If you own your own business, it is imperative that you have a solid bookkeeping/accounting system in place. Not only will you need these records to complete your tax return, but you also need the information available to you to make the proper management decisions throughout the year.

After the enactment of the refundable American Opportunity Credit, Treasury inspectors estimate tax filers erroneously received $3.2 billion in credits for 2009 and 2010. Inspectors found the IRS was doing a poor job of policing returns, which contained these educational credits. (See TTW#87 for a refresher on refundable vs. non refundable credits.)

The 2012 optional standard mileage rate used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes is:- 55.5 cents per mile for business purposes- 23 cents per mile for medical or moving purposes- 14 cents per mile driven in service of charitable organizations

We wanted to take an opportunity to remind all our business owners that the 2011 Form 1099s are due to be filed in the coming weeks. Here’s a quick update.

For the first time since 2009 the earnings subject to Social Security is going up. In 2009 and 2010, the first $106,800 in earnings was subject to this 6.20% tax (12.40% if self-employed).

Hopefully, you followed some of the suggestions we outlined a couple of years ago in TTW #21 to organize your records. If you did, great! This will make filing your tax returns a lot easier this year. It also means that you, and your tax advisor, can spend more time on tax and financial planning issues for 2012 vs. looking back to 2011.