Welcome to Business Accountant!
Each of our clients is extremely important to us! We apply knowledge and expertise accumulated over many years to give direction and customized advice to each client. We are not merely historians but are directly involved in creating and influencing the unfolding of history. Our objectivity and overall understanding of our clients' needs enable us to provide critical business advice in a variety of situations. Please browse our site and contact us if your needs match our services.
News added, Los Angeles, May 1st, 2008: Foreign Taxpayers:
For the first time, the IRS will be doing random audits of tax returns for foreigners with US Income.
This new effort is part of a larger project to improve its enforcement.
The US tax court recently ruled that income earned by a US citizen while working +in international waters is taxable income. International waters are not under the sovereignty of any country and therefore would not create a situation of double taxation.
News added, Los Angeles, March 1st, 2008: Businesses and Outside Contractors:
The IRS will be paying closer scrutiny to businesses that may be misclassifying workers as outside contractors to save on employment taxes. The IRS has developed an electronic matching system enabling them to identify workers with 1099 payments of more than $25,000 and no other sources of income. Businesses with 5 or more outside contractors meeting these two criteria can expect to be audited in 2008.
News added, Los Angeles, February 25th, 2008: Rebate Checks:
Rebate Checks - When?
As soon as early May for April 15th filers.
Who?
2007 tax return filers with earned income.
How Much?
Married filers will receive a maximum of $1200 plus $300 for each child.
Single filer's maximum is $600 plus $300 for each child. Rebates phase out starting at $75k AGI for singles and $150k for married filers. Rebates are reduced by $50 for each $1,000 of income over these amounts.
News added, Los Angeles, February 8th, 2008: 2008 Tax News Update:
Are you curious about your chances of being audited by the IRS?
These were the statistics for your chances of audit in 2007:
Individuals overall: 1 in 97 returns (1.03%)
Individuals grossing more than $1 million: 1 in 11 returns (9.25%)
Individuals grossing over $100K but less than $1 million: 1 in 56 returns (1.77%)
Individuals grossing less than $100K: 1 in 108 returns (.93%)
S-Corporations: 1 in 222 returns (.45%)
Partnerships: 1 in 238 returns (.42%)
Small C-Corporations: 1 in 108 returns (.92%)
All categories experienced an increase in percent audited, though the increase was slight. The most significant increase occurred for individuals with over $1 million in gross income.
For 2008, there is a decreased tax rate on long-term capital gains for taxpayers in the 10-15% tax bracket, from 5% to 0%. This will not benefit children as kiddie tax age has increased to 19.
News added, Los Angeles, January 22nd, 2008: 2008 Tax Regulation Update:
For homes sold after 2007, a surviving spouse now can claim the $500,000 gain exemption if sale is within two years of the spouse's death.
The sale of land adjacent to a primary home lot can be included in the $500,000 exclusion on the sale of the home. This applies if the lot was used as part of the home and if it was sold within two years of after or preceding sale of the home.
The IRS has now made it easier to claim an unrelated child as a dependent if the child lived and year and was supported by the tax payer. The change will especially help unmarried cohabitants. This is effective retroactively to 2005.
News added, Los Angeles, January 8th, 2008: Apply for Your EIN Online!
Many business entities need to apply for an EIN (Employer Identification Number) from the IRS. Much like an individual's Social Security number, the EIN uniquely identifies separate businesses ...
News added, Los Angeles, January 4th, 2008: Social Security Tax Wage Limit Increased for 2008
Social Security taxes on employee wages and self employment income is still 6.2% and 12.4% respectively. However, the IRS sets a limit on how much income is subject to this tax. In the 2007, the wage limit was $97,500, meaning income above this amount was not taxed for social security. For 2008 ...
News added, Los Angeles, December 15th, 2007:
New additions to the list: What is and What is Not Tax Deductible for Income Tax
News added, Los Angeles, December 1st, 2007: Court Upholds IRS Rule Closing Real Estate Tax Loophole
The tax code severely limits losses generated from passive real estate holdings. These kinds of losses are capped at low levels and in many cases excluded entirely. If, however, the taxpayer has passive income from other real estate holdings the loss can offset that income.
