by NFS | Apr 8, 2011 | Archives
There is potential for a government shutdown after midnight on Friday due to a lack of budget approval. If this occurs, the IRS has stated that the April 18 tax deadline remains in effect. All taxpayers should continue to file their returns and pay their taxes as normal. The IRS plans to continue accepting all tax returns, both electronic and paper. Refunds will continue to be processed normally for electronically filed tax returns and most taxpayers will not see delays for e-filed returns. However, taxpayers should expect delays for paper tax refunds.
If you have any questions – please let me know.
by NFS | Apr 7, 2011 | Archives
Estimated tax is a method used to pay tax on income that is not subject to withholding. You may need to pay estimated taxes during the year depending on what you do for a living and what type of income you receive.
These six tips from the IRS will provide you with a quick look at estimated taxes and how to pay them.
- If you have income from sources such as self-employment, interest, dividends, alimony, rent, gains from the sales of assets, prizes or awards, then you may have to pay estimated tax.
- As a general rule, you must pay estimated taxes in 2011 if both of these statements apply: 1) You expect to owe at least $1,000 in tax after subtracting your tax withholding (if you have any) and credits, and 2) You expect your withholding and credits to be less than the smaller of 90% of your 2011 taxes or 100% of the tax on your 2010 return. There are special rules for farmers, fishermen, certain household employers and certain higher income taxpayers.
- For Sole Proprietors, Partners and S Corporation shareholders, you generally have to make estimated tax payments if you expect to owe $1,000 or more in tax when you file your return.
- To figure your estimated tax, include your expected gross income, taxable income, taxes, deductions and credits for the year. Use the worksheet in Form 1040ES, Estimated Tax for Individuals for this. You want to be as accurate as possible to avoid penalties. Also, consider changes in your situation and recent tax law changes.
- The year is divided into four payment periods, or due dates, for estimated tax purposes. Those dates generally are April 15, June 15, Sept. 15 and Jan. 15.
- Form 1040ES, Estimated Tax for Individuals, provides all you’ll need to pay estimated taxes. This includes instructions, worksheets, schedules and payment vouchers. The easiest way to pay estimated taxes, however, is electronically through the Electronic Federal Tax Payment System or EFTPS. You can also pay estimated taxes by check or money order using the Estimated Tax Payment Voucher or by credit or debit card.
by NFS | Apr 6, 2011 | Archives
Washington, D.C. – The Senate voted Tuesday to repeal the expanded 1099 information reporting requirements in last year’s health care reform and small business laws, sending the repeal to President Obama’s desk.
The repeal legislation, offered by Sen. Mike Johanns, R-Neb., was known as the Comprehensive 1099 Taxpayer Protection and Replacement of Exchange Subsidy Overpayments Act of 2011. Unlike the repeal vote earlier this year, the Senate and House bills contained similar language and offsets.
Senator Orrin Hatch, R-Utah, ranking member of the Senate Finance Committee, hailed Senate passage of the amendment, which passed by a vote to 87 to 12.
“The 1099 health care mandate is an albatross around the necks of American small businesses, forcing them to bear the brunt of the Obama Administration’s big-spending, tax-hiking, debt- increasing agenda,” said Hatch, who joined with Johanns last fall to launch the 1099 repeal effort. “I commend Senator Johanns for his ongoing leadership on this vital issue. Removing this costly regulatory burden from the backs of these entrepreneurs will allow them to do what they do best: create good-paying jobs.”
The 1099 provision required businesses, charities and state and local governments to file a 1099 form with the Internal Revenue Service to report annual purchases from other companies above $600.
House Ways and Means Committee Chairman Dave Camp, R-Mich., praised passage in the House of H.R. 4 1099 repeal legislation.
“The 1099 IRS reporting provision enacted in the Democrats’ 2010 health law quickly became the poster child for a government that is too big, too intrusive and too out of touch with small businesses,” said Camp. “After a nearly year-long battle, today’s vote is a major victory for America’s small businesses and the workers they employ. The Senate made the right choice in passing the bipartisan, common sense solution crafted by the House. The President should sign this into law immediately and work with us to find other ways to reduce the heavy burden of federal mandates, regulations and paperwork that takes employers’ time, energy and resources away from creating jobs.”
