The Seven Keys to Successful Corporate Tax Preparation

Many individuals look to April 15 every year with dread. For small and large corporations, it's not any different. No matter what type of taxes you're filing, there are many ways to make the process easier. Here are seven keys to success with corporate tax preparation.

Know Your Deductions

Businesses can deduct all "ordinary and necessary" business expenses. In order to take advantage of these write-offs, make sure to keep track of all your business expenses. These expenses can include business travel, equipment purchase, salaries, and rent. When considering travel expenses, remember mileage expenses as well.

Pay Quarterly Estimate Taxes

For new or small businesses, forgetting to pay quarterly estimated taxes can really trip you up. It can cause cash flow problems and sometimes result in fines or penalties from the IRS. Use your accountant or the information on the IRS website to help estimate your taxes, and make payments every quarter.

Remember Other Tax Deadlines

For individuals, April 15 is the big day. You may choose to file an extension if you feel you're going to be later than April 15. For businesses and corporations, there are other deadlines to keep in mind.

* Most annual returns are due April 15 for S corporations.
* For C corporations, annual corporate returns must be filed within 2.5 months after the close of their fiscal year.
* Estimated taxes are due quarterly every year on April 15, June 15, September 15 and January 15.
* Depending on the size of your payroll, employee taxes are due weekly, monthly or quarterly.

Keeping these deadlines on a calendar and allowing plenty of time to prepare will make preparing annual taxes much easier. Ask your accountant to recommend software or other ideas that will make preparation simpler.

Remember Charitable Contributions

Many businesses make charitable contributions in their own name, or in the name of their employees. To receive the maximum tax benefits, make sure you follow all rules set forth by the IRS closely. The organizations you contribute to must be listed by the IRS as deductible. Remember that any contribution of over $250 requires a letter of receipt from the receiving organization.

Ensure Employee Taxes are Correct

Many corporations will have employees other than the person running the business. With every paycheck, a variety of taxes must be withheld from employees. Each payday, look closely to ensure that amounts for Social Security (FICA), Medicare, and state and federal income taxes are correct. Make sure that the amount you match for FICA and Medicare taxes is correct. Also remember to keep up to date with federal and state unemployment taxes. By checking amounts and payments on a regular basis, you'll ensure that no problems arise come time to file quarterly and annual taxes.

Know Sales Tax Guidelines

If your corporation is selling a taxable product, it's important to stay up to date with sales taxes. Know the guidelines for each individual state in which you do business. If you do not have a physical presence in another state, but sell merchandise by internet or catalog, you may be subject to that state's "use tax."

Know the guidelines for each state whether you have a presence there or not. Making sure that registrations in each state are up to date and that state tax returns are filed online is important. By doing this, you'll avoid any penalties and make sure things run smoothly when filing annual taxes with the IRS.

Hire an Expert

As a business, the best way to make sure that taxes go smoothly is to hire an expert. Hiring someone who is trained in preparing corporate taxes will allow you to relax. You know that they have the knowledge to save you money, plan for next year, reduce liability and maximize your tax refund.

The key to successful income tax preparation for your business is planning ahead. Remember that even though "tax time" only comes once a year, businesses need to keep on top of deductions and recording throughout the year. Ask your accountant how to simplify your corporate tax preparation methods.


For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Business Expenses

Business expenses are the cost of carrying on a trade or business.

These expenses are usually deductible if the business is operated to

make a profit.

What Can I Deduct?
To be deductible, a business expense must be both ordinary and

necessary. An ordinary expense is one that is common and accepted in

your trade or business. A necessary expense is one that is helpful

and appropriate for your trade or business. An expense does not have

to be indispensable to be considered necessary.

It is important to separate business expenses from the following

expenses:

The expenses used to figure the cost of goods sold,Capital Expenses,

and Personal Expenses.

Cost of Goods Sold

If your business manufactures products or purchases them for resale,

you generally must value inventory at the beginning and end of each

tax year to determine your cost of goods sold. Some of your expenses

may be included in figuring the cost of goods sold. Cost of goods

sold is deducted from your gross receipts to figure your gross profit

for the year. If you include an expense in the cost of goods sold,

you cannot deduct it again as a business expense.

The following are types of expenses that go into figuring the cost of

goods sold.

The cost of products or raw materials, including freight Storage

Direct labor costs (including contributions to pensions or annuity

plans) for workers who produce the products Factory overhead.

Under the uniform capitalization rules, you must capitalize the

direct costs and part of the indirect costs for certain production or

resale activities. Indirect costs include rent, interest, taxes,

storage, purchasing, processing, repackaging, handling, and

administrative costs.

This rule does not apply to personal property you acquire for resale

if your average annual gross receipts (or those of your predecessor)

for the preceding 3 tax years are not more than $10 million.

For additional information, refer to the chapter on Cost of Goods

Sold, Publication 334, Tax Guide for Small Businesses and the chapter

on Inventories, Publication 538, Accounting Periods and Methods.


For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Prepared Remarks of IRS Commissioner Doug Shulman to the American Bar Association

IR-2010-98, Sept. 24, 2010

WASHINGTON — Following is a speech delivered by IRS Commissioner Doug Shulman today in Toronto, Canada. (See links to related materials at end of this document.)

It is my great honor and privilege to be in Toronto addressing the ABA.

It is a very busy time at the IRS. And while I could speak to you today about many important issues, ranging from:

Our international efforts, including the recent announcement of the realignment and renaming of our Large and Mid-Size Business Division to Large Business and International; To our return preparer initiative; To our efforts to implement recent legislation; I would like instead to focus today on transparency which is part of our larger strategy to get to and resolve taxpayer issues more quickly.

I have been clear since my first day on the job that I thought transparency and increased information flow were the key to the future of sound, fair and efficient tax administration.

READ FULL ARTICLE FROM IRS


----------

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Safeguarding Tax and Financial Records

The IRS published a newswire urging people to safeguard their records.

Actually whether or not you live in a hurricane area, there are many things that can happen to destroy important records. We all think about big natural disasters such as hurricanes, tornados, earthquakes, etc. But there are other disasters that can affect anyone no matter where you live. They include such things as fires, flooded basements, theft, accidentally throwing things away, etc.

If you happen to get audited, the IRS doesn't particularly care why you no longer have your records and they will go off the records they can gather. The IRS can provide you with W-2 information, income from interest, dividends, stock sales, 1099 information, interest paid on government student loans, and how much mortgage interest you paid to a financial institution. They don't have records of business deductions, donations, dependents, alimony paid, daycare expenses, medical expenses, etc.

There are several ways you can choose to keep your records safe.

1. Paperless Record keeping: With the wide use of computers, internet bank records, W-2 forms, and other documents can easily be downloaded to your computer. Other documents can be scanned in. This can then be saved onto a USB drive as a back up which can be store in a safety deposit box and/or sent to a relative in another city.

2. CD or DVD: Records can be scanned into the computer and burned onto a CD or DVD. Several copies can be made inexpensively and stored in several places.

3. Record Keeping Companies: There are companies that will copy and keep your records in their vaults so that in the case of a disaster they can provide you with a copy.

4. Protective Boxes and Safes: You can purchase fire proof and water proof boxes and small safes to keep valuable records in. They can work well if you don't live in a place were place where a natural disaster will likely take down the entire house.


For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Taxpayer Advocate Service From the IRS

Know Your Rights - Get Help - Check out the NEW Tax Toolkit!
English, Spanish, Video, and Hot Topics! This tool kit is easy-to-use and designed to help you! CLICK HERE!

National Taxpayer Advocate's FY 2011 Objectives Report to Congress!
National Taxpayer Advocate Nina E. Olson released a report to Congress that identifies the priority issues the Taxpayer Advocate Service (TAS) will address during the coming fiscal year. CLICK HERE!

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

IRS.GOV - Education & Work-Related Expenses

Question: What types of educational expenses are deductible?

Answer: Deductible educational expenses include:

Amounts spent for tuition, books, supplies, laboratory fees and similar items.
Transportation and travel expenses to attend qualified educational activities may also be deductible.

