We Can Provide Full Management Consulting for Your Business
We know your business. We know your financials. We can get you to the next level by listening to you and connecting you with customers and resources. We can make you look bigger than you may be. We can give you a plan on how to reach your goals.
Call Blaine at (978) 604-4253 to discuss.
2012 W-2 Box 12 Code DD: Are They Trying to Subject Employer Paid Health Insurance Premiums to Income Taxes ?
New requirements for 2012 W-22012 W2 reporting include employer paid health insurance premiums. With a several trillion dollar deficit I am wondering if they would see healthcare benefits as potential taxable income.
Debt Ceiling Negotiations Have Big Effect on Small Business
If the debt ceiling negotiations fail, and the United States defaults on obligations everyone will see a double digit increase in their interest rates on borrowing ,and the value of the US dollar will experience even further decline. Food and energy costs have already taken a hit because of the acceptance of the US government that the US dollar should be devalued because of our poor credit rating. Failure to accept a debt ceiling will unleash unlimited interest rates on any borrowing by US companies and also result in further price increases for commodities such as energy,food, and precious metals.
This means that any borrowing by small businesses will result in an increase of double digit basis points on any type of borrowing, be it lines of credit or debt secured by hard or soft assets.
According to Steve Wynn this will be another “wet blanket” on business formation and job growth.
Mitigate Tax Penalties and Interest By Paying On Time
If you calculate and pay your tax liability in a timely manner before the end of the year you may avoid tax penalties and interest for late payments which you would incur if you waited to pay them with your annual tax return.
Penalties and interest for late payments and late filings may amount to hundreds or thousands of dollars depending on the size of your business.
Let us insure that your tax liabilities are paid on time during the year to avoid IRS and/or MADOR penalties and interest.
Call Blaine at (978) 604-4253
Take A Quarter Year Check Up for Your Business. How Were You Doing for the First Three Months of 2011 Versus the First Three Months of 2012??
Every business has to take a mid year check up. Every business should compare 2011 to 2012 to to the same period for 2012. If your revenue is down you have to find out why. If your expenses are up you must investigate the reason.
You may have tax liabilities you didn’t anticipate even though business was down from 2011. Or you may be paying too many taxes.
Every business’ best practices should include an annual and rolling budget with monthly reports showing actual results to projected. You have to determine your target margin for products or services, and if you have more than one business line you should have a profit and loss statement that lets you drill down into the profitability of your various products and services.
We can also help you with pricing strategies and cost reduction strategies. Let’s both look “under the hood” of your enterprise and see what’s really going on. We believe mid year is an optimal time to do this so you can make “mid course corrections”.
Call Dr. Blaine at (978) 604-4253 for your mid year check up or email him at patstax@gmail.com.
The Cost Savings Facts About Our Accounting, Tax, and Bookkeeping Outsourced Services
If you hire a $15 an hour employee you will pay 7.65% in FICA taxes, 2-14% in state unemployment taxes, and .3 % in worker’s compensation insurance. So your $15 an hour employee is actually going to cost you around $ 21 per hour, not to mention the hike in your unemployment insurance if you have to fire or lay them off. If bookkeeping staff are added to make your total business employees 11 FTE’s (11 40 hour employees) in Massachusetts you will have to provide them with health insurance, which may cost more than the salary you pay them. Also $15 an hour is a low average for competent bookkeeping help, which may range up to $18-$20 per hour. At these rates total costs would range from $22 to $25 per hour. You would also have to add in costs for your own supervision and review or a third party who would perform high level tasks such as tax filings for substantially more than $25 per hour.
Outsourcers such as Patriot Tax and Bookkeeping, Inc. assume all these taxes and risks. All you will have pay is a reasonable rate per on going service on site or off site or special project and that’s that. We guarantee all our work per written corporate policies, so you can rest assured that you’re getting your money’s worth for the work done and the high level of the work done.
Call Blaine at (978) 604-4253 or email patstax@gmail.com.
Relief From the Leasehold Improvement 39 Year Life Through 2010 Section 179 Changes
Typically depreciated assets are recovered through the lifetime of their service. For a commercial lease this would be five years. Unfortunately for the lessee the congress has passed legislation that mandates that the recoverable life of leasehold improvements equal the recoverable life of the building costs, which are 39 years versus 5 years.
A temporary reduction to a 15 year cost recovery period was enacted by congress in 2004. This expired in 2009, so the cost recovery period for leasehold improvements reverted to the 39 year period.
For 2010 relief may be sought by revisions to Section 179 property, which now includes leasehold improvements. Rather than taking costs evenly over a 39 year period, leasehold improvements that are part of a lease, placed in service after three years in which the building was placed in service, and are contained in Section 1250 property (property that is disqualified for long term capital gain treatment). The cost of enlargement of the building, elevators. escalators, and any structural improvements of common areas are not qualified for the immediate Section 179 expense.
The limit for Section 179 expense of leasehold improvements is $250,000 of the overall annual limit of $500,000.
Section 179 Change for 2010: Certain Real Property Improvements May be Immediately Expensed
The Section 179 Deduction for Items, which may be subject to depreciation has always allowed an immediate deduction of expenses for capital items. Most accountants choose not to avail their clients of the election when they start their businesses due to the initial tax losses of a start up electing rather to use the depreciation over time so it may be applied to net sales as the business grows.
New for 2010 is the Section 179 deduction for not only equipment and vehicles but for capital improvements to real property.
The immediate expensing of all costs associated with real property improvements include:
Any improvements to owned property subject to depreciation.
Any leasehold improvements that are part of a lease, apply only to space occupied by the lessee, does not involve elevators, escalators, enlargement of the building, common areas.
Taxpayers can deduct up to $250,000 in any year subject to taxable income limitations.
Any unused Section 179 deduction expenses may be depreciated in following years.
Rental Property Tax Reporting Tips
Rental property activities are typically reported on the federal Schedule E Income from Rental property on your 1040 individual income tax return unless you are in the business of owning rental property such as a licensed broker, then rental activities would be reported on Schedule C if a sole proprietor or sole member LLC ,or on corporate , partnership, or trust tax returns. Rental income is reported on a cash basis and you must indicate whether you received the information through a 1099 from the renter.
You may deduct all expenses associated with renting the property. These include advertising, management fees,qualified mortgage interest, property and liability insurance, property taxes, water, sewer and other utilities not paid by renters, repairs and maintenance, snow plowing and landscaping, depreciation on the property, and any landlord expenses incurred including travel to and from the property, office supplies, and tools and supplies, telephone expenses, and any other personally reimbursed costs incurred.
Building depreciation costs include the acquisition price for the building(s) only and not the land costs. Any building improvements will be added to the purchase price as depreciable costs. For residential rental property the building costs are depreciated over 27.5 years. Upon sale of the rental property any depreciation claimed must be subtracted from the tax basis of the sale. This means any depreciation taken on the property will be recognized as a short term or capital gain if the property was held one year or longer.
If the property is owner occupied you must allocate costs according to the square feet of the rental property to total square feet. Common areas will be allocated according to the rental proportion of square feet. If you occupy the property the portion of your main residence’s property tax and mortgage interest costs may be deducted as itemized deductions on Schedule A of your personal tax return.
Patriot Poll Says 57% Of Customers Want You To Call Them on Monday
Patriot Tax and Bookkeeping, Inc, has recently conducted research as to what day customers preferred to be contacted by their vendors. A random poll among business people in the Boston area has revealed that 57% preferred to be contacted on Monday and the rest to be contacted on Thursday. The theory behind these preferences is that people want to get the details of their businesses done early in the week to clear their schedules for marketing and managing overall operations for the rest of the week.