1 / 30

2011 Tax Planning Seminar

2011 Tax Planning Seminar. Presented by. Darren J Szendre, CPA. Tax Rate Forecast. 2011/2012 Child Tax Credit $1,000 per child. Education Credits. Hope Scholarship Credit Replaced With (American Opportunity Tax Credit) = $2,500 maximum $1,000 is refundable Phases out at $160,000 AGI

rivka
Download Presentation

2011 Tax Planning Seminar

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. 2011 Tax Planning Seminar Presented by Darren J Szendre, CPA

  2. Tax Rate Forecast

  3. 2011/2012 Child Tax Credit$1,000 per child

  4. Education Credits Hope Scholarship Credit Replaced With (American Opportunity Tax Credit) = $2,500 maximum • $1,000 is refundable • Phases out at $160,000 AGI • Extended only through 2011 • Includes first 4 years undergraduate • Includes textbooks, supplies, computers, etc. • No room and board Lifetime Learning Credit = $2,000 maximum

  5. Making Work Pay Credit • $400 or $800 has been eliminated for 2011. • Replaced with Payroll Tax Cut • Social Security rate for an employee is now at 4.2% • If you make $106,800 it will save you $2136 in 2011. • Expires December 31, 2011.

  6. Standard Deduction 2011 • Single Filers: $5,800 • Joint Filers: $11,600 • Married Filing Separately: $5,800 • Head of Household: $8,500

  7. Other Deductions • Teachers continue to get $250 above the line deduction – remainder goes on Sch A. • National guard expenses – travel, uniforms, etc. • HSA deduction – up to $6150 • Moving expenses • Tuition and fees above the line

  8. Itemized Deductions Reduce Taxable Income • Medical expenses • Property, sales tax(expires 12/31/11), state income, personal property • Interest expenses • Investment expenses • Charitable contributions -- documentation

  9. Donating to Charity? • Donations of cash or property to qualified charities are deductible. • Charitable donations are limited to 50% of your adjusted gross income. • Deductions for vehicle donations are limited for vehicles worth more than $500.

  10. 2012 Limits • 401k salary deferral is $17,000 • Social security wage base is $110,100 • HSA Individual is $3100 • HSA Family is $6250

  11. 401(k) Contribution Limits Under Age 50: $16,500/$17,000 in 2012 Additional “Catch-Up” for those Age 50 and Older: $5,500

  12. The Roth 401(k) • Contributions are made with after-tax dollars. • Earnings grow tax free. • Distributions are tax free in retirement.

  13. Roth IRAs • Make contributions with after-tax dollars • Receive tax-free distributions

  14. Roth IRA Income Limits*

  15. Taxes Reduced for Capital Gains and Dividends through 2011

  16. AMT Danger Zones • Large capital gains • Numerous dependency exemptions • Large state income tax deductions • Large deductions for unreimbursed employee business expenses or miscellaneous expenses • Substantial medical expenses • Incentive stock options

  17. Dividend Tax Rates • 15% for investors in the top four brackets • Zero tax through 2011 for investors in the 10% and 15% brackets

  18. Dividend vs. Ordinary Income Ordinary income rates 10% – 35% Dividend rates 0% – 15% Rates apply for both regular tax and AMT.

  19. Business Owners Increased Section 179 expensing **2011 $500K of Section 179, $2 Million phaseout, 100% bonus depreciation **2012 $125K of Section 179, $500 phaseout, $0 Bonus **2013 $25K of Section 179, $200K Phaseout, $0 Bonus

  20. QUARTERLY & ANNUAL REPORTS • DO IT RIGHT THE FIRST TIME AND EVERY TIME!!! • File the reports correctly and timely • Do not postpone the report filing even if you don’t have the funds to pay • Many local CPAs offer this service for a low fee • Quarterly and/or Annual reports are due with: • Washington State Department of Revenue • Washington Employment Security • Labor & Industries • Federal Form 941/W2/W3/1099 AND MORE

  21. PAYROLL ISSUES • DO IT RIGHT THE FIRST TIME AND EVERY TIME!!! • Set up a separate payroll account at the bank. • Withhold the correct Federal income tax, social security, and Medicare • Transfer funds to payroll account • Remit and deposit the funds – TIMELY!!! • Do not spend your employees Federal and/or state withholdings – THIS WILL SINK YOUR COMPANY!! • Withholdings do not belong to you – you are the trustee for the money

  22. Business Pitfalls • Monthly Reconciliation – Why? • Guard your cash, assets, and other resources (proprietary information, patents, etc.) • Cash oriented businesses – setup internal controls, basic procedures, or controls within your accounting software or point of sale system. • Fraud can occur at any stage of your business – don’t wait to set up controls (Separation of Duties) and perform reconciliation • Do you look at the bank statement monthly – review cancelled checks?

  23. PENALTIES – pay or play mandate • 2014: 1% of household income or $95, whichever is more • 2015: 2% of household income of $325, whichever is more • 2016 and after: 2.5% of household income or $695, whichever is more.

  24. PENALTIES – EMPLOYER – pay or play • 2014: annual penalty is equal to total number of FT employees minus 30 times $2,000 • 2015: penalty payment will be indexed by a premium percentage

  25. PENALTIES – EMPLOYER – 2nd Penalty • 2014: annual penalty is equal to total number of FT employees times $3,000 • 2015: penalty payment will be indexed by a premium percentage

  26. Why Plan? • Your estate may be larger than you think. • Changes in tax laws do not eliminate the need for estate planning. • Failure to plan your estate may result in legal and financial problems for your heirs.

  27. Gift and Estate Tax Exemptions

  28. “Gifting” Your Way to Savings • You can make tax-free gifts of up to $13,000 per person, per year. • Married couples can gift a total of $26,000 per person, per year. • You can make unlimited tax-free gifts by setting up direct payments to educational institutions and medical providers.

  29. Gifting Advantages • Post-gift appreciation escapes estate tax. • To the extent of the $13,000/$26,000 per donee, per year annual exclusion, no transfer tax is ever imposed. • Gift tax paid reduces your taxable estate. • Post-gift income is taxed to the recipient.

  30. 2011 Tax Planning Seminar Presented by Tri-Cities Tax LLC – Darren Szendre, CPA 509-582-2000

More Related