For more information, refer to Publication 970, Tax Benefits for Education; Chapter 12.

For work-related education expenses, refer to Tax Topic 513, Educational Expenses.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Tax Season 2010

News releases, fact sheets, YouTube and more.

Following are news releases, fact sheets, tax tips, YouTube video and podcasts that publicize tax filing season 2010.

Fact Sheets GO TO THIS URL:

Tax Law Changes Provide Saving Opportunities for Nearly Everyone
How to Choose a Tax Return Preparer and Avoid Preparer Fraud
Taxpayers Can Now Use Refunds to Buy Savings Bonds; New Direct Deposit Option
Tax Credits for Home Buyers
Most Workers Need to File New Schedule M; Making Work Pay Credit Offers Tax Savings Up to $800
E-file, Free File and Other Electronic Options for 2010
Online Scams that Impersonate the IRS
Free Tax Help Available from the IRS
Reporting Bank and Financial Accounts
Tax Tips
Listing of 2010 Tax Tips

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Nevada New Taxation Call Center

The Nevada Department of Taxation has established a new call center to address questions regarding sales tax, use tax, modified business tax, general tax questions or information regarding establishing a new account. The call center can be reached at 866-962-3707. The call center hours are from 8:10 am to 11:50 am and 1:00 pm to 4:45 pm Pacific Time. The call center is closed for lunch between 11:50 and 1:00 pm Pacific Time.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Some Surprised at Breath of Foreign Reporting Requirements, and Shock of Automatic $10,000 Penalty

When President Obama was elected into office, he vowed to focus IRS efforts on taxpayers who had foreign assets. The latest tax act (Hiring Incentives to Restore Employment Act) made significant changes in reporting requirements for U.S. persons who hold foreign assets. Most significant is the automatic $10,000 penalty for failure to report ownership in “specified foreign financial assets” with an additional penalty if the failure continues for more than 90 days after a notification by the IRS. In addition, the three year statute of limitations for assessments of tax is extended to six years if there is an omission of gross income in excess of $5,000 attributable to a foreign financial asset, which may or may not be subject to information reporting.

Unfortunately, many taxpayers that are technically owners of “specified financial assets” are unaware of the reporting requirements.

The reporting requirements are effective for tax years beginning after March 18, 2010 and are required if you have an aggregate ownership of $50,000 or more in “specified foreign financial assets”, which include the following:

1) foreign financial accounts;
2) U.S. persons owning controlling interests in certain foreign corporations and partnerships;
3) reporting by U.S. persons of certain transfers of property to foreign entities and persons;
4) reporting by U.S. persons of organizations, reorganizations, and acquisitions of stock of foreign corporations;
5) reporting by U.S. persons of changes in foreign partnership interests; and
6) reporting with respect to foreign trusts with a U.S. grantor and foreign trusts distributing money or property to a U.S. person.
If the IRS determines that an individual has an interest in one or more foreign financial assets, but the individual does not provide sufficient information to establish the aggregate value of the assets, then the IRS may presume that the aggregate value of the assets have exceeded $50,000!



For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

IRS Releases Form to Help Small Businesses Claim New Health Care Tax Credit - Sept 7, 2010

WASHINGTON –– The Internal Revenue Service today released a draft version of the form that small businesses and tax-exempt organizations will use to calculate the small business health care tax credit when they file income tax returns next year. The IRS also announced how eligible tax-exempt organizations –– which do not generally file income tax returns –– will claim the credit during the 2011 filing season.

The IRS has posted a draft of Form 8941 to this website. Both small businesses and tax-exempt organizations will use the form to calculate the credit. A small business will then include the amount of the credit as part of the general business credit on its income tax return.

Tax-exempt organizations will instead claim the small business health care tax credit on a revised Form 990-T. The Form 990-T is currently used by tax-exempt organizations to report and pay the tax on unrelated business income. Form 990-T will be revised for the 2011 filing season to enable eligible tax-exempt organizations –– even those that owe no tax on unrelated business income –– also to claim the small business health care tax credit.

The final version of Form 8941 and its instructions will be available later this year.
The small business health care tax credit was included in the Affordable Care Act signed by the President in March and is effective this year. The credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.

In 2010, the credit is generally available to small employers that contribute an amount equivalent to at least half the cost of single coverage towards buying health insurance for their employees. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ moderate- and lower-income workers.

For tax years 2010 to 2013, the maximum credit is 35 percent of premiums paid by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. Beginning in 2014, the maximum tax credit will go up to 50 percent of premiums paid by eligible small business employers and 35 percent of premiums paid by eligible, tax-exempt organizations for two years.

The maximum credit goes to smaller employers –– those with 10 or fewer full-time equivalent (FTE) employees –– paying annual average wages of $25,000 or less.
The credit is completely phased out for employers that have 25 FTEs or more or that pay average wages of $50,000 per year or more. Because the eligibility rules are based in part on the number of FTEs, and not simply the number of employees, businesses that use part-time help may qualify even if they employ more than 25 individuals.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Freelance Bookkeeping: Helpful Hints on Billing

Bookkeeping Tips from the American Institute of Professional Bookkeepers:
Freelance Bookkeeping: Helpful Hints on Billing

READ THE PDF HERE

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Elite Bookkeeping and Tax Services Video

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Small Businesses Skip the Health-Care Tax Credit

Insurance brokers say response is low because the value of the benefit declines quickly for companies that pay average annual wages of more than $25,000 or employ more than 25 workers.

By David Lerman and Liz Smith

Sales are off by 20 percent this year at Image Computer, which repairs printers in suburban Detroit. So President Steve Olis is worried about whether he can continue paying the $71,000 a year it costs him to provide health insurance for his employees.

The Obama Administration's answer for Olis and other small-business owners: a tax credit of as much as 35 percent of the insurance premiums they pay for employee medical coverage, a signature part of the health-care reform bill signed into law in March. Image Computer, however, doesn't qualify for the credit because Olis pays his 15 employees an average of $55,600 annually, and companies with average salaries above $50,000 aren't eligible. "At some point I can't do this any longer," Olis says of his rising health-care premiums.

Eager to promote the new small-business tax credit, the government this spring mailed 4 million eligible companies postcards with highlights of the program. The response has been tepid, according to insurance brokers who sell small-group policies. The reason, they argue, is that the credit starts to phase out for companies that pay average annual wages of more than $25,000 or employ more than 25 workers. The value of the benefit declines quickly, so many business owners in high-cost states get no tax break, and those elsewhere often say the credit is too small to make much of a difference. Sales of health plans have gotten "very little traction so far," says James Stenger, director of business development for BenefitMall, which sells small-group plans in New Jersey.

Stenger says most of his clients pay their workers more than $25,000 a year, so the average tax credit he's seeing for the few who qualify is about 10 percent of the cost of the policy. That's less than $200 per worker—not enough to spur many business owners to start providing coverage. Brokers across the country report a similar response. JLBG Health in Warrenville, Ill., contacted 460 small businesses about the tax credit. Roughly 40 percent were eligible, though only seven of those companies qualified for the full benefit. Not one of the 400 New England employers served by Hampstead (N.H.)-based Landmark Benefits is eligible, the broker says. The legislation "is just not doing what we had hoped," says Steven Selinsky, the incoming president of the National Association of Health Underwriters.

U.S. Small Business Administration chief Karen Mills says complaints about the tax credit are premature. "This is all still in anecdote land," Mills said in an interview. She maintains that the income cap was needed to keep a lid on the cost of the tax credit and that the people with the greatest need—low-paid workers at the smallest companies—will be able to get coverage. Companies "want to provide health insurance [because] they're losing good employees when they don't," Mills says. "The math says [the program] is likely to be positive."

One company that has had success selling policies under the program is Blue Cross and Blue Shield of Kansas City, which launched a marketing push to promote the tax credit when the law was enacted. Although less than a quarter of small businesses in the Kansas City area qualify for the credit, the ad campaign paid off. Blue Cross has sold 227 plans to small businesses in the past three months—80 percent more than in a typical three-month period, says Tom Bowser, chief executive officer. Now, Blue Cross affiliates in other states are hoping to replicate the Kansas City marketing strategy—a combination of print ads, radio spots, and direct mail explaining the program's advantages. The success "is tangible evidence that this legislation is having some effect," Bowser says, "and we're cashing in on it."

