundable credits.

Give us a call to make sure you are getting the credits you deserve.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.

Rick Prewitt – the guy behind TTW

…until next week.

Hello world! April 1, 2011

Posted by admin in : Uncategorized , 1 comment so far

Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!