The IRS has instituted new documentation requirements to deter fraud in the reporting of the first time homebuyers credit. Taxpayers claiming the credit must now paper file their tax returns due to these new documentation requirements. They will not be able to e-file their tax returns. Additionally, the IRS has announced that those taxpayers who will be getting refunds will have to wait an extra 2 -3 weeks for processing of the refund. (Refunds normally take 4-8 weeks.)

All taxpayers must include one of the following documents with their 2009 tax return in order to claim the first time homebuyer credit:

1. A copy of their settlement statement or Hud-1. Both parties names and addresses must be completed as well as the sales price and the date of purchase.

2. A copy of the executed retail sales contract for mobile home purchases. The contract must show both parties names and addresses as well as the purchase price and the date of the contract.

3. A copy of the certificate of occupancy for newly built homes, when a settlement statement is not available.

The IRS encourages using direct deposit of your refund in order to speed up the process a bit.

Microsoft Office Accounting Customers:

Transition your business with Intuit QuickBooks!

QuickBooks has been the leader in small business finance software for more than 25 years and welcomes Office Accounting customers to the Intuit family. Now is your opportunity to change how you manage your business finances and take advantage of several new features in QuickBooks to help grow your business and make key insights to protect the bottom line.

QuickBooks 2010 can transfer your data from Microsoft Office Accounting easily allowing you to leverage the new features and connected services of QuickBooks to meet your unique needs.

If you need assistance in transitioning to Quickbooks, contact me: Info@Lisakhayyatcpa.com.

On November 6th, Congress passed the “Worker, Homeownership, and Business Assistance Act of 2009.”

Some of the provisions of the law primarily affect individuals.

Information for Individuals:

* Making Work Pay Tax Credit. This tax credit means more take-home pay for many Americans. To make sure enough tax is withheld from their pay, taxpayers can use the IRS withholding calculator.

* First-Time Homebuyer Credit Expands. Homebuyers who purchase in 2009 can get a credit of up to $8,000 with no payback requirement. New legislation extends and expands this credit.

* Money Back for New Vehicle Purchases. Taxpayers who buy certain new vehicles in 2009 can deduct the state and local sales taxes they paid or other taxes and fees they paid in states with no sales tax.

* Education benefits. The new American opportunity credit and enhanced benefits for 529 college savings plans help families and students find ways to pay higher education expenses.

* Enhanced Credits for Tax Years 2009, 2010. Find details on the earned income tax credit and the additional child tax credit.

* Increased Transportation Subsidy. Employer-provided benefits for transit and parking are up in 2009.

* Up to $2,400 in Unemployment Benefits Tax Free in 2009. Individuals should check their tax withholding.

* $250 for Social Security Recipients, Veterans and Railroad Retirees. The Economic Recovery Payment will be paid by the Social Security Administration, Department of Veterans Affairs and the Railroad Retirement Board.

* Energy Efficiency and Renewable Energy Incentives.

* Health Coverage Tax Credit. The credit increases from 65 percent to 80 percent of qualified health insurance premiums, and more people are eligible.

Information for Businesses

Some of the provisions of the law primarily affect businesses.

* Making Work Pay Tax Credit. Businesses should use the new withholding rates for their employees. For pension plan administrators, new optional withholding procedures are available to supplement the February withholding tables.

* Work Opportunity tax credit. This newly-expanded credit adds returning veterans and “disconnected youth” to the list of new hires covered by the credit that businesses may claim. Businesses have until Oct. 17 to request certification for the tax credit for some new hires.

* COBRA: Health Insurance Continuation Subsidy. The IRS has extensive guidance for employers, including an updated Form 941, as well as information for qualifying individuals.

* Energy Efficiency and Renewable Energy Incentives.

* Net Operating Loss Carryback. Small businesses can offset losses by getting refunds on taxes paid up to five years ago. Information on the carryback, an expanded section 179 deduction and other business-related provisions, is now available.

* Municipal Bond Programs. There are new ways to finance school construction, energy and other public projects.
(IRS.gov)

Today - the majority of all business owners can be classified as Baby Boomers and are generally over the age of 50. In the next 10 - 15 years we will begin to see that these individuals are ready to begin exiting from their businesses. Those who have adequately prepared themselves, well in advance of this major life event, will come out as winners.

An exit strategy is a written plan for the succession of a business interest. A well thought out and properly crafted exit strategy utilizes the owners personal and business goals to develop the exit plan. All business owners can benefit from an exit plan strategy, prior to a business transition or retirement, regardless of their age or the stage in the life cycle of the company.

To ensure long term and short term goals are met, the exit plan is a powerful business and personal planning tool that should never be overlooked. A carefully thought out and crafted exit plan serves as a road map for business success and wealth preservation. An exit plan asks and answers all the important questions that business owners and their advisors must consider. In the ideal world, business owners would begin developing their exit plans when they start their businesses.

Did you know that your business is an Illiquid asset? And that most of your wealth is tied up in this business?