The bottom line: Many small businesses can't take advantage of a tax credit designed to reduce the cost of providing health insurance.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Tips on how to handle the IRS - Brought to you by The American Institute of Professional Bookkeepers (www.aipb.org)

Has your company or client ever heard from the IRS? Sooner or later they probably will. If you are like our 30,000 members, you may be the one expected to deal with the IRS.

Send any correspondence to the IRS via certified mail, return receipt requested.

Always maintain a good audit trail—all correspondence relating to the notice, such as
copies of canceled checks, receipts, tax returns, and letters.

If the IRS does not respond within 6 weeks (8 weeks at most), send the IRS a copy of the correspondence, write “Second Response” on the top, and include the date of your first response. Tip: Include clearly marked copies of all prior correspondence with the IRS.

If you do not resolve the problem in three attempts, use the IRS Tax Payer Advocate's
office.

If you realize that you owe money and it was an honest mistake, ask for an abatement of penalties. Intent and past “good faith efforts” to make timely deposits may well result in penalties being abated.

Read entire article here!

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Why Should You Incorporate?

Because of the length of time corporations have been in existence, there is a long record of statutory and case law which supports the use of a corporation for asset protection.

Consequently, corporations are traditionally considered for use as the “First Line of Defense” to accomplish the goal of limited liability. Following are some important attributes and advantages to a corporation which allow it to be used for limited liability as well as other purposes.

•The corporation is a totally separate entity from any individual- it is not you, and you are not it. This is important to remember in maintaining the limited liability protection. It must be treated as a separate individual
•A corporation can buy, sell, trade, own property, own stock, make loans, etc. and anything else that an individual can do; such actions are governed by the Board of Directors
•The shareholders of the corporation do not have to live in the state in which the corporation is domiciled. Fortunately, here in Nevada, neither do the Officers or Directors
•Corporations have perpetual existence- if a Director or Officer becomes deceased, the corporation will still exist, unlike with some other entities
•There are many tax deductions available to corporations, which are not available to other entities
•It is easy to transfer assets and ownership of a corporation
•Centralized management allows ease of doing business
•Full fringe benefits can be established through a corporation
•A corporation has all of the rights of an individual except for the Fifth Amendment
Please be advised that we are not engaged in rendering legal counsel or accounting services. If legal advise, or other such services and assistance is required, the services of a professional person in that area should be sought. At your request, however, we may consult with you and render our opinion based on our business experience.

American Corporate Enterprises works with and provides services to Attorneys, CPAs, Financial Consultants, etc. in order to meet the needs of our clients. We would be happy to refer you to such a professional at your request.


For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

The Difference of Getting Paid With a 1099 Versus a W-2

Whenever a business starts there is always the question of how the people that provide services for the business will be paid. Will those services be performed by employees or will independent contractors be used?

Before the business can determine how to treat payments they need to know and make clear the business relationship. It is important to establish this relationship because an employee has taxes withheld, social security and medicare matched by the employer, unemployment insurance paid, workers compensation insurance paid and often benefits provided. An independent contractor just gets paid. It is a big expense difference.

To determine whether an individual is an employee or and independent contractor, the relationship of the business and worker must be examined. It comes down to does the business have control over what and how a job will be done or do they just control the results of the job. The determination falls into three categories: behavior control, financial control, and type of relationship.

Behavioral Control

Employees are generally subject to instructions about when, where, and how to work. The employer controls when and where the work is performed and what hours the person will be at the job. The person is told what tools and equipment to use, who else can be hired to assist with the work and where to purchase supplies and services. They are told what work is to be performed by a specific individual and what order or sequence to follow. Employees also may be required to receive training by the employer.

Independent Contractors can be hired to do a certain job in a certain place and be completed by a certain time. However, how the job is done is up to the contractor. When the work is performed, what equipment is used, who is hired to assist and where materials and supplies are purchased are up to the Independent Contractor. They also obtain and pay for their own training.

Financial Control

An employee is generally guaranteed a regular wage amount for an hourly, weekly or other period of time, even if the wage or salary is connected with a commission. They may be paid whether work is being performed or not. An employee generally does not have an investment in the company unless there are stock options available. They usually have any expenses they incur for things such as travel, phone, or equipment reimbursed.

An Independent Contractor is not reimbursed for any expenses. They generally have a business of their own or a significant investment in the facilities and equipment used to perform the work. An Independent Contractor is free to offer services to the general public and can take on jobs for other companies or individuals. They generally advertise their services and maintain a home office or visible business location. They generally get hired and paid by the job, usually a flat fee. Although some jobs can be billed hourly. An Independent Contractor can make a profit or loss on the job.

Type of Relationship

An Employee generally signs a employee contract. The employee is generally provided benefits such as insurance, pension plan, vacation and sick pay. Employee's are engaged for an indefinite period of time. They perform activities that are a regular daily part of the business. They fill out an IRS W-4 form that tells the employer how much taxes to withhold. They are not free to do business for other companies and in fact some companies have penalties if they do.

Independent Contractors have job by job contracts or for specific project or periods of time that state they are responsible for their own taxes. They are not provided with any benefits. They fill out an IRS W-9 form telling the IRS that no taxes are required to be withheld.

It is important to determine what kind of relationship from the beginning of your business. If you treat an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that person. Also, if you pay an individual as an Independent Contractor, they do not qualify for unemployment of workers compensation so if they try to collect it, you will want to be ready to verify they are not an employee.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

SBA Fees, Covered

SBA Fees, Covered

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Freelance bookkeeping: Helpful hints on billing

Here's a bookkeeping tip from the American Institute of Professional Bookkeepers.

Opens in PDF format - CLICK HERE


For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Where is that transaction recorded?

Here's a bookkeeping tip from the American Institute of Professional Bookkeepers.

Opens in PDF format - CLICK HERE

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

How to Eliminate the Frustration small business owners face from a Financial Standpoint as well as an Entity-Formation Standpoint.

If you are the owner of a small business, you always have heaps of work regarding your company's finances. The fact is, there is still a need to go a professional bookkeeping service, like Elite Bookkeeping & Tax Services to take the stress off your shoulders.

Visiting with your certified bookkeeper is similar to going to your dentist. Time is money; the longer you delay your visit the more it will cost you.

First you need to know how to set up your business and to consider advantages and disadvantages of every business entity (LLC, Partnership or C Corporation, etc). Elite Bookkeeping & Tax Services' affiliate companies can help with this! Contact American Corporate Enterprises, Inc., or AAA Corporate Services, Inc., and they will be glad to set up your entity for you or answer any questions you may have.

You can spend many hours away from your business learning about entities on your own or you can hire a specialist who saves you time and gives you qualified advice on how to protect your hard-earned money.

You are the ultimate specialist in your business. To be competitive in your field, you need to invest a lot of time. At the start, most of the entrepreneurs work an average of 12 hours a day.

In addition to your business tasks, can you learn everything about accounting and then handle it? Most likely the answer is no.

Your business' finances are vital for your success, and your needs are unique. At Elite Bookkeeping & Tax Services, we take your individuality seriously, focusing on your business' special situation and needs.

To make the right financial decisions for your company, you need Financial Statements; Balance Sheets, Income Statements and Statement of Cash Flow for every month of the business activity.

All of them are concerning to the company financial reports. What do you know from these financial reports are briefly described below.

From the Balance Sheet reports, you know what your company owns and what it owes. Other words, you know your company resources and obligations of your company.

From the Income Statement reports you know the economic performance of a company for the given period. Other words, you know your gross and net income.

From the Statement of Cash Flows reports you know the amount of cash generated and consumed by a company through the following three types of activities: operating, investing and financing.

The statement of Cash Flows is an important objective of the financial statements because it is somewhat insulated from the accounting estimates and judgments needed to prepare a balance sheet and an income statement.

Real world and real understanding of your company finances goes beyond numbers on a page to show to a small business owner how accounting and bookkeeping come into play in your company.

