Fox, Byrd & Company, PC
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Transcript Fox, Byrd & Company, PC
Three Financial Things to do
Before Year End
Three Financial Things to do Before
Year End
“Opportunities multiply as they are seized.”
Sun Tzu
“Work begats work.”
Marcia Gay Harden
“The will to win is important, but the will to prepare is
vital.”
Joe Paterno
Consider Tax Planning
In 2010, the most tax law changes since 1986
Overriding Themes
Tax breaks are temporary
“User fees” and penalties - not tax increases
Information gathering
HIRE Act of 2010
Payroll tax holiday through 2010 for long unemployed
workers
Work Opportunity Credit for unemployed veterans,
disconnected youth and other target groups
Retained worker credit
Increased Sec 179 expensing for fixed assets to
$250,000 for 2010
Accelerated estimated tax payments for large ($1
billion assets) corporations
Increased reporting for foreign financial assets
Small Business Jobs Act of 2010
Self-employeds’ health insurance costs for self and
family are deductible for 2010 self-employment taxes
Cell phones are no longer “listed property”
Small Business Jobs Act of 2010
Retirement Planning Incentives and Revenue Raisers
Information return penalties increased
Failure to provide statement penalties increased
Sourcing Guarantee income
No pre-levy Collection Due Process IRS hearing
required for certain federal contractors
Accelerated 2015 estimated tax payments for large ($1
billion assets) corporations
2010 Tax Relief Act
Two year Sunset Relief
Reduced individual tax rates extended through 2012
Reduced estate and trust tax rates extended through
2012
Withholding and other tax rates remain unchanged
through 2012
Increased standard deduction amounts extended
through 2012
2010 Tax Relief Act
Two year Sunset Relief
No 3%/80% limitations on itemized deductions through
2012
No phase-out of personal exemptions through 2012
Reduced capital gains and qualified dividends rates
extended through 2012
Expanded child tax credit extended through 2012
Expanded earned income tax credit extended through
2012
2010 Tax Relief Act
Two year Sunset Relief
Expanded adoption credit and adoption assistance
extended through 2012
Expanded employer-provided childcare tax credit
extended through 2012
Expanded dependent care tax credit extended through
2012
Numerous education incentives extended through 2012
2010 Tax Relief Act
Two year Sunset Relief
Increased AMT exemption amounts through 2011
Personal nonrefundable credits may offset AMT and
regular tax for through 2011
Repeal of collapsible corporation rules extended
through 2012
2010 Tax Relief Act
Economic Stimuli
Bonus depreciation extended/increased through 2011
First year depreciation cap for passenger autos increased
by $8,000 through 2012
Choice to forego bonus depreciation and claim credits
instead extended through 2011
Increased Sec 179 expensing limit for fixed assets to
$125,000 for 2012 (decrease from $500,000 for 2010 and
2011
2010 Tax Relief Act
Economic Stimuli
Reduced employee FICA tax rate by 2% for 2011. Similar
reduction for self-employeds for 2011.
2010 Tax Relief Act
Tax Breaks for Individuals Reinstated
Above-the-line deduction for educator expenses
extended through 2011
State and local sales tax deduction extended through
2011
Liberalized qualified conservation contributions
extended through 2011
Above-the-line deduction for higher education expenses
extended through 2011
2010 Tax Relief Act
Energy and Disaster Relief Provisions Extended
Nonbusiness energy property credit extended through
2011
Energy efficient new home credit extended through 2011
Biodiesel tax credits extended through 2011
Biodiesel mixture excise credits extended through 2011
Biodiesel mixture excise tax refund provisions extended
through 2011
2010 Tax Relief Act
Energy and Disaster Relief Provisions Extended
Suspension of income limitations on percentage
depletion for marginal wells extended through 2011
Start-of-construction deadline to receive grants for
specified energy property in lieu of tax credits extended
through 2011
Alcohol fuels tax credit extended through 2011
Reduced credit for ethanol blenders extended through
2011
Consider Financial Reporting
Review debt covenants, coverage ratios, net capital
requirements, liquidity ratios.
Financial statements for banks/bonding may be
different than financial info for tax return.
Generally, the differences between book and tax are
timing differences.
Consider Protecting Positions
Worker classification
Documentation of relationships and responsibilities
20 factors for determining independent contractor vs.
employee
Issue 1099s
Consider Protecting Positions
Sales Tax
Avoid nexus in other states
Who is doing what and where
Internet sales
Opinion - Before we consider a national sales tax, we
might want to take a hard look at what happens on the
state level
Three Financial Things to do Before
Year End
Really Easy Questions?
OR:
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ALA -4.5
OSU -21
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