If you are within 5 - 10 years of retirement, how do you plan on exiting from your business while preserving your wealth & maintaining your lifestyle?

You must ask yourself these (3) Questions:

1. Is my business salable or what can I do to improve the saleability of my business?
If you were to put your business on the market today - would you get an asking price that you could live with? If not, what can you start to do now to improve saleability? Is the business turn-key? Are company policies and procedures documented to provide for a smooth transition for a new owner? These are just some of the questions that you must ask yourself.

2. What is my business worth?
You might have a figure in your head -but this figure is often based on emotional factors. One way to get a good third party opinion is to hire an expert experienced in business valuations.

3. How can I exit from my business and maintain my current lifestyle?
Your business provides for you and your family. It pays your bills, your living expenses, your medical needs and it funds your retirement. If you are contemplating an exit from your business - whether you plan to retire or just transition into another income producing venture - you have to know how much money you will need to maintain your lifestyle.

Article provided by: emochila - Websites for Professionals emochila

Why should your site have a File Exchange Portal?
As an increasing number of tax and accounting professionals begin to develop a web presence, they may be overlooking the inclusion of a simple and valuable web-based tool—secure file exchange. Sometimes referred to as an “online file cabinet,” a file exchange portal is of particular interest in our current time of economic difficulty as it’s an inexpensive technology investment that improves productivity, client service, and saves YOU time and money.

In its simplest terms, a file exchange portal is a quick and efficient method of securely transferring bookkeeping documents, tax returns, and other financial documents from one computer to another.

Often, accountants run into problems transferring client information for 2 main reasons. First, current bookkeeping software files like QuickBooks or Peachtree are notorious for becoming larger and larger with each fiscal year. As such, these files quickly become too large for you to send or receive them through traditional email providers like Yahoo, Hotmail, or AOL. However, file exchange portals are specifically designed to transfer very large file sizes with ease.

Second, in the event that these bookkeeping files are small enough to send via email, many clients are reluctant to do so because of the lack of security. File exchange portals require users to log on to an encrypted third-party server, ensuring a security level comparable to that of online banking (B of A, Chase, etc). Last year, Massachusetts and Nevada were the first states to pass legislation requiring the encryption of sensitive information transfers between accountants and their clients: a move that will, no doubt, be copied by other proactive states.

So, how does this translate into increased productivity and improved client services? For one, a file exchange portal is an important step towards a paperless office. Being able to access documents online saves money on mailing costs, but more importantly, it saves you time. Many tax professionals find themselves hounded for old tax returns, but with online storage, old returns can be quickly uploaded and stored on the portal to be retrieved at your clients’ convenience. Also, with a portal capable of large file exchange your clients are no longer inconvenienced by having to copy bookkeeping files to a CD or flash drive to get them to you. They can simply upload them for you to access when you want.

Some web-developers that work within the accounting industry provide a file exchange portal as part of their basic services, while others require them to be purchased as a separate service.

Taking into consideration their ease of use and potential to streamline your existing practice, a file transfer portal is undoubtedly a smart addition to your site.

Article provided by: emochila - Websites for Professionals emochila

It depends. SEO is used by companies that want to get prospects through their website and convert them into new clients. If you have a full practice and don’t want new clients, SEO is not necessary!

However, if you are looking to build your practice, SEO is a great resource that will only become more and more relevant in the future.

Definition: SEO is a way to optimize your website’s performance on search engine rankings like Google, Yahoo! and MSN. There is a lot of intensive programming that goes in to it, but SEO companies take care of that for you and its all “back-end,” meaning that the appearance and content of your website will be unaffected. They will build links that go to your website, submit your site to all the major search engines, submit your site to directories and use many other strategies to gradually bring up your ranking.

Google and the other search engines have algorithms that decide which sites should be ranked at the top for certain keywords. They send out robots (or “spiders”) to crawl all the sites on the World Wide Web to gather information. Your website is usually crawled once every few months. Thus an SEO campaign takes at least a few months to be effective and sometimes 6 months to a year to get your website up to the top of the rankings. Because of this, most SEO providers have a minimum of a 3-6 month contract.

The pricing usually starts around $200/month and goes up from there. Pricing depends on your competition and location. If you are in New York City, it will be much harder to get ranked high for a search like “CPA New York” compared to a local market with less competition like “CPA Tucson.” This is because SEO is becoming increasingly popular and in large metro areas like NYC, there are going to be many other competing firms who are also using SEO.

Your SEO provider will give you performance reports that will allow you to see who is coming to your website, where they went on the site, what search engines are crawling your site, and other useful info that allows you to track the success of the SEO campaign.

SEO is not to be confused with adwords or Pay-Per-Click. These are also effective ways to market online, but SEO is for improving your ranking in the organic or “natural” results, not within the sponsored links. Studies have shown that 70% of people click on the organic results, as opposed to the sponsored links. Thus SEO is used as a long-term solution for gaining clients.