Without a good bookkeeping service, you can not plan ahead (business planning), get organized, stay informed on the financial matters of your company, avoid costly mistakes; reduce costs and save time.

Why do small business firms fail? Not always because of competition but because of lack of financial information. You are making money, but where does it all go? What is the main outsourcing of your finances? The right answer gives you a huge benefit for your company.

Other benefits you are getting if you go to a professional accountant or bookkeeper is the ability to focus on your core business, getting organized, staying informed, avoiding costly mistakes, reducing costs and saving time while improving your cash flow.

One more great benefit is the good timing -- all these benefits work only if performed in the right time. Timing is the key to your business's success. With the help of a qualified bookkeeping service like Elite Bookkeeping & Tax Services, you will have it under control and can focus on all the other duties that make your business successful and profitable. Good record keeping provides you the solid foundation needed for excellent business growth.

Your company's reliable financial information eliminates the frustration from your small business company and your financial reports become the powerful tools for surviving in today's business world.

--------------------------------


For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Taxation Publications: Dept of Taxation: Nevada Links

Welcome to the Department’s Publications Page. Here you will find our studies, reports and manuals, and quarterly newsletter, Nevada Tax Notes. This page holds only recent publications.
CLICK HERE TO VIEW!

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Obama Urges Increase To Clean Energy Tax Credits, by Mike Godfrey, Tax-News.com

United States President Barack Obama has made an appeal to Congress to pass the increase to the clean energy manufacturing tax credits that now form part of the draft text of the Domestic Manufacturing and Energy Jobs Act of 2010.

The draft Act includes up to USD6.5bn in investment tax credits for taxpayers that re-equip, expand or establish domestic manufacturing facilities that produce advanced energy equipment.

As the government provides 30% of the investment for eligible clean energy projects, with the private investor providing 70%, these tax credits are expected to encourage more than USD22bn of total investment in domestic manufacturing facilities. It will add to the USD2.3bn of such tax credits that were originally provided by the American Recovery and Reinvestment Act.

House Ways and Means Committee Chairman, Sander Levin, said: “As the world moves toward renewable energy and a greener economy, it is necessary to accelerate a new era of American manufacturing and innovation. With the US government as a full, active and effective partner, the private sector can expand our green manufacturing capacity, ensuring that these jobs and products will be created in the US, competing globally and protecting our environment.”

Pointing to the success of the original issue of investment credits, President Obama said: “The only problem we have is, these credits worked so well, there weren’t enough to go around. More than 180 clean energy projects in over 40 states received USD2.3bn in tax credits, but the program was such a success that we received 500 qualified applications for USD8bn in tax credits.”

“I believe that if an American company wants to innovate, grow, and create jobs right here in the US, we should give them the support they need to do it. That’s why I’m urging Congress, once again, to invest USD5bn in these clean energy manufacturing tax credits. It’s an investment that will generate (an additional) USD12bn or more in private sector investment and tens of thousands of new jobs.”

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Audit Triggers: The Biggest Red Flags to Watch Out For

All in the family. When employing a spouse, child or close relative, be careful not to give them any extra-special treatment. Make sure the responsibilities of their job description are commensurate with their age and experience. Pay them the same salary you'd pay anyone else doing the same job.

In the money. An excessively high income compared to previous years can stand out and trigger an audit. And high-income taxpayers are more likely to be audited since they're more likely to be involved in complex transactions and have partnerships, trusts or businesses.

Consistency is key. The IRS will notice if your federal return is disproportionate to your state return, so be careful to ensure they're consistent.

Stay on the up and up. People who've filed frivolous lawsuits in the past are most likely always going to be audited. Considering not filing your taxes at all? Here's something that may cause you to re-think your decision: People who haven't filed their federal taxes can be picked up for fraud, hit with a felony and do jail time. Even if you don't have the funds to pay off everything you owe, Brown strongly suggests filing anyway--it's better to file and not pay all you owe than wait until you have all the funds and risk getting hit with penalties or worse.

Know your preparer. More and more, the IRS is using a software program to check up on tax-return preparers. If they notice a high error rate, they'll not only audit the return-preparer, but they'll also audit that person's clients as well. So do your homework before choosing a preparer. And if you ever have any doubt as to whether they're guiding you in the right direction, seek an outside opinion before proceeding.

Protect yourself. If you are selected for an audit, Brown recommends standing up to the IRS by getting representation. As a former IRS insider, Brown says that these days, the IRS is "a bit out of control--they aren't enforcing the tax law with professionalism."

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Charging Order Protection - By: Kerry Kolvet, Esq.

The protection of assets is generally one of the biggest reasons to form a legal entity. Specifically, the protection of business assets from an owner’s personal liabilities is critical to a business’ continuing success. In many states, a personal creditor may charge a stockholder’s stock with payment of a judgment. Such a remedy could result in the forced liquidation of a viable business to satisfy an owner’s personal debt to the detriment of other owners.

In Nevada, charging order protection is extended to partnerships, limited liability companies and, more recently, corporations. What this means is that a personal creditor’s only remedy against an owner’s stock is a charging order and, as a result, that creditor must wait for distributions from that entity to satisfy any judgment. The creditor cannot force distributions from the entity, nor can the creditor exercise any control over the entity, thereby allowing the business to continue operations despite the creditor’s claim.

READ ENTIRE ARTICLE (by Nevada Small Business Development Center)

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

How LLCs Are Taxed

LLC owners report business income and losses on their personal tax returns.

A limited liability company (LLC) is not a separate tax entity like a corporation; instead, it is what the IRS calls a "pass-through entity," like a partnership or sole proprietorship. All of the profits and losses of the LLC "pass through" the business to the LLC owners (called members), who report this information on their personal tax returns. The LLC itself does not pay federal income taxes, but some states impose an annual tax on LLCs.

Income Taxes

The IRS treats your LLC like a sole proprietorship or a partnership, depending on the number of members in your LLC.

Single-Owner LLCs

The IRS treats one-member LLCs as sole proprietorships for tax purposes. This means that the LLC itself does not pay taxes and does not have to file a return with the IRS.

As the sole owner of your LLC, you must report all profits (or losses) of the LLC on Schedule C and submit it with your 1040 tax return. Even if you leave profits in the company's bank account at the end of the year -- for instance, to cover future expenses or expand the business -- you must pay income tax on that money.

Multi-Owner LLCs

The IRS treats co-owned LLCs as partnerships for tax purposes. Like one-member LLCs, co-owned LLCs do not pay taxes on business income; instead, the LLC owners each pay taxes on their share of the profits on their personal income tax returns (with Schedule E attached). Each LLC member's share of profits and losses, called a distributive share, should be set out in the LLC operating agreement.

Dividing up the profits between members. Most operating agreements provide that a member's distributive share is in proportion to his or her percentage interest in the business. For instance, if Jimmy owns 60% of the LLC, and Luana owns the other 40%, Jimmy will be entitled to 60% of the LLC's profits and losses, and Luana will be entitled to 40%. If you'd like to split up profits and losses in a way that is not proportionate to the members' percentage interests in the business, it's called a "special allocation."

Taxes assessed on entire distributive share. However members' distributive shares are divvied up, the IRS treats each LLC member as though the member receives his or her entire distributive share each year. This means that each LLC member must pay taxes on his or her whole distributive share, whether or not the LLC actually distributes all (or any of) the money to the members. The practical significance of this IRS rule is that, even if LLC members need to leave profits in the LLC -- for instance, to buy inventory or expand the business -- each LLC member is liable for income tax on his or her rightful share of that money.

File Form 1065 with the IRS. Even though a co-owned LLC does not pay its own income taxes, it must file Form 1065 with the IRS. This form, the same one that a partnership files, is an informational return that the IRS reviews to make sure that LLC members are reporting their income correctly. The LLC must also provide each LLC member with a Schedule K-1, which breaks down each member's share of the LLC's profits and losses. In turn, each LLC member reports this profit and loss information on his or her individual Form 1040, with Schedule E attached.

