Let’s say it’s getting on April. You’ve finished your return, and you’re still in shock. You made a lot of money and paid a lot of bills. But now you’re looking at a tax bill that you just can’t afford to pay.
Check out the rest of this informative article. And remember, Denny & Company, LLP can help you with all the paperwork and arrangements with the IRS. We’ve been doing it now for over 24 years.
In an effort to boost the U.S. economy, Congress passed the Economic Stimulus Package Act of 2008 on February 7. The legislation will provide tax rebate checks to about 130 million households, starting sometime in May.
The package also contains business tax incentives and help for distressed homeowners. Here are the major provisions in the law.
Single individuals may be entitled to receive a one-time tax rebate of up to $600; joint filers may qualify for up to $1,200. The rebate amount begins to phase out for higher-income taxpayers, beginning at $75,000 of adjusted gross income for single filers and $150,000 for joint filers (based on 2007 tax returns). People who don’t pay income taxes may qualify for $300 rebates if they had at least $3,000 of earned income or tax liability of at least $1 in 2007. Social security income and federal payments to disabled veterans and their widows count as earned income for rebate purposes. Those who qualify for the basic rebates are also eligible for an additional $300 for each dependent child under age 17. Businesses may qualify for 50% bonus depreciation on qualifying new equipment purchases in 2008. The Section 179 expensing limit for 2008 is increased from the previous $128,000 to $250,000, and the 2008 phase-out threshold is increased from $510,000 of total equipment purchases to $800,000. The loan limits for Fannie Mae, Freddie Mac, and the Federal Housing Administration are increased, a provision intended to assist taxpayers during the sub-prime mortgage crisis.
If you need further details on the new law as you do your tax and business planning for 2008, please give us a call.
Here’s a great article on common deductions that taxpayers miss when filing their tax returns. Luckily, if you’re a client of Denny & Company, LLP, you haven’t been missing them. And there are many others, as well, that are commonly overlooked.
Occasionally, our clients find old Series EE bonds in their firesafe. To find out how much your government paper bonds are worth, the Treasury Department provides this simple-to-use calculator.
An interesting perspective of what it takes to become wealthy, from TheStreet.com
Be aware of what your mortgage broker may be getting you into with that “too good to be true” mortgage deal:
The increased reliance by both financial institutions and non-financial institution lenders on third-party brokers has created opportunities for organized fraud groups, particularly where mortgage industry professionals are involved.
Combating significant fraud in this area is a priority, because mortgage lending and the housing market have a significant overall effect on the nation’s economy. All Mortgage Fraud programs were recently consolidated within the Financial Institution Fraud Unit, even where the targeted lender is not a financial institution. This consolidation provides a more effective and efficient management over Mortgage Fraud investigations, the ability to identify and respond more rapidly to emerging Mortgage Fraud problems and a clearer picture of the overall Mortgage Fraud problem.
Each Mortgage Fraud scheme contains some type of “material misstatement, misrepresentation, or omission relating to the property or potential mortgage relied on by an underwriter or lender to fund, purchase or insure a loan.” The Mortgage Bankers Association projects $2.37 trillion in mortgage loans will be made during 2006. The FBI compiles data on Mortgage Fraud through Suspicious Activity Reports (SARs) filed by federally-insured financial institutions and Department of Housing and Urban Development Office of Inspector General (HUD-OIG) reports. The FBI also receives complaints from the mortgage industry at large.
Read more at the FBI’s site…
From webcpa.com:
New E-Mail and Phone Scams Use IRS Name
Washington, D.C. (Jan. 31, 2008)
By WebCPA StaffThe Internal Revenue Service warned taxpayers to beware of several current e-mail and telephone scams that use the IRS name as a lure.
The goal of the scams is to trick people into revealing personal and financial information, such as Social Security, bank account or credit card numbers, which the scammers can use to commit identity theft.
Typically, identity thieves use a victim’s personal and financial data to empty the victim’s financial accounts, run up charges on the victim’s existing credit cards, apply for new loans, credit cards, services or benefits in the victim’s name, file fraudulent tax returns or even commit crimes. Most of these fraudulent activities can be committed electronically from a remote location, including overseas. Committing these activities in cyberspace allows scammers to act quickly and cover their tracks before the victim becomes aware of the theft.
The most recent scams brought to IRS attention are the rebate phone call, in which a bogus IRS employee tells the consumer he is eligible for a sizable rebate for filing his taxes early; a link for a refund that is e-mailed to tax-exempt organizations bearing the supposed signature of the IRS Exempt Organizations business division; and an e-mail inviting recipients to click on a series of links to download information on changes in the tax law, but which downloads malware onto the recipient’s computer.