News added, Los Angeles, August 1st, 2007: Energy Efficient Vehicles (Green Cars)
Anyone considering buying a new energy efficient vehicle (green car) has probably heard about the possible
tax credit, but be aware that the available credit can change even for the same vehicle.
News added, Los Angeles, July 27th, 2007: Eight Tax Saving Credits
News added, Los Angeles, June 10th, 2007: Using a Traditional IRA
Advantages and disadvantages of using a traditional IRA
News added, Los Angeles, March 1st 2007:
For 2006 and 2007, a tax act was passed providing for certain energy efficient home upgrades
The credit is refundable but is limited to a lifetime maximum of $500. In order to qualify the homeowners must be the initial users of the equipment and the equipment anticipated to last five years or more. Upgrades fall into two categories detailed below.
Homeowner Energy Upgrades Credit 10%
The credit for these items is worth 10 % of the upgrade.
Eligible upgrades include:
· Insulation
· Heating/cooling systems
· Windows
· Doors
· Certain heat deflecting roofs
Homeowner Energy Upgrades Credit 100%
Some purchases entitle homeowners to a credit for the entire cost of the purchase price. The cap on the credit for these items ranges from $50 to $300. Eligible upgrades include:
· Water heaters
· Central air conditioning
· Advanced main air-circulating fans
News added, Los Angeles, February 2nd 2007:
California enacted SB 1827 as law, beginning January
1, 2007, which requires registered domestic partners
to use the same filing status as married couples.
For
their 2007 tax returns, most registered domestic
partners will use either married filing joint or
married filing separate filing status (applying the
same rules applicable to spouses). In preparation for
this new law, registered domestic partners may want to
update withholdings or estimated tax payments for
their 2007 tax return that will be filed in 2008. To
adjust your withholding, go to
www.ftb.ca.gov/individuals/wsc/adjst_wgs.html
Federal law does not recognize registered domestic
partners. Registered domestic partners will remain
individual filers for federal purposes. Where
preparation of a California return relies on a federal
return or federal law, registered domestic partners
may need to perform special calculations to arrive at
the proper California tax.
News added, Los Angeles, January 23rd 2007:
Charity is a big tax deduction for many taxpayers!
Legislation passed in August 2006 changed many of the existing charitable contribution rules. Some highlights are listed below.
· Charitable contributions of clothing and household items are now only deductible if the items are in "good" condition. In some situations exemptions exist to this modification. This rule takes effect on contributions made after August 17, 2006.
· Contributions of money, regardless of the amount, now require substantiation. A bank record or a written communication from the donee, showing the donee name, date of contribution, and the contribution amount is required.
· The penalties on overstatement of contributed property values have been increased.
News added, Los Angeles, January 1st 2007:
Opportunities for Year-end tax planning are running out.
Some frequently used strategies are listed below:
· Take advantage of the full $108,000 expense deduction for fixed assets purchased in 2006.
· Smooth out taxable income between 2006 and 2007 by accelerating and postponing transactions.
· Maximize the tax law limits on annual contributions to your retirement plan accounts.
· Match long and short-term capital gains with losses to lower overall capitals gains tax.
· Make sure to maximize the $3,000 amount of capital losses that can offset other income.
· For S corporations, make certain that your stock basis is high enough to entitle you to any available loss deductions.
Proactive tax planning to take advantage of timely tax saving opportunities.
Comprehensive business services that integrate income tax compliance
and planning with investments and insurance choices.
Consulting services that review businesses to find hidden opportunities to
increase wealth accumulation and retention.
Foreign investor tax services.
Individualized accounting system setup for new businesses.
State of the art payroll tax services and sales tax preparation.
Preparation of business and individual tax returns and financial
statements.
Budgeting and projection preparation and monitoring, facilitating the
creation and tracking of events.
Assistance in selection and installation of computer hardware and
software, ongoing monitoring and updating of systems.
