Tax & Notary - Topics of Interest

Guide to Retirement Plans for Small Business Owners

The IRS has introduced a new Retirement Plans Navigator that allows business owners to compare the various types of retirement plans available.  The Navigator compares the payin limits, filing requirements and basis operational rules of the various plans.  All small business owners should take advantage of the tax deductions made available to them for contributing to a retirment plan.  Go to www.retirementplans.irs.gov to view it.  Click here to return or go to our web site at www.PlatinumProStudies.com

IRS Topics of Interest for 2009 Now on YouTube & iTunes

The Internal Revenue Service today announced the availability of video and audio products to help taxpayers take full advantage of the 2009 tax provisions in the American Recovery and Reinvestment Act.

The IRS has launched a YouTube video site and an iTunes podcast site to better serve taxpayers.

People can visit the video site at http://www.youtube.com/irsvideos to view information about the Recovery, tax tips and how-to videos. These videos will be in English, Spanish, American Sign Language and other languages. When you enter the site, scroll down to Playlists then click Recovery to play the series of videos.

The YouTube focus will be on the provisions of the American Recovery and Reinvestment Act. Videos will highlight the $8,000 first-time homebuyer’s credit for those who purchase a house this year, the sales or excise tax deduction on new car purchases and the expanded credits for education and energy conservation.

The IRS YouTube channel will debut with seven Recovery videos in English and ASL and eight in Spanish. Also, included will be a video on using the IRS Withholding Calculator. Many workers received the Making Work Pay tax credit in April through their tax withholding at work. However, people who have more than one job or working spouses should especially check their withholding to ensure neither too much nor too little is being withheld. People can use the calculator to help determine if they should make adjustments.

People can visit the audio site at the IRS Multimedia Center to listen to IRS podcasts. People without an iTunes account can also hear those same podcasts, in English and Spanish, on IRS.gov’s site at:

http://www.irs.gov/newsroom/article/0,,id=167993,00.html

IRS Information Now Available in Spanish

The IRS has created a website that addresses a host of important tax topics in Spanish.  Our customers that may be more comfortable reviewing complex tax issues in Spanish can link to the site from here: 

http://www.irs.gov/espanol/

Hablamos español, si se pone en contacto con nosotros a 714.625.1040.  Gracias por su visita!

Notaries &Tax Preparers - Also Doing Foreclosure Work?

Effective July 1, 2009, a new act from the state legislature in California amends various provisions relating to the conduct of Foreclosure Consultants and the requirements for contracts between homeowners and the Foreclosure Consultant and for cancellation of the contract. This act requires Foreclosure Consultants to register with the Attorney General's office and obtain and maintain a surety bond to be filed with the Secretary of State. This bill also creates a crime for the Foreclosure Consultant to receive compensation prior to full performance of the contract.

Student Loan Forgiveness Can Be Exempt From Tax

Forgiven student loan debt will not be taxed if the borrower works in a public service job or teaches in a school in a low income area for 120 months and repaid their loans in a timely manner during that time.  This rule applies to loans originally made by the government or to loans made by private lenders that are later consolidated into federal loans.  Taxpayers beware though - A 1099 will still be issued.  The law requires the lender to issue the 1099 on all debt waivers of over $600.00.  So, a taxpayer that is eligible for the tax exemption will need to be prepared to justify their claim to the IRS.  For more information about the treatment of cancelled debts, see IRS Publication 4681, http://www.irs.gov/pub/irs-pdf/p4681.pdf

State of California IOUs Earning Tax Free Interest

The IRS has ruled that the interest paid on IOUs (Registered Warrants) issued by California (and potentially other states in the future) will be tax free, much like a municipal bond.  The California IOUs have been accepted by some banks.  In this case, the bank will earn the interest.  However, businesses and individuals still holding IOUs will earn 3.75% interest, tax free.  In California, IOUs can be redeemed starting October 2, 2009.  The interest will not be taxable if the IOU is redeemed within one year.  Interest on the IOUs is also California state tax free.

