On January 1, 2011, the capital gain tax reduction that was signed into law by President Bush under the Tax Increase Prevention and Reconciliation Act will “sunset.” The tax rate will revert from the current 15 percent rate back to the former 20 percent capital gain tax rate that was in effect prior to 2003.

If you are using our payroll system we can do it for you or you can follow the instructions:

To comply with the HIRE Act, you may mark an eligible employee exempt for employer Social Security contribution in the payroll account. To mark the exemption for an eligible employee:

1. Click Employees from the top navigational bar.
2. Click the employees name.
3. Click Edit in the ‘Taxes & Exemptions’ section.
4. Click Edit in the Exemptions section.
5. Check the box for HIRE Act exemption.
6. Click Save.

Important 1099-MISC Filing Deadlines

If you do need to file 1099-MISC forms, then we can help. Our 1099-MISC E-File service walks you through the entire process. It supports reporting for rents (box 1), independent contractors (box 7), and attorney’s fees (box 14)

If you have a  C corporation (regular corp.) you can fill out 1120 IRS form for federal taxes.  Nevada doesn’t have any state taxes therefore you don’t have to worry about state tax return.

Form 1120: http://www.irs.gov/pub/irs-pdf/f1120.pdf

Instructions:
http://www.irs.gov/pub/irs-pdf/i1120.pdf

For example decuctions for meals:

• Actual cost 50% limit
• Standard meal allowance. Per diem rates.

Check the IRS publication 463 for full information.

The American Recovery and Reinvestment Act (ARRA), enacted in February, created, extended or expanded a variety of business tax deductions and credits. Because some of these changes—the bonus depreciation and increased section 179 deduction, for example—are only available this year, eligible businesses only have a few months to take action and save on their taxes. Here is a quick rundown of some of the key provisions.

Faster Write-Offs for Certain Capital Expenditures

Many small businesses that invest in new property and equipment will be able to write off most or all of these purchases on their 2009 returns. The new law extends through 2009 the special 50 percent depreciation allowance, also known as bonus depreciation, and increased limits on the section 179 deduction, named for the relevant section of the Internal Revenue Code. Normally, businesses recover these capital investments through annual depreciation deductions spread over several years. Both of these provisions encourage these investments by enabling businesses to write them off more quickly.

The bonus depreciation provision generally enables businesses to deduct half the cost of qualifying property in the year it is placed in service.

The section 179 deduction enables small businesses to deduct up to $250,000 of the cost of machinery, equipment, vehicles, furniture and other qualifying property placed in service during 2009. Without the new law, the limit would have dropped to $133,000. The existing $25,000 limit still applies to sport utility vehicles. A special phase-out provision effectively targets the section 179 deduction to small businesses and generally eliminates it for most larger businesses.

Bonus depreciation and the section 179 deduction are claimed on Form 4562. Further details are in the instructions for this form.

Expanded Net Operating Loss Carryback

Many small businesses that had expenses exceeding their incomes for 2008 can choose to carry those losses back for up to five years, instead of the usual two. For small businesses that were profitable in the past but lost money in 2008, this could mean a special tax refund. The option is available for a small business that has no more than an average of $15 million in gross receipts over a three-year period.

This option is still available for most eligible taxpayers, but only for a limited time. A corporation that operates on a calendar-year basis, for example, must file a claim by Sept. 15, 2009. For eligible individuals, the deadline is Oct. 15, 2009.

Eligible individuals should file a claim using Form 1045, and corporations should use Form 1139. Details can be found in the instructions for each of these forms, and answers to frequently-asked questions are posted on IRS.gov.

Exclusion of Gain on the Sale of Certain Small Business Stock

The new law provides an extra incentive for individuals who invest in small businesses. Investors in qualified small business stock can exclude 75 percent of the gain upon sale of the stock. This increased exclusion applies only if the qualified small business stock is acquired after Feb. 17, 2009 and before Jan. 1, 2011, and held for more than five years. For previously-acquired stock, the exclusion rate remains at 50 percent in most cases.

