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Tax Tips

Tax Tips. PRESENTED BY: Jim Griffing , Treasurer , Silver Fox Associate . George Connelly , Silver Fox Advisor. Griffing Background. Jim Griffing is both a CPA and CFE.

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Tax Tips

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  1. Tax Tips PRESENTED BY: • Jim Griffing, Treasurer, Silver Fox Associate. • George Connelly, Silver Fox Advisor.

  2. Griffing Background Jim Griffing is both a CPA and CFE. After years of experience as a Regional Tax Partner with another firm, he founded Griffing & Company, P.C., a full service certified public accounting firm in 1987. MS in Taxation degree from Drexel University.

  3. Connelly Background • George Connelly is the head of the Chamberlain Hrdlicka law firm’s Tax Controversy and Litigation Section. • His previous experience includes working for the IRS as a Special Trial Attorney. • He received a bachelor's degree in accounting from Northwestern University and later graduated from the Northwestern Law School.

  4. Making Work Pay Credit A refundable tax credit against income tax in an amount equal to the lesser of 6.2% of the individual’s earned income or $400 ($800 for married couples filing jointly). Phased out for individual’s with AGI in excess of $75,000 ($150,000 if filing jointly). Withholding effects everyone receiving a W-2, even those over the AGI threshold.

  5. Economic Recovery Payment Individuals on fixed incomes (primarily Social Security recipients, railroad retirees, disabled veterans, and retired government workers) will receive a onetime payment of $250. This payment will reduce any Making Work Pay credit to which the individual would otherwise be entitled.

  6. First-Time Homebuyer Tax Credit Credit is raised to $8,000 Extended through November 30, 2009 Also, eliminates any required repayment to the IRS after 36 months in the home Starts to phase-out for taxpayers with AGI in excess of $75,000 ($150,000 for joint filers)

  7. Property Tax Write-Off With Standard Deduction • Taxpayers who take the standard deduction can add the amount of property taxes paid this year, up to $500 for single filers and $1,000 for joint filers.

  8. Sales Tax Deduction on New-Vehicle Purchases • Maybe be able to deduct the state and local sales and excise taxes on purchases of new cars, light trucks, motor homes and motorcycles between Feb. 17 and Dec. 31. • Phased out for joint filers with modified AGI between $250,000 and $260,000.

  9. ‘Cash For Clunkers’ Rebate • Can get a rebate of up to $4,500 on vehicles that get 18 miles per gallon or less, have been registered and insured for at least a year on the trade-in date, and must be less than 25 years old.

  10. Education Credit HOPE education credit renamed to the American Opportunity Tax Credit Extended to all four years Maximum amount is $2,500 per year on $4,000 in qualifying payments Phased out for AGI at $80,000 ($160,000 filing jointly)

  11. Earned Income Tax Credit Increased to 45% of the first $12,570 of earned income for taxpayers with three or more qualifying children. Phase out range has been adjusted upward by $1,880 for joint filers.

  12. Unemployment Compensation An amount up to $2,400 of unemployment compensation can be excluded from a recipient’s gross income for 2009.

  13. Qualified Tuition Programs For 2009 and 2010 the new law allows beneficiaries of qualified tuition programs to use tax-free distributions to pay for computers and computer technology, including internet access

  14. Business IncentivesBonus Depreciation The new law extends through 2009, the bonus depreciation (50%) Allowed under the 2008 Economic Stimulus Act for property. Also, the regular dollar cap for new vehicles placed in service in 2009 is raised again by $8,000, effective January 1, 2009.

  15. Code Sec. 179 Expensing The increased 2008 small business expensing amount of $250,000 and the increased threshold for reducing the deduction of $800,000 have been extended to 2009.

  16. Work Opportunity Tax Credit The Work Opportunity Tax Credit reduces the taxes for small businesses hiring target groups like ex-felons, unemployed veterans, food stamp recipients and disconnected youth. Credit can be as high as $9000 in some instances.

  17. Estimated Taxes The new law decreases required estimated tax payments from 100% to 90% of 2008 tax for individuals whose income primarily comes from a small business in 2009.

  18. COBRA Benefits An individual who is involuntary separated from employment between September 1, 2008, and January 1, 2010, can elect to pay 35% of his/her COBRA coverage and have it be treated as paying the full amount. Employers receive a credit to cover their extra expense.

  19. Energy IncentivesResidential Energy Property Credit Raised to 30% Maximum cap is $1,500 for 2009 and 2010 installations $500 lifetime cap is eliminated Effective for property placed in service after December 31, 2008 and before January 1, 2011. Improvements eligible include insulation materials, exterior windows/doors, central air conditioners, propane or oil water heaters.

  20. Disaster Losses • For 2009, disaster losses can be claimed even if the taxpayer takes a standards deduction. The losses no longer have to exceed 10% of the taxpayer’s AGI.

  21. Roth IRA 2010 Conversions • Conversion available to Roth IRA without the income limitation for one year only. • Tax can be divided up between 2011 and 2012.

  22. IRA Distributions to Charities Excluded From Income • IRA owners age 70 ½ or older can transfer up to $100,000 from their IRAs tax-free to charities.

  23. Net Operating Loss Carryback • Small businesses can offset losses by getting refunds on taxes paid up to five years ago.

  24. Tax-Exempt Organizations • There is a new and more complex Form 990 to file each year. • If a tax-exempt organization does not file their Form 990-N for 3 consecutive years they will loose their tax-exempt status.

  25. Tax-Free Exchange of Rental Property • Beginning March 10, 2008 you may qualify for a tax-free exchange of one piece of rental property you own for a similar piece of rental property, even if you have used the rental property for personal uses.

  26. Tax Rates for the Years 1988-1990

  27. Tax Rates for the Years 1991-1997 Tax Rates On Capital Gains (If Seller Had Owned the Sold Asset For…)

  28. Tax Rates for the Years 1997-2002 Tax Rates On Capital Gains (If Seller Had Owned the Sold Asset For…)

  29. Tax Rates for the Years 2003-2008 Tax Rates On Capital Gains (If Seller Had Owned the Sold Asset For…)

  30. The Top 5 Things You Need to Know About Your Taxes...

  31. Top 5 Things You Need to Know About Your Taxes 1. Taxes Are Not A Sport For Amateurs!

  32. Top 5 Things You Need to Know About Your Taxes 2. Never Ignore Contact By The IRS!

  33. Top 5 Things You Need to Know About Your Taxes 3. If You Get Behind, You Must Get In Compliance Before The IRS Will Consider A Collection Alternative!

  34. Top 5 Things You Need to Know About Your Taxes 4. Trust Fund Taxes Must Be Paid Even If It Means You Go Hungry!

  35. Top 5 Things You Need to Know About Your Taxes 5. A Person Who Represents Himself Before The IRS Has A Fool For A Client!

  36. Questions?

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