Consider Electing Corporate Taxation

If you will regularly need to keep a substantial amount of profits in your LLC (called "retained earnings"), you might benefit from electing corporate taxation. Any LLC can choose to be treated like a corporation for tax purposes by filing IRS Form 8832, Entity Classification Election, and checking the corporate tax treatment box on the form.

Because the corporate income tax rates for the first $75,000 of corporate taxable income are lower than the individual income tax rates that apply to most LLC owners, this can save you and your co-owners money in overall taxes.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

US Business Fears International Tax Bill

US business groups have criticized the Senate's approval of a bill which proposes to tighten international tax rules with the intention of curbing what Democrats consider as large scale corporate tax avoidance.

An amendment to a bill which aims to provide cash-strapped state governments with billions of dollars in additional aid to cover teachers' salaries and Medicaid bills, among other costs, would make several changes to the US foreign tax credit rules to prevent multinationals from over-claiming for tax refunds in the US in relation to income earned and already taxed abroad.

According to the Business Roundtable, the amendment, submitted by Washington state Democrat Patty Murray, would raise nearly USD10bn in new taxes on US companies with overseas business operations.

"Keeping American companies and workers competitive should be the number one goal of US tax policy," commented Johanna Schneider, Executive Director, External Relations of Business Roundtable. "However, [the] Senate vote only adds to the growing disparity between the tax policies of the United States and most other major world economies."

Schneider observed that companies in the US are already subject to the second-highest corporate income tax rate among developed countries. "Further raising these taxes will make America’s largest employers less competitive, which will undermine US economic growth and job creation," she said.

The Business Roundtable, the US Chamber of Commerce and the National Association of Manufacturers have been joined by several other US business associations in signing a letter to Congressmen which warns that the amendment would have the effect of "reducing the earnings US companies bring back from their foreign operations."

In something of an unusual step, the House of Representatives may return from its summer recess to vote on the state funding bill this week.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

What is a "Non Profit" Organization?

A Non Profit organization (NPO) is a business entity where making a profit is not a primary mission. Typically, Non Profits are engaged in charitable, educational, religious, or artistic activities of public or private interest. Since Non Profit organizations cannot distribute profit to their directors, officers, or members (those who participate in the management of the Non Profit) any income generated by the Non Profit must ultimately go back into the organization. However, Non Profits can hire and pay staff to carry out operational and administrative functions.

If you choose to incorporate your Non Profit as a 501(c) corporation, you can choose from 26 types – 501(c)(1) to 501(c)(26). Section 501(c)(3) is the most common federal tax exemption for Non Profits, which exempts the Non Profit from taxes on income directly related to the organization’s mission. Therefore, many Non Profits are often referred to as 501(c)(3) corporations. Refer to IRS.gov to learn more about other types of 501(c) incorporation.

Forming a Non Profit 501(c)(3) Corporation

Incorporation for Non Profits is very similar to creating a regular corporation, but with the extra steps of applying for tax-exempt status with the IRS and your state tax department. Becoming a Non Profit corporation requires some paperwork, but for many groups the benefits of Non Profit status outweigh the complications.

Here are the steps you must take to incorporate your Non Profit:

Choose a Business Name. Your business name (1) must be different from an existing corporation registered in your state’s office and (2) must indicate that it is a corporation by ending with the words: “corporation,” “incorporated,” “limited,” or a variation of those designations.

File your Incorporation Paperwork. You must next file formal paperwork, or articles of incorporation, and pay a small filing fee to your state. These "articles" contain basic structural information, such as the Non Profit name, its registered agent and office address, and membership structure, if any. You can find information about filing articles of incorporation by state on Business.gov’s Business Incorporation page. You can also look up your state office through the National Association of State Charity Officials* (NASCO).

Create Corporate Bylaws. Corporate bylaws outline the rules of operation for your Non Profit corporation, which includes procedures like holding meetings and electing directors. Tax regulations and other state laws are often covered in the bylaws to ensure that the Non Profit is running legally.

Appoint Directors and Hold a Board Meeting. Depending on your state, your Non Profit must appoint at least 1 or sometimes even 3 directors to make major decisions in the corporation. Some states require that you appoint directors before filing your articles of incorporation. Afterward the appointment, directors formally adopt the bylaws and elect officers at the board meeting.

Obtain Licenses and Permits. You must obtain relevant business licenses and permits like any other business. Regulations vary by industry, state and locality. Use the Licensing & Permits tool on Business.gov to find a listing of federal, state and local permits, licenses, and registrations you'll need to run a business.

Start Fundraising. Now that your NPO is officially established you'll need to pay attention to its bread and butter - fundraising. State offices of the National Association of State Charity Officials* (NASCO) provide local fundraising regulations. While individual donors amount to the largest contributors to Non Profits, federal, state and local governments offer grants, loans and programs to fund NPO projects. Learn more about funding opportunities for your Non Profit on USA.gov.

Hiring Employees. If you are hiring employees, read more about federal and state regulations for employers.

Taxes. Most businesses will need to register with the IRS and state and local revenue agencies, and obtain a tax ID number or permit. WE CAN HELP!

Non Profit organizations are not automatically exempt from federal and state taxes. Therefore, Non Profit organizations seeking tax-exemption must formally apply for federal recognition and in many cases state recognition. Before you apply, make sure that your Non Profit organization satisfies the following requirements from the IRS.

Eligible Non Profits can file for federal and state tax exemptions once their articles of incorporation are registered with the state. The instructions below outline the application process for Section 501(c)(3) status, the most common federal and state tax exemption for Non Profits:

Apply for Non Profit Federal Tax Exemptions. Submit an application to the IRS for your federal Non Profit status as a 501(c)(3) organization. You must file a Form 8718, User Fee for Exempt Organization Determination Letter Request and Form 1023, Application for Recognition of Exemption with the IRS. It's best to file within 27 months after the date of your incorporation. Learn more about the application process and other requirements and responsibilities of 501(c)(3) Tax-Exempt Organizations from the IRS.

This information is meant to aide you in your business and tax needs. Contact us today! For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Small Business Expenses and Tax Deductions

Guidance for the Self-Employed and Sole Proprietors:

There are two basic tax concepts new business owners need to add to their vocabulary: business expenses and capital expenses.

Business expenses are the cost of conducting a trade or business. These expenses are common costs of doing business, and are usually tax deductible if your business is for profit. For example, costs of renting a storefront, business travel, and paying employees are all deductible business expenses.

Capital expenses are the costs of purchasing specific assets, such as property or equipment, that usually have a life of a year or more and increase the quality and quantity of products and services. For example, if you own a landscaping business and you purchase mowers and excavating equipment, these costs are capital expenses and do not qualify as deductible business expenses. However, you can recover the money you spent on capital expenses through depreciation, amortization, or depletion. These recovery methods allow you to deduct part of your cost each year. In this way, you are able to recover your capital expenses over time.

READ ENTIRE ARTICLE BY Business.Gov - "In Partnership with IRS.Gov"

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

The Tax Hike Nobody's Talking About

CNN Money: By Blake Ellis, staff reporter

NEW YORK (CNNMoney.com) -- Get ready for a smaller paycheck.

At least that's what could happen if Congress doesn't approve President Obama's proposal to extend the Making Work Pay tax credit soon. The credit, introduced last year as part of the government's stimulus package, boosts paychecks by up to $400 for single filers and up to $800 for joint filers, by reducing the amount of tax withheld from each paycheck.

And that extra $15 bump you're used to getting each bi-weekly pay period is slated to expire at the end of the year unless Congress votes to extend the credit, much like the Bush tax cuts.

But unlike those cuts, which were largely viewed as a benefit for wealthier Americans, the Making Work Pay credit is designed exclusively as a middle-class benefit, and will affect a wider base of taxpayers.

"You hear a lot about the Bush tax cuts, but surprisingly, the [Making Work Pay credit] isn't getting as much attention as you would think," said Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities.

Under the Making Work Pay credit, taxpayers who make $75,000 or less are eligible to receive the full credit, while higher earners can receive partial credit.

Last year, since the tax break didn't go into effect until April, the $400 credit was distributed over the remaining months of the year, so most filers who received the full credit got an extra $15 a week -- as opposed to every two weeks in 2010.