Chad Brubaker, CEO, www.emochila.com

IRS: First $2,400 of Unemployment Benefits Tax Free for 2009

IR-2009-29, March 26, 2009

WASHINGTON — All or part of unemployment benefits received in 2009 will be tax free for many unemployed workers, according to the Internal Revenue Service.

“This morning we learned that a record 5.6 million people were receiving unemployment benefits in the middle of March. This underscores the need for the relief provided by the American Recovery and Reinvestment Act, which includes making the first $2,400 of unemployment insurance exempt from tax,” said IRS Commissioner Doug Shulman. “I urge all unemployed workers to take this special tax break into account as they plan their tax withholding and quarterly estimated tax payments for the year. This change offers a helping hand to millions of Americans who are out of work and struggling to make ends meet.”

Under the American Recovery and Reinvestment Act, enacted last month, every person who receives unemployment benefits during 2009 is eligible to exclude the first $2,400 of these benefits when they file their tax return next year. For a married couple, the exclusion applies to each spouse, separately. Thus, if both spouses receive unemployment benefits during 2009, each may exclude from income the first $2,400 of benefits they receive.

The new law doesn’t affect the return taxpayers are filling out now. Unemployment benefits received in 2008 and prior years remain fully taxable.

Unemployed workers can choose to have income tax withheld from their unemployment benefit payments. Withholding on these payments is voluntary. However, choosing this option may help avoid a surprise year-end tax bill or a possible penalty for having paid too little tax during the year. Those who choose this option will have a flat 10 percent tax withheld from their benefits.

Unemployed workers who expect to receive more than $2,400 in benefits this year should consider having tax withheld from their benefit payments in excess of that amount. Those unemployed workers who have already chosen to have tax taken out of their benefits, should consider the $2,400 exclusion in determining whether to continue to have tax withheld.

Use Form W-4V, Voluntary Withholding Request, or the equivalent form provided by the payer to request withholding to begin or end. Form W-4V is also available on IRS.gov or by calling the IRS toll-free at 1-800-TAX-FORM (829-3676)

Many business taxpayers fail to deduct otherwise eligible business expenses or fail to fully deduct qualifying business expenses. Below is a listing of commonly missed deductions or deductions that you may not be fully utilizing. You may wish to carefully examine your records to determine if you may be missing any of these deductions.

*For Sole Proprietors/Filing Schedule C: Home Office Deduction: If you use part of your home as a home office, you may be entitled to deduct expenses related to the home office based on the percentage of square footage the home office occupies. Related expenses include mortgage interest, property taxes, utilities, and repairs, etc. (S Corporation shareholders and Partners in a Partnership usually cannot take this deduction.)
*General Business Expenses: If you use your personal funds for business expenses such as office supplies, these are qualifying business expenses, which you may deduct. You can fill out an expense report and have the business reimburse you. Keep all receipts attached to the expense report for supporting documentation.
*For S Corporation Shareholders: Imputed Interest on Shareholder Loans: If you have loaned money to your business, you are required to charge interest on the loan or interest will be imputed to you. While you are required to report the interest as income on your personal return, your business is permitted a deduction for the interest paid. If any of the interest amount is improperly characterized as wage income to you, your business may be overstating its employment tax liability. By recharacterizing these amounts as interest expense, your business may be able to reduce its employment taxes. (You should also have an official Note set up with terms, etc….)
*Meals and Entertainment Expenses: If you have used your personal funds to pay for meals and entertainment expenses, these expenses qualify as a business deduction, subject to limitations. Once again, fill out an expense report and have the business reimburse you. Keep all receipts attached to the expense report for supporting documentation. Also document the business purposes of the meals and entertainment expenses.
*Personal Assets Converted to Business Use: If you have contributed personal assets, such as a computer, the fair market value of these assets qualify as a business deduction, subject to depreciation limitations, beginning with the date of conversion.
*Self-Employed Health Insurance: As a self-employed taxpayer, you may deduct your health insurance premiums under certain circumstances. (check with your tax professional for further information)
*<Communications Expenses: Expenses related to the business use of your personal telephones, cellular phones, and internet connections may be deducted.
*Automobile Expenses: Mileage and other related automobile expenses may be deducted when your personal vehicle is used for business purposes.

In the American Recovery and Reinvestment Act of 2009 - taxpayers received a tax credit - but it is not going to be in the form of a separate, special check mailed to them - like last years economic stimulus payment. This tax credit will be incorporated into their payroll checks. The credit will be in the $400 - $800 range per taxpayer.

For the majority of folks, this tax credit will mostly be handled through payroll tax withholdings. The IRS has revised the federal tax withholding tables to incorporate new lower tax rates. So - if you receive a regular weekly/biweekly/monthly paycheck - you will notice that your check contains a little something extra each pay period. For other folks, the credit can be claimed when they file their 2009 tax returns next year.

For more information about the “Making Work Pay” tax credit, see the newly revised IRS Publication 15 (Circular E) Employers Tax Guide.