G-3414 S. Saginaw Street Burton, MI 48529 Phone: 810-743-1040 Fax: 810-743-5408
Tax Tips 2011
INDIVIDUALS:
All donations must list what you donated & put a value on each item. Staple this to your receipt. You can go to our website for help with this. 275,000 charities have had their status revoked. Make sure you bring in the receipt.
Make sure you have taken out enough money fro your IRA/RMD for the year.
If you still need to take money out and don’t need it, you can make a charitable contribution with it. They must make a check out directly to the charity not to you. It must be an actual 503c Charity. You can look this up on www.IRS.gov to make sure they are a legal charity.
When you donate items to Goodwill or Salvation Army you need to list the items you’re donating and give them a fair market value to each item. There is a link on our website for this. The IRS is Auditing these!
If you own a small business and use the Schedule C to report it and you fall into the EIC category, the IRS requires preparers to do due diligence. So we must verify Income. You must bring in your business bank statements, or Sales Invoices, or something to probe to us that you do have a valid business. This is a must! People are misusing this to claim a high earned income credit . This is one of the reasons they may soon discontinue the EIC.
The $400.00 Making Work Pay credit is no longer available. The IRS took it away.
The Michigan EIC is reduced this year and will be gone in 2012.
The Schedule D is now more complicated. They added more pages to it. The 1099 from your broker may look a little different this year.
The Cancellation of Debt may not be taxable to the IRS but is used as income for the Homestead Credit & the Heat Credit.
The Energy Credit is still available this year. You have a lifetime limit on each item for a total of $2000.00. Check with your tax preparer to make sure you haven’t used them up. Salesmen don’t know what you have already claimed, so they will tell you that you qualify even if you don’t.
You can amend State Tax returns up to 4 years back; the IRS is only 3 years.
Education Credits - you must have your 1098T for the credits and the student must remain in school for the whole class, no drop outs. The IRS is Auditing this.
BUSINESSES:
If you own a small business and use the Schedule C to report it, you must now bring in your bank statements, invoices, or receipts for proof that you have a legitimate business. Some people pretend to have a business to claim the Earned Income Tax Credit (which can be very high). They are talking about discontinuing this credit. We as tax preparers are required to SEE these documents to insure that no one misuses this credit.
If you need to send 1099’s to your contractors, please contact us quickly. The IRS is imposing stiff penalties for late filing of these forms.
There is a new way of the IRS tracking your income. It is a 1099k and reports all of your credit card sales to the IRS. They can now track that income with your total income to see if maybe you’re not reporting enough or if you need to be audited.
Selling your business? Contact us first to help with the tax planning issue.
Business mileage for 2011 - Jan to June is .51 & Jul to Dec is .555 per mile.
We can assist you in setting up your business no matter how you want to classify it, Corporation, LLC, Sole Proprietor or partnership.
We also do payroll , accounting, sales tax & notary.