Because the Making Work Pay credit helps out more than 75% of American households, taking this tax break away will save the government much-needed money, but it is likely to cost a lot politically.

"So many people get this credit, it's not going to be easy to take it away," said Elaine Maag, a research associate at the Urban-Brookings Tax Policy Center. "If it isn't [extended], people are definitely going to notice and be upset."

In his $3.8 trillion budget for 2011, Obama proposed a year-long extension to the Making Work Pay credit and pushed to make the tax cuts passed during the Bush administration permanent, except those aiding households that earn more than $250,000 a year.

If the extension isn't passed, the 110 million families that received higher paychecks in 2009 and 2010 will be back to where they started and will owe more taxes than they did during those two years.

And because of the steep cost of keeping the Making Work Pay tax break around -- about $60 billion to extend it one year -- Marr said he wouldn't be surprised if Congress doesn't end up passing the extension.

"The argument to extend the credit is that the economy is weak and the people who get this credit are the people who tend to spend a large share of their income, so if you [don't extend] this, you will decrease their spending, which is a drag on the near-term economy," said Marr. "But on the flip side, it's expensive."

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

IRS Realigns and Renames Large Business Division, Enhances Focus on International Tax Administration

IR-2010-88, August 4, 2010

WASHINGTON — As part of a continuing effort to improve global tax administration efforts, Internal Revenue Service officials announced today the realignment of the Large and Mid-Size Business (LMSB) division to create a more centralized organization dedicated to improving international tax compliance.

As part of the organizational shift, the name of the IRS’s large corporate unit — LMSB — will change on Oct. 1 to the Large Business and International division (LB&I).

“Executing our international strategy is a top priority, and our work continues to intensify in this area,” said IRS Commissioner Doug Shulman. “Every day, we are moving forward in our international compliance efforts. Bringing together our top international personnel in this new group will help us advance our global tax administration efforts and ensure focus and fairness in a critical area for our nation.”

The new LB&I organization will enhance the current International program, adding about 875 employees to the existing staff of nearly 600. Most of the additional examiners, economists and technical staff are current employees who specialize on international issues within other parts of LMSB. READ REMAINDER OF STORY

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

US Small Business Relief Bill Stalls

Legislation which would extend tax breaks available for small business in the US will now not be considered until September after Congress failed to agree on a number of new amendments before the summer recess.

The Small Business Jobs Act of 2010 was introduced in Congress in June, but was first delayed as lawmakers rushed to complete the Wall Street regulation bill and then stalled as Democrats and Republicans argued over a number of amendments added by both sides.

The main thrust of the bill is towards the creation of a new lending facility to assist small firms trying to obtain credit from banks, many of which remain reluctant to lend to small businesses and start-up companies. However, the bill also contains a number of important tax breaks, measures which attracted broad Congressional support.

The legislation seeks to encourage investment in small businesses by allowing investors to exclude the gains from the sale of certain small business stock from their income for tax purposes if the stock is held for more than five years. The bill would also reduce the tax burden for small businesses by allowing them to carry back general business tax credits to offset their tax burdens from the previous five years. Additionally, small businesses would be able to count the general business credits against the Alternative Minimum Tax.

Another section of the bill would permit taxpayers to write off more of the cost of purchases for their business, such as equipment and machinery, in the year the purchase is made, and increase the types of purchases that would qualify for special expensing to include some types of real property, such as leasehold, retail and restaurant improvements.

Other proposals offered in the bill would double the amount of start-up expenditures that may be deducted by someone starting a small business, and allow self-employed individuals to deduct health insurance costs for tax purposes.

In his recent weekly radio address, President Obama accused Republicans of "holding America’s small businesses hostage to politics" by refusing to allow a vote on the bill.

"It’s a bill that includes provision after provision authored by both Democrats and Republicans," he said. "But... the Republican leaders in the Senate once again used parliamentary procedures to block it. Understand, a majority of Senators support the plan. It’s just that the Republican leaders in the Senate won’t even allow it to come up for a vote."

Senate Republican leader Mitch McConnell, however, countered that if anyone is to blame for holding up the bill, it is the Democrats.

“Our friends on the other side have outdone themselves," he stated. "We first got on this bill in late June, and since then, Democrats have set it aside six separate times to move to something else. So from the beginning this bill clearly wasn’t a priority to them."

With unemployment stubbornly high across the US, debate on the legislation, which Democrats claim will create an additional 500,000 jobs, is likely to form a key battle ground in the run up to the mid-term elections, and President Obama would be keen to put his signature on the bill before the November vote.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

US Congress Urged To Pass Internet Sales Tax Law, by Mike Godfrey, Tax-News.com, Washington

Following his introduction of the Main Street Fairness Act into the US House of Representatives a month ago, Representative Bill Delahunt recently joined with a group of politicians and small business owners to urge its passage.

Sales tax revenues comprise up to a third of most US state budgets. The stated objective of the bill is to help those states retrieve billions of lost sales tax revenues that are currently owed but go uncollected due to the sales tax rules across the country.

It is estimated that, in 2010, USD18.6bn will go uncollected and that, by 2012, the states will be losing at least USD23bn annually. In some cases, it was said, these revenue losses can comprise up to one half of a state’s budget shortfall.

The revenues are uncollected because of US sales tax rules across the country, which were confirmed by the Supreme Court in 1992 and which only allow a state to collect sales tax on goods traded between residents of the same state. Thus, online retailers are able to avoid collecting sales taxes from out of state consumers and, the Act’s supporters say, place retailers on local main streets at a competitive disadvantage.

Certain states have been working to fix their problem by formulating an inter-state agreement known as the Streamlined Sales Tax (SST) initiative that contains a uniform set of guidelines. To date, twenty-four states have simplified and streamlined their sales tax laws in this way. However, the agreement cannot take effect without Congressional authority.

The Main Street Fairness Act does not compel any state to join the agreement, but those that choose to adopt this system would then have the authority to require online retailers to collect and remit sales taxes in the same way that businesses on Main Streets do already.

Former Speaker of the Iowa House of Representatives, Chris Rants, said: "Currently, state governments are grappling with a USD68bn budget deficit. States aren't asking the federal government for a handout - states just need the federal government to give them the ability to collect the USD23bn in sales taxes that are already owed."

“Without question, states and local municipalities are facing an unprecedented budget crisis,” Delahunt said. “Instead of raising new taxes, this bill is a common sense approach that allows them to collect taxes that are already owed while coming to the aid of struggling small businesses in our communities.”

“This bill is about fairness and competition. It will help make sure that the store on the corner and the store on the internet are playing by the same rules. This will create fair competition that benefits consumers,” added South Dakota Governor, Mike Rounds. “Tax law should not favor out-of-state retailers over our own corner stores.”

Amongst others, the legislation is supported by the National Retail Federation, Retail Industry Leaders of America, International Council of Shopping Centers, National Governors Association and the National Conference of State Legislatures, together with over 50 state-level retail associations and chambers of commerce.

However, the proposed Act is being fiercely opposed by internet retailers. They contend, for example, that the imposition of sales tax on their sales would be particularly costly, given the myriad of tax rules and rates throughout the US states.

EBay, for example, has stated that the Act “would require small online retailers to comply with varying and regularly changing sales tax rules and rates for thousands of tax jurisdictions and to collect and remit sales taxes from each customer.”

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Attempted Repeal Of Small Business Tax Reporting Requirements Fails In House

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Nevada - New Tax Benefits Aid Employers

Two new tax benefits are now available to employers hiring workers who were previously unemployed or only working part time. The provisions are part of the Hiring Incentives to Restore Employment Act (HIRE). Employers who hire unemployed workers between Feb. 3 of this year and Jan. 1, 2011 may qualify for a 6.2 percent payroll tax incentive. Additionally, for each worker retained for at least a year, businesses may claim an additional general business tax credit of up to $1,000 per worker when they file their 2011 income tax.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

BP Seeks USD10bn Tax Credit

BP Seeks USD10bn Tax Credit

Five Tax Scams to Avoid this Summer

IRS Summertime Tax Tip 2010-08

The Internal Revenue Service issues a list of the top 12 tax scams each year – known as the Dirty Dozen. The scams are illegal and can lead to problems for taxpayers including significant penalties, interest and possible criminal prosecution. These scams don’t just happen during the tax filing season, they can happen anytime during the year. Here are five scams from the 2010 Dirty Dozen list every taxpayer should be aware of this summer.

