FAQ: How will the 2009 Stimulus Bill affect my taxes?
February 28, 2009
A: The “American Recovery and Reinvestment Act of 2009” includes over 300 changes to the Internal Revenue Code. A few of the highlights include:
- $400 per worker paid either through lowered withholding or a tax credit
- $250 one-time payment for individuals on a fixed income
- First time homebuyer credit increases and may not need to be repaid
- Education credits are increased in amount and availability
- Earned Income Tax Credit increases for 2009 and 2010
- The first $2400 of 2009 Unemployment benefits are not taxable
- Energy incentives are reinstated and expanded
- Business incentives include increased depreciation and more credits
- Watch out for the new COBRA insurance rules
Would you like a summary of the latest tax changes in an understandable format ? Call or email our office and we will send you a free copy!
FAQ: End-of-Year Charitable Contributions
A: ‘Tis the season for giving – AND for tax planning. Keep these rules in mind for your end-of-year charitable gifts:
- ALL contributions (regardless of amount) must be substantiated by a bank record, check, a credit card record, or a written acknowledgement from the charity. Contributions of $250 or more require written acknowledgement from the charity.
- The “charity” must be a 501(c)3 tax exempt organization. Contributions to individuals do not qualify.
- Contributions are only deductible for those who file a Schedule A, “Itemized deductions”.
For more information on these and other tax and accounting provisions, contact the professionals at Raak and Associates PC!
Have a Merry Christmas and a Happy (less “taxing”) New Year !!
FAQ: Can you help with Quickbooks?
A: QuickBooks® is currently the most widely used small business do-it-yourself accounting software, but most users need assistance in some way. This is a great time to review and correct your QuickBooks® file for year-end planning and tax preparation.
If you have questions about your accounts, or just feel your QuickBooks® file needs a check-up, you need the help of a QuickBooks® Professional Advisor. We can provide a solution for your business, from QuickBooks® set-up and troubleshooting to full financial statement and tax preparation.
QUICKBOOKS CLASSES REGISTERING NOW! From introductory to advanced users, we offer a class that’s right for you. Contact us at 530-9351 or qb@Raakcpa.com for more information.
FAQ: Highlights of Emergency Economic Stabilization Act
October 7, 2008
A: The center of another new tax bill for 2008 is the financial bailout package. Highlights include:
- Three-year extension for home mortgage debt forgiveness.
- Increase in AMT exemption amounts for individuals.
- Extension of 2007 tax breaks, including the election to deduct state and local general sales tax, above the line deduction for higher education expenses and educator expenses.
- New tax measures, including quick 5-year depreciation for many types of farm property.
- Extension of the residential energy efficient property credit.
Tax laws are constantly changing, so it is important to have a tax and accounting advisor to help you understand these changes. For additional information on this new tax bill or other accounting an tax matters, contact our office!
FAQ: What are the advantages of converting a traditional IRA to a Roth IRA?
The big advantage is that once in a Roth, the money and earnings can be withdrawn tax free in retirement, with some limitations. The decision on whether to convert a traditional IRA or 401(k) into a Roth usually comes down to whether the taxpayer will be in a higher tax bracket when they retire than they are in today. There are also estate planning factors to consider.
When a traditional IRA is converted, income tax is due on the amount converted. For 2010 only, if you convert to a Roth, you have the option of paying the tax bill with your 2010 return or spreading it over two years. The taxes will be based on the applicable tax rates for those years so there is the risk of a tax increase for 2011 if you elect to spread the tax over two years.
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Typically, employers have two basic payroll processing options – use an in-house method or outsource it. An effective business owner reserves specific tasks that only he should do for himself and delegates other tasks to qualified employees or outsourced professionals. Generally speaking, business owners save time and money by hiring qualified employees to accomplish long-term, frequent tasks and outsourcing short-term, less frequent tasks such as payroll. |
Raak and Associates PC prepares the following income tax returns: 1040 (Individual) We not only prepare and e-file income tax returns, but we are also available to assist you with your tax planning and consultation needs. |