Estimated Tax Requirement Modified

Many individual small business taxpayers may be able to defer, until the end of the year, paying a larger part of their 2009 tax obligations. For 2009, eligible individuals can make quarterly estimated tax payments equal to 90 percent of their 2009 tax or 90 percent of their 2008 tax, whichever is less. Individuals qualify if they received more than half of their gross income from their small businesses in 2008 and meet other requirements. For details, see Publication 505.

COBRA Credit

Employers that provide the 65 percent COBRA premium subsidy under ARRA to eligible former employees claim credit for this subsidy on their quarterly or annual employment tax returns. To help avoid imposing an unnecessary cash-flow burden, affected employers can reduce their employment tax deposits by the amount of the credit. For details, see Form 941. Answers to frequently-asked questions are posted on IRS.gov.

Other ARRA business provisions relate to discharges of certain business indebtedness, the holding period for S corporation built-in gains and acceleration of certain business credits for corporations. Also see Fact Sheet FS-2009-11.

The company is Taxes Plus LLC
Contact Stephanie Schaefer via email sschaefer@TaxesPlusUS.com or call (201) 683-7375.

Alaska
New Hampshire
Tennessee
Florida
South Dakota
Washington
Nevada
Texas
Wyoming

Source: IRS

The IRS required that taxpayers maintain accounts or books of record capable of enabling a reviewer to establish the correct income, deductions, credits or other matters affecting tax or informational returns. No specific recordkeeping requirements are contained in the IRS Code; however, the following guide complied by the American Institute of Certified Public Accountants can help.

Retain Permanently
-Audit reports
-Capital stock and bond records
-Cash books
-Charts of accounts
-Checks – canceled – for important payments i.e., taxes, purchases of property, special contracts, etc. Checks should be filed with the papers pertaining to the underlying transactions
-Unexpired contracts, mortgages, notes, leases, deeds
-Correspondence – legal and important
-Depreciation schedules
-General ledgers and year end trial balances
-Financial statements (year end)
-Insurance records, current accident reports, claims, policies, etc.
-Journals
-Minute books of directors, stockholders, bylaws and charter
-Patents and related papers
-Property appraisals by outside appraisers
-Property records, including costs, depreciation schedules, year end trial balances, blueprints and plans
-Retirement and pension records
-Tax returns and worksheets, revenue agents’ reports, and other documents relating to determination of income tax liabilities
-Trademark registration and copyrights
-Training manuals
-Union agreements
Retain for 7 years
-Accident reports/ claims (settled cases)
-Account payable ledgers and schedules
-Accounts receivable ledgers and schedules
-Checks – canceled
-Expired contracts, mortgages, notes, leases, deeds
-Expense analysis/distribution schedules
-Garnishments
-Inventory listings
-Invoices (to customers, from vendors)
-Notes receivable ledgers and schedules
-Payroll records and summaries
-Personnel files (terminated)
-Petty cash vouchers
-Purchase orders
-Sales records
-Scrap and salvage records
-Stock and bond certificates (canceled)
-Time records/ cards
-Voucher register and schedules
-Vouchers for payment to vendors, employees, etc. — including allowances and reimbursement of employees, officers, etc
-Withholding tax statements

Retain for 3 years
-Employment applications
-Insurance policies (expired)
-Internal audit reports
-Internal reports (miscellaneous)
-Physical inventory tags
-Sales commission reports

Retain for 2 years
-Bank Reconciliation’s
-Correspondence – general or routine
-Duplicate deposit tickets

Retain for 1 year
-Receiving reports
-Requisitions
-Stockroom withdrawal forms

Source: Sattel, Johnson & Appel

1. Keeping corporate records about shareholder and directors meeting is very important. Also keeping corporate minutes from all important decisions by board of directors and shareholders. It doesn’t matter if you have one man company. You still have to do meetings and keep the minutes. If you don’t know how we can help you. See our full service for preparing corporate minutes for $20-$25.

2. When taking personal loan to shareholders/officers from your company do not forget to charge interest rate.