In the news... Current Tax Tidbits - Updated 11/9/11 Social Security Payments in 2012 Senior citizens will see an increase in their social security checks because of a 3.6 cost-of-living for 2012. Also, individuals between ages 62 and 66 can earn up to $14,640 in 2012 before they lose any benefits. Medicare Part B Premiums in 2012 The standard premium will increase $3.50 per month. The new monthly premium will be $99.90. This increase is much less than the predicted increase of $10.20. Higher income individuals will actually see a decrease in Medicare premiums of $20.00 to $50.00 per month. Estate Taxes The Estate Tax exemption has been set at $5 million for 2011 and 2012. The step-up in basis in the estate assets has been restored for these years. Without further legislation, the exemption amount will revert back to $1 million in 2013. Required Minimum Distributions - IRA's and Pensions Minimum distributions are required again for those aged 70 1/2 or older. The minimum distribution should be taken by December 31, 2011. Those that turn 70 1/2 in 2011 may delay their first distribution until April 1, 2012. However, they will need to take another distribution by December 31, 2012. IRA Contributions for 2011 Traditional and Roth IRA contributions limits are $5,000 for those under age 50. For those age 50 or older, the maximum contribution is $6,000. Contributions can be made through April 15, 2012 for the 2011 tax year. Deductibility depends on eligibility to participate in an employer sponsored retirement plan as well as adjusted gross income limitations. Roth IRA contributions are never deductible. Standard Mileage Rates The standard business mileage rate for 2011 is .51 cents per mile from January-June and .555 cents per mile from July-December. Medical and moving rates are .19 cents per mile from January-June and .235 cents per mile from July-December. Charitable contribution mileage remains at .14 cents per mile. Repeal of Form 1099 Reporting for Landlords Landlords will not have to complete Form 1099s in connection with rental activities for any payments made on or after January 1, 2011. The recent law requiring that Form 1099s be issued for annual payments to outside vendors exceeding $600 has been repealed. Just for fun... In general, 39 percent of people bite their nails. But among those who don't do their own taxes, only 24 percent bite their nails! So, if you want to stop biting your nails, give us a call! (Based on a survey of 202 people who don't do their own taxes and 562 people in general) Click for previous articles including: What does the FDIC cover? Do I Owe Use Taxes? New tax breaks for 2009!! 
| 1. Employee reimbursement plans EMPLOYEE REIMBURSEMENT PLANS CAN SAVE YOU MONEY AND PROVIDE A BENEFIT TO YOUR EMPLOYEES! Expense reimbursement for employees remains a great tax savings vehicle for both employers and employees. Here is how it works:
IRS and State regulation require that taxes be withheld from expense allowances. Remember employees cannot receive both a 1099 and a W-2 form from the same employer for the same time period. All employees and employers must pay payroll taxes on auto or expense allowances. The expense allowance amount would be included in wages and taxes withheld. However, if you set up a qualified reimbursement plan, none of the reimbursed expenses are reported on the employee’s or officer’s W-2 or 1099 form as income. The employee/officer will receive the total amount of the reimbursement for auto, travel or other expenses tax-free! In addition, the company will be able to deduct the amount of the reimbursement from taxable income. If you would like information on how employee reimbursement plans can save you taxes, please call our office at 951-681-2784.
2. Flex Plan or Section 125 Benefit Package BOTH THE EMPLOYEES AND THE EMPLOYER KEEP MORE MONEY! Increases Employees’ Benefits and Take Home Pay Employees who are participants in the Flexible Compensation Plan are reimbursed for eligible expenses with pre-taxed dollars. The tax savings provide increased benefits and the employee takes home a larger paycheck. It’s a great employee benefit.
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Some Transactions Deserve Special Treatment
Passage of the Tax Reform Act of 1997 is cause to look closer at your tax returns
It’s a good idea to invest a little extra time if you have had the following transactions: Sales of stock and other property »
Gifted or inherited property »
Reinvested dividends »
Sale of home or property »
Car expenses »
Charitable donations »
Estimated tax payments »
Other general suggestions to consider for your appointment »
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