three financial things to do before year end. “opportunities multiply as they are seized.” sun...
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Subcontractors Association of the Metroplex
Three Financial Things to do Before Year End
Three Financial Things to do Before Year End“Opportunities multiply as they are seized.”
Sun Tzu
“Work begats work.”Marcia Gay Harden
“The will to win is important, but the will to prepare is vital.”
Joe Paterno
Consider Tax PlanningIn 2010, the most tax law changes since 1986Overriding Themes
Tax breaks are temporary“User fees” and penalties - not tax increasesInformation gathering
HIRE Act of 2010Payroll tax holiday through 2010 for long
unemployed workersWork Opportunity Credit for unemployed
veterans, disconnected youth and other target groups
Retained worker creditIncreased Sec 179 expensing for fixed assets to
$250,000 for 2010Accelerated estimated tax payments for large
($1 billion assets) corporationsIncreased reporting for foreign financial assets
Small Business Jobs Act of 2010Self-employeds’ health insurance costs for self
and family are deductible for 2010 self-employment taxes
Cell phones are no longer “listed property”
Small Business Jobs Act of 2010Retirement Planning Incentives and Revenue
Raisers Information return penalties increasedFailure to provide statement penalties
increasedSourcing Guarantee incomeNo pre-levy Collection Due Process IRS
hearing required for certain federal contractors
Accelerated 2015 estimated tax payments for large ($1 billion assets) corporations
2010 Tax Relief ActTwo year Sunset Relief
Reduced individual tax rates extended through 2012
Reduced estate and trust tax rates extended through 2012
Withholding and other tax rates remain unchanged through 2012
Increased standard deduction amounts extended through 2012
2010 Tax Relief ActTwo year Sunset Relief
No 3%/80% limitations on itemized deductions through 2012
No phase-out of personal exemptions through 2012
Reduced capital gains and qualified dividends rates extended through 2012
Expanded child tax credit extended through 2012
Expanded earned income tax credit extended through 2012
2010 Tax Relief ActTwo year Sunset Relief
Expanded adoption credit and adoption assistance extended through 2012
Expanded employer-provided childcare tax credit extended through 2012
Expanded dependent care tax credit extended through 2012
Numerous education incentives extended through 2012
2010 Tax Relief ActTwo year Sunset Relief
Increased AMT exemption amounts through 2011
Personal nonrefundable credits may offset AMT and regular tax for through 2011
Repeal of collapsible corporation rules extended through 2012
2010 Tax Relief ActEconomic Stimuli
Bonus depreciation extended/increased through 2011
First year depreciation cap for passenger autos increased by $8,000 through 2012
Choice to forego bonus depreciation and claim credits instead extended through 2011
Increased Sec 179 expensing limit for fixed assets to $125,000 for 2012 (decrease from $500,000 for 2010 and 2011
2010 Tax Relief ActEconomic Stimuli
Reduced employee FICA tax rate by 2% for 2011. Similar reduction for self-employeds for 2011.
2010 Tax Relief ActTax Breaks for Individuals Reinstated
Above-the-line deduction for educator expenses extended through 2011
State and local sales tax deduction extended through 2011
Liberalized qualified conservation contributions extended through 2011
Above-the-line deduction for higher education expenses extended through 2011
2010 Tax Relief ActEnergy and Disaster Relief Provisions
ExtendedNonbusiness energy property credit extended
through 2011Energy efficient new home credit extended
through 2011Biodiesel tax credits extended through 2011Biodiesel mixture excise credits extended
through 2011Biodiesel mixture excise tax refund provisions
extended through 2011
2010 Tax Relief ActEnergy and Disaster Relief Provisions
ExtendedSuspension of income limitations on
percentage depletion for marginal wells extended through 2011
Start-of-construction deadline to receive grants for specified energy property in lieu of tax credits extended through 2011
Alcohol fuels tax credit extended through 2011Reduced credit for ethanol blenders extended
through 2011
Consider Financial ReportingReview debt covenants, coverage ratios, net
capital requirements, liquidity ratios.Financial statements for banks/bonding may
be different than financial info for tax return.Generally, the differences between book and
tax are timing differences.
Consider Protecting PositionsWorker classification
Documentation of relationships and responsibilities
20 factors for determining independent contractor vs. employee
Issue 1099s
Consider Protecting PositionsSales Tax
Avoid nexus in other statesWho is doing what and whereInternet salesOpinion - Before we consider a national sales
tax, we might want to take a hard look at what happens on the state level
Three Financial Things to do Before Year End
Really Easy Questions?OR:OU -14 ATM UT -14.5 TTALA -4.5 LSUOSU -21 KSU