A new scam, not seen before by the IRS, notifies the recipient by e-mail that his or her tax return will be audited. The e-mail instructs the recipient to click on links to complete forms with personal and account information that the scammers will use to commit identity theft.
It’s reported that the larger public credit reporting agencies are collecting data on new credit inquiries, and selling that data to other credit vendors as “trigger leads” — so don’t be surprised if you apply for a refinance of your mortgage, or a new credit card, that you then almost instantly get a flood of sales materials from other companies.
You can, however, opt out of having this information sold. Go to the website OptOutPrescreen.com and within 5-7 days, you’ll start to stop getting so much clutter in your mailbox — AND you might lessen the risk of identity theft.
Gleaned (and enhanced) from taxes.about.com
January 15, 2008
4th quarter estimated tax payments due for 2007 tax year.
January 31, 2008
Deadline for employers to mail out Form W-2 and for payers to furnish Form 1099 statements to payees.
Deadline for self-employed individuals to file and to pay their tax and avoid a penalty for not making 4th quarter estimated tax payment.
February 15, 2008
Deadline for employees who claim exemption from withholding to file a new Form W-4 with their employers.
February 28, 2008
Deadline for employers to file Form W-2 and Form 1099 statements with the Social Security Administration if filing on paper or magnetic media.
March 2, 2008
Deadline to file FAFSA (Free Application for Federal Student Aid) for initial award consideration.
March 17, 2008
Deadline for corporate tax returns (Forms 1120, 1120A, and 1120S), or to request automatic 6-month extension of time to file (Form 7004).
Final deadline to file an amended corporate tax return (Form 1120X) for tax year 2004 and still claim a tax refund.
March 31, 2008
Deadline for employers to file Form W-2 and Form 1099 Statements with the Social Security Administration if filing electronically.
April 15, 2008
Deadline to file individual tax returns (Form 1040, 1040A, or 1040EZ) or to request an Automatic Extension (Form 4868).
Last day to make contribution to traditional IRA, Roth IRA, or SEP-IRA for the 2007 tax year.
1st quarter estimated tax payments due for 2008 tax year.
Final deadline to file an original tax return (Form 1040) for tax year 2004 and still claim a tax refund. (I provide an easy, step-by-step approach to filing back taxes.)
Final deadline to file amended tax return (Form 1040X) for tax year 2004 and still claim a tax refund. (Be sure to mail the amended return well before April 16th to make sure your tax refund will be processed in a timely manner.)
Deadline to file estate or trust tax returns (Form 1041) or to request an automatic 6-month extension of time to file (Form 7004).
Deadline to file partnership tax returns (Form 1065) or to request an automatic 6-month extension of time to file (Form 7004).
Final deadline for estates, trusts, or partnerships to file an amended tax return and still claim a tax refund for the year 2004.
May 15, 2008
Deadline for non-profit organizations to file information returns (Form 990), or request an extension (Form 8868).
June 16, 2008
2nd quarter estimated tax payments due for 2008 tax year.
Deadline for US citizens living abroad to file individual tax returns or to request an additional 4-month extension (Form 4868). (Tip: request an automatic extension by April 15th, 2008, instead.) I provide useful information for claiming the Foreign Earned Income Exclusion and the Foreign Tax Credit, two tax breaks essential for Americans working abroad.
June 30, 2008
Deadline to file TD F 90-22.1 Report of Foreign Bank Accounts if you have over $10,000 held in foreign bank accounts.
September 15, 2008
3rd quarter estimated tax payments due for 2008 tax year.
Final deadline to file corporate tax returns (Forms 1120, 1120A, 1120S).
October 15, 2008
Final deadline to file individual tax returns (with extension). Final day for e-file.
Final deadline to file trust tax returns (Form 1041) if an extension was requested.
Final deadline to file partnership tax returns (Form 1065) if an extension was requested.
Final deadline to fund a SEP-IRA for tax year 2007 if you requested an automatic extension of time to file.
November 2008
Start planning any year-end tax moves.
December 31, 2008
Last day to make any 2008 tax year moves, including marriage or divorce: Your marital status on this day determines your status for tax return purposes.
Are you a small businessperson? Do you run your business as a job, or are you planning on selling it, leaving it to an heir, or having it continue long after you’re gone? Then you’d better get planning.
It’s not just the big guys who have to plan for succession in their businesses. Many small businesspeople don’t think about who will take over until it’s too late to groom someone, or build a mechanism for paying off the heirs of the owner, and there are a myriad of other issues you need to think about.
We can help. Our succession planning expert is Sonia Stodden, CPA. Give her a call at 661-286-8860 and get started planning your “graceful exit” today!