While both the Senate and House proposed competing versions of repeal legislation in the last Congress, the two chambers were never able to agree on a unified solution to provide small businesses with much-needed relief. H.R. 4, introduced by Rep. Dan Lungren, R-Calif., incorporated new language authored by Camp, R-Mich., repealing the onerous new Form 1099 information reporting requirements that were imposed on small businesses to pay for the health care law. The bill also would repeal an additional Form 1099 information reporting requirement on owners of rental real estate; and reduce improper overpayments of insurance exchange subsidies established under the health care law.
Upon final passage in the House, the Lungren-Camp 1099 repeal received 314 votes in the House—including 76 Democrats—last month and passed the Senate with a bipartisan vote of 87 to 12.
American Institute of CPAs president and CEO Barry Melancon praised passage of the bill.
“Today’s overwhelming vote by the Senate to repeal onerous information reporting requirements is a victory for taxpayers,” he said in a statement. “The AICPA had advocated strongly for the repeal of these reporting requirements because the increased burden on taxpayers and the time consuming process the IRS would have to use to reconcile millions of forms is too costly. We urge the President to quickly sign the repeal legislation into law.”
National Society of Accountants executive vice president John Ams described the 1099 reporting requirements as a “nightmarish regulation.” “Congress finally listened to the voice of actual experience rather than people in ivory towers,” Ams said. “For that, we are grateful. People on the ground making a living every day could see this would be a big problem and would not increase the revenue Congress was expecting. All it would do is cost businesses money and increase the burden on the IRS.”
By Michael Cohn, Accounting Today
by NFS | Apr 5, 2011 | Archives
Thank you to Pat Coleman @ The Wrentham Times for his write-up on NFS!
http://ping.fm/DnqYY
by NFS | Apr 4, 2011 | Archives
With budget talks at a stalemate and as it is looking more like the government might be shutting down on Friday, President Obama reaches out to Speaker of the House John Boehner and Majority Leader Harry Reid in a phone call. While the IRS plan is to take, but not to give during a shut-down.
Obama made two separate phone calls urging these US leaders to reach a resolution to avoid a government shut-down. The White House reports that Obama conveyed to both Boehner and Reid that a closure of the government would the “harmful to our economic recovery.”
This intervention marks a slight shift of the strategy from the White House in the fight over a plan to fund the government through 2011. Up until these phone calls, Vice President Joe Biden and Budget Director Jacob Lew were the lead men in working towards brokering a deal between the House Republicans and Senate Democrats, as Obama kept his distance.
With just a few days to go to get a budget into play, President Obama says he was encouraged by an agreement to reduce spending by roughly $73 billion from his proposed budget, with $33 billion reduced from currant spending levels. Republicans say that no such deal has been made.
Boehner’s spokesperson, Michael Steel said on Saturday, “The speaker reminded the president that there is no deal or agreement on a final number, and he will continue to push for the largest possible spending cuts.”
The budget deal needs to happen or another stopgap measure needs to be put in place within the next few days to stop the doors of many government offices closing.
What a closing down of the government might look like:
The plan is for the IRS to stop processing tax returns and stop refunds on April 8th, if Congress cannot agree to a plan or avert a halt of the government. The plan set forth in October called for the IRS to continue depositing the checks paid to them, but stop processing the refunds owed to the US citizens, according to Bloomberg’s interview with Commissioner of IRS. So the IRS will take, but not give in a shut-down mode. Again, this is the plan worked out in October when another government shut-down was looming.
Other closings would be the operations of national parks, the processing of many permits, work at Superfund sites, and work by many federal contractors.
If a government shut-down does occur, the government would continue to fund national security and jobs that protect the safety of life and property, as well as air traffic control, law enforcement, food and drug inspections, and the care of people in federal custody.
A day or two of a shutdown, especially if it happens over the weekend, will not present too much impact on the nation, but each day the shut-down continues, the impact grows. A government shut-down will cost more than $100 million a day, according to Bruce Yandle, a professor with George Mason University. “The longer it goes on the more unbearable it will get,” said Yandle. He also said that a government shut-down would be an eye opener for the nation’s citizens about how extensively the federal government is involved in all aspects of life. This sounds as if a government shut-down goes on for any length of time it will pose a hardship.