Depreciation and Section 179 Expense for Businesses

Section 179 limits. The maximum section 179 expense deduction you can elect for qualified section 179 property you placed in service in tax years that begin in 2009 remains at $250,000 ($285,000 for qualified enterprise zone property and qualified renewal community property). This limit is reduced by the amount by which the cost of section 179 property placed in service in the tax year exceeds $800,000

Depreciation limits on business vehicles. The total depreciation deduction (including the section 179 expense deduction) you can take for a passenger automobile (that is not a truck or a van) you use in your business and first placed in service in 2009 is $2,960 ($10,960 for automobiles for which the special depreciation allowance applies). The maximum deduction you can take for a truck or van you use in your business and first placed in service in 2009 is $3,060 ($11,060 for trucks or vans for which the special depreciation allowance applies).

      Caution. These limits are reduced if the business use of the vehicle is less than 100%.

Deduction for Sales & Excise Taxes Imposed on Purchase of New Vehicles

This article is also available as a YouTube video and there is additional information on the IRS web site.  Click here:  http://www.irs.gov/newsroom/article/0,,id=204519,00.html In  2009, you can deduct the state or local sales and excise taxes imposed on the purchase of a qualified motor vehicle after February 16, 2009, and before January 1, 2010. A qualified motor vehicle includes a passenger automobile, light truck, or motorcycle, the original use of which begins with that purchaser and that has a gross vehicle weight rating of 8,500 pounds or less.  A qualified motor vehicle also includes a motor home, the original use of which begins with that purchaser.  The amount of tax you are able to deduct is limited to the tax that is imposed on the first $49,500 of the purchase price of the vehicle.  The deduction is phased out over a $10,000 range that begins when modified adjusted gross income is more than $125,000 ($250,000 if married filing a joint return). No deduction is allowed when modified adjusted gross income is equal to or more than $135,000 ($260,000 if married filing a joint return). The new deduction can be used to increase the amount of your standard deduction or you can take it as an itemized deduction (if you are not electing to take the state and local general sales tax deduction).  In other words, If you itemize and elect to deduct sales taxes in lieu of income taxes, you do not get any tax break since you are already claiming the vehicle's sales tax.  If you itemize and deduct state income taxes, you get to add the sales tax you paid on the qualifying vehicle(s).  Therefore make sure you add any vehicle sales tax paid to any state income taxes paid before you compare the total sales taxes paid to the total state income taxes paid + vehicle sales taxes paid, when determining which deduction to take.   The IRS has also recently clarified the purchase of multiple vehicles.  Buyers can deduct the sales tax paid on more than one vehicle!  If you purchase two qualying vehicles for $35,000 each (as an example), you will be able to deduct the sales tax paid on both vehicles.  This is a great year to replace those personal vehicles!

Presidential Tax Returns

Like all other citizens, U.S. presidents enjoy protection of their privacy. Since the early 1970s, however, most presidents have chosen to release their tax returns publicly. In the hope of making this information more widely available, the Tax History Project at Tax Analysts has compiled an archive of presidential tax returns.  Many of you may find this interesting.  Viewing these tax returns also provides an opportunity to review actual, completed returns - which can help many of you in expanding your knowledge of tax preparation.  These tax returns are saved in pdf files.  Please allow up to a few minutes for the files to open (some are quite large).  Click the following link to get started.

http://www.taxhistory.org/www/website.nsf/Web/PresidentialTaxReturns?OpenDocument

 

Notary Newsletter Now Available

The Secretary of State's Notary Newletter is now available.  This is a must read for all existing California notaries.  Do you know there were changes to laws that affected notaries starting in January 2009?  The newsletter recaps these important changes.  This is a quick, easy (and free) way to keep up with what is going on in the notary world.  Link here:  http://www.sos.ca.gov/business/notary/forms/notary-newsletter.pdf  Click here to return or go to our web site.  www.PlatinumProStudies.com