1. Phishing Phishing is a tactic used by scam artists to trick unsuspecting victims into revealing personal or financial information in an electronic communication. Scams can take the form of e-mails, tweets or phony websites and they try to mislead consumers by telling them they are entitled to a tax refund from the IRS and they must reveal personal information to claim it. Regardless of how official this e-mail may look and sound, the IRS never initiates unsolicited e-mail contact with taxpayers about their tax issues. Phishers use the personal information obtained to steal the victim’s identity, access bank accounts, run up credit card charges or apply for loans in the victim’s name. If you receive an e-mail that you suspect is a phishing attempt or directs you to an imitation IRS website, please forward it to the IRS at phishing@irs.gov. You can also visit IRS.gov and enter the keyword phishing for additional information.
   
   
2. Return Preparer Fraud Dishonest tax return preparers can cause trouble for taxpayers who fall victim to their ploys. Such preparers are skimming a portion of their clients’ refunds, charging inflated fees for tax preparation or are attracting new clients by promising refunds that are too good to be true. To increase confidence in the tax system, the IRS is requiring all paid return preparers to register with the IRS, pass competency tests and attend continuing education.
   
   
3. Hiding Income Offshore Taxpayers have tried to avoid or evade U.S. income tax by hiding income in offshore banks and brokerage accounts. IRS agents continue to develop their investigations of these offshore tax avoidance transactions using information gained from more than 14,700 voluntary disclosures received last year. Taxpayers also evade taxes by using offshore debit cards, credit cards, wire transfers, foreign trusts, employee-leasing schemes, private annuities or life insurance plans.
   
   
4. Abuse of Charitable Organizations and Deductions The IRS continues to observe the misuse of tax-exempt organizations. This includes arrangements to improperly shield income or assets from taxation and attempts by donors to maintain control over donated assets. The IRS also continues to investigate various schemes where donations are highly overvalued or the organization receiving the donation promises that the donor can purchase the items back at a later date at a price the donor sets.
   
   
5. Frivolous Arguments Promoters of frivolous schemes encourage people to make unreasonable and outlandish claims to avoid paying the taxes they owe. If a scheme seems too good to be true, it probably is. The IRS has a list of frivolous legal positions that taxpayers should avoid on IRS.gov. These arguments are false and have been thrown out of court.

For the full list of 2010 Dirty Dozen tax scams or to find out how to report suspected tax fraud, visit IRS.gov.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Levin's Tax Proposals Rebuked, by Mike Godfrey, Tax-News.com, Washington

The Center for Freedom and Prosperity's (CF&P) President, Andrew Quinlan has in a statement denounced US Senator Carl Levin's stated plan to use the amendment process on the small business lending bill to attack so-called ‘tax havens’.

Quinlan said the move demonstrated that Levin is "tone deaf when it comes to the problems facing average Americans." Levin wants to use a bill his colleagues claim is aimed at creating jobs and helping small businesses to place new burdens on investors that will end up destroying jobs, he said.

"This is nothing new from Carl Levin," said Quinlan. "He's been trying for years to place Americans at a competitive disadvantage when it comes to foreign investment. That he now seeks to do so through a bill ostensibly aimed at fixing our unemployment problem is a perverse irony. Nothing he is proposing will help a single out-of-work American."

Although Levin has yet to release the language for his amendment, he launched his most recent campaign, Business and Investors Against Tax Haven Abuse, on the back of a report by three left-wing, non-profit groups, Business for Shared Prosperity, Wealth for the Common Good and the American Sustainable Business Council. The CF&P argued that proposals detailed in the report call ‘for higher taxes on American companies that compete in the global market, onerous new reporting requirements, increased IRS enforcement powers, and provisions that would increase the cost of federal contracts.

Commenting on the report, Quinlan added: "All of these recommendations supported by Levin and his statist front groups would place US corporations at a competitive disadvantage in the international marketplace. None of them will benefit small businesses or jobless Americans."

Concluding, Quinlan stated: "At a time when capital is increasingly mobile, and in order to remain internationally competitive, the US should reject expanding the tentacles of the IRS and instead adhere to the common-sense principle of territorial taxation. Only income earned within the territory of the United States should be subject to US tax law,” he argued.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Nevada Department of Taxation - Taxation Publications

Here's a handy link to the Nevada Department of Taxation. There are several helpful PDFs available for download. Click here to view the files and publications.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Republicans Fail To Kill US Death Tax

The latest attempt by Republicans in the US Congress to permanently repeal estate tax has stalled in the Senate.

Offered as an amendment to the small business jobs bills, Senator Jim DeMin's proposal was thrown out after failing to secure the necessary 60 votes for it to proceed. While two Democrats voted in support of DeMint's amendment, three Republicans joined the majority of Democrats who voted against, and the proposal only garnered 39 votes.

Under tax legislation enacted in 2001, the estate tax rate has been gradually declining while the exemption thresholds have been increasing until, for 2010, the tax has been repealed altogether. However, the tax is scheduled to bounce back at pre-2001 levels - a rate of 55% with an exemption threshold of USD1m for individuals and USD2m for couples - in 2011 if legislation is not passed to permanently repeal it or reduce its scope.

Sen. DeMint argues that the tax, if reintroduced at these levels, would affect thousands of small businesses and lead to higher levels of unemployment.

“The death tax kills jobs, hurts small businesses, destroys family farms and President Obama’s plan to hike it from zero percent to 55% next year is unconscionable,” he said.

“The death tax is an unfair, immoral double tax on property and assets that folks have already paid taxes on throughout their lives. If President Obama and Democrats get their way, Washington could get over half of family estates, farms and small businesses, a greater inheritance than the children of the deceased," he added.

According to DeMint, analysis by the former director of the Congressional Budget Office, Douglas Holtz-Eakin, and the president of Research on the Economics of Taxation, Stephen Entin, found that permanently repealing the death tax, as outlined by the DeMint Amendment, could create 1.5 million jobs.

While many Democrats do support reducing or permanently repealing the estate tax, particularly those from agricultural states, previous attempts to curtail the levy have also failed. Last December, a proposal by US Congressman Earl Pomeroy, a South Dakota Democrat, to make permanent the 2009 estate tax exemption level of USD3.5m for an individual (USD7m for a married couple) and the maximum tax rate of 45%, was approved by the House of Representatives. However, the provision was never voted on in the Senate.

A recent Center on Budget and Policy Priorities analysis suggested that only 100 small business and farm estates would owe any estate tax in 2010 if the 2009 rules were extended.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Levin To Add Anti-Tax Evasion Offsets To Jobs Bill

by Mike Godfrey, Tax-News.com, Washington
Last updated 14 hours ago | Wednesday, July 21, 2010

US Senator Carl Levin is attempting to add an amendment to a small business jobs bill currently pending in the Senate that will close loopholes he says are being abused by multinational corporations to reduce their US taxes.

Levin, a long-time campaigner against offshore tax avoidance, announced his initiative as he launched a new coalition of small businesses set up to highlight the issue of international tax planning strategies by large corporations, known as 'Business and Investors Against Tax Haven Abuse.'

Levin's amendments would attempt to raise billions of dollars in revenue to help fund a lending facility for small businesses which are struggling to obtain credit from banks, as proposed in the Small Business Jobs Act unveiled by Senate Finance Committee Chairman Max Baucus (D-Mont.) and Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu (D-La.) last month.

One of these offset provisions would give the US Treasury Department the authority to block transactions with foreign banks which are found to be "impeding US tax enforcement." The coalition is also seeking a number of other policy changes which it says would level the playing field between domestic businesses and US multinationals, including prohibiting firms from transferring intellectual property offshore to avoid US taxes, and banning "phony offshore corporations" which report income offshore but which have their central place of management in the US.

The coalition also wants disincentives to discourage government contractors from using offshore jurisdictions, including tougher penalties.

Sen. Levin was the major architect of the Stop Tax Haven Abuse bill which failed to gain Senate support for a second time after its reintroduction last year. However, some of the language of this bill was incorporated in the the Foreign Account Tax Compliance Act of 2009 (HR 3933, S 1934), which became law as part of the Hiring Incentives to Restore Employment (HIRE) Act, changing the system of withholding on payments made to non-US persons.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Small Business Expenses and Tax Deductions

Guidance for the Self-Employed and Sole Proprietors

There are two basic tax concepts new business owners need to add to their vocabulary: business expenses and capital expenses.

Business expenses are the cost of conducting a trade or business. These expenses are common costs of doing business, and are usually tax deductible if your business is for profit. For example, costs of renting a storefront, business travel, and paying employees are all deductible business expenses.

Capital expenses are the costs of purchasing specific assets, such as property or equipment, that usually have a life of a year or more and increase the quality and quantity of products and services. For example, if you own a landscaping business and you purchase mowers and excavating equipment, these costs are capital expenses and do not qualify as deductible business expenses. However, you can recover the money you spent on capital expenses through depreciation, amortization, or depletion. These recovery methods allow you to deduct part of your cost each year. In this way, you are able to recover your capital expenses over time.

READ ENTIRE ARTICLE

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Expats Turn Backs On US Taxes, by Mike Godfrey, Tax-News.com, Washington

Last updated 15 hours ago | Monday, July 19, 2010

Increasing numbers of Americans are taking the dramatic step of renouncing their citizenship in order to escape Uncle Sam's all-encompassing tax net.

US citizens are in a uniquely horrible position as expatriates, wherever they reside, since the US is just about the only major nation which taxes its citizens regardless of their residential status, and legislation in recent years has done nothing to improve the situation. And with the Obama administration determined to pass ever-more draconian tax and reporting laws on wealthy individuals and companies stationed offshore in an effort to narrow the federal deficit, estimated at USD1 trillion this year, it seems that many otherwise patriotic Americans are taking the hard-nosed financial choice to escape the clutches of the man from the IRS.

"I run into people like this quite often as part of my travels," observed Daniel J. Mitchell of the Washington-based think tank, the Cato Institute. "They are intensely patriotic to America as a nation, but they have lots of scorn for the federal government."

In the fourth quarter of 2009, 502 US expats renounced their citizenship. This may seem like a drop in the ocean relative to America's total population and the thousands of US expats spread across all quarters of the world, but it was double the number of expats who renounced citizenship in the same period a year earlier. US government figures also indicate that the total number of Americans handing back their passports in 2009 was three-times higher than in 2008, and these headline figures hide the fact that many more hundreds of applications are pending in various US embassies around the world. Indeed, it is said that there is a large backlog of applications pending at the US embassy in London, with some applicants not likely to have their cases dealt with until early next year.

"Even relatively high-tax nations such as the United Kingdom are attractive compared to the class-warfare system that Obama is creating in the United States," observes Mitchell in his blog.

While the Tax Increase Prevention and Reconciliation Act (TIPRA), signed by President Bush in May 2006 increased the amount that can be earned free from US taxes by an expatriate (currently USD91,400) income earned by expats above this threshold is now typically subject to higher tax rates. Furthermore, high housing costs, much of which previously could be excluded from the computation of US tax, are now treated as a taxable benefit, making many individuals worse off, or leaving the employer to pick up the extra bill. A substantial number of US expats were said to have decided to return home as a result.

But more recent legislation has been passed to make it even harder for expatriating Americans. The Heroes Earnings Assistance and Relief Tax Act of 2008 (The 'HEART Act'), which was primarily intended to offer tax breaks to military personnel working abroad, also introduced penal new rules applying to expatriates, as well as addressing some other perceived offshore abuses.

Under the HEART Act, individuals terminating their citizenship are treated as having disposed of all of their property at fair market value on the day before they expatriate or terminate their residence.

However, as Mitchell points out, ultimately, the tax exiles get the last laugh "since the bureaucrats and politicians now get zero percent of their foreign-source income."

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Congress Approves US Financial Reform Bill, by Glen Shapiro, LawAndTax-News.com

Source: Glen Shapiro, LawAndTax-News.com

After a period of delay since its approval by the House of Representatives on June 30, the US financial reform bill was finally approved by the Senate on June 15 and sent to President Obama’s desk to be signed into law.

A committee from both the House of Representatives and the Senate had finalized the terms of the bill before the end of last month, prior to its re-presentation to both sides of Congress for their final approval. It had been hoped that the bill could be approved and sent to President Obama by July 4, but an appropriate amount of time has had to be allowed for review by those Republican senators whose support was necessary for its passage.

In the event, the only major change in the bill during its final review stage has been the removal of a USD19bn levy on the larger banks to fund the cost of the reforms. However, those institutions will still meet part of those costs through increased premium rates paid to the Federal Deposit Insurance Corporation to insure bank deposits.

The bill makes considerable and widespread changes to the regulation of the US financial system. Apart from the section of the bill providing increased consumer financial protection, the bill provides for the orderly dissolution of failing firms, ending “too big to fail”, and tough restrictions are to be imposed on government assistance to banks in times of crisis, so as to eliminate bailouts.

It will create a new body to monitor the market to identify potential threats to the stability of the financial system. Financial firms judged as posing a threat to financial stability will be subject to much stricter standards and regulation, including higher capital requirements, leverage limits, and limits on concentrations of risk. The bill also fills a hole that allows hedge funds and their advisers to escape regulation.

Banks will be required to retain a portion of the risk they generate, in order to provide market discipline for underwriting decisions, and there will be, for the first time, a comprehensive system of regulation of the over-the-counter derivatives market. Restrictions will be placed on the banks' ability to trade derivatives and to take risks by trading on their own account.

In addition, all larger financial institutions will be required to disclose remuneration arrangements that include any incentive based elements. Federal regulators would be authorized to ban inappropriate or imprudently risky compensation practices.

After the bill’s approval by the Senate, the Treasury Secretary, Timothy Geithner, said that the bill is a “tough overhaul” of the US financial system. He added that “the message of this bill is clear: banks – not the taxpayers – will pay for future bank failures and consumers will be protected."

On hearing of the bill’s passage, President Obama also called it an “end to bailouts, a beginning for accountability”. First and foremost, he said that, “because of this reform, the American people will never again be asked to foot the bill for Wall Street’s mistakes.”

“There will be no more taxpayer-funded bailouts – period,” he continued. “If a large financial institution should ever fail, this reform gives us the ability to wind it down without endangering the broader economy. And there will be new rules to end the perception that any firm is ‘too big to fail’, so that we don’t have another Lehman Brothers or AIG.”

However, all parties also agree that the bill is only a beginning, and that it will take a considerable amount of work to put the financial reforms into effect. According to Geithner: “As soon as the President signs this bill into law, we will move forward to design and implement these new protections and to consolidate responsibility and authority.”

This was also recognized by the Commodity Futures Trading Commission (CFTC) chairman, Gary Gensler, whose view was that: “Even after the President signs the Wall Street reform bill, financial reform will be far from complete. The Securities and Exchange Commission, the Federal Reserve, the Federal Deposit Insurance Corporation, the Treasury Department and the CFTC, among others, will have a significant number of rules to write and implement to regulate the financial system.”

As the bill requires strong regulation of over-the-counter derivatives dealers for the first time, Gensler confirmed that, for example: “Just at the CFTC, we have organized around 30 areas where we believe rules will be necessary. Some of these areas will require only one rule, while others may require more. We will be required to complete these rules generally in 360 days, though we will be required to complete some of them in 90, 180 or 270 days.”

Geithner is also aware of the bill’s international implications, particularly with regard to the on-going discussions on financial regulation in the G20. “Recognizing that financial markets are truly global,” he confirmed that the US “will work hard to bring the rest of the world along with us as we raise the standards of financial protection in the US and reinforce the competitiveness of our country’s most innovative firms.”

Contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz