WHY pay $40 for the software and spend hours in frustration to do your own tax return, then have to pay extra to electronically file WHEN you can have the return professionally prepared at minimal cost. As a general rule, if you have wages, some interest income, and have mortgage interest and property taxes, your return will cost around $120. That is a LOT less costly than the cash outlay and added frustration of doing your own return. Give us a call to discuss your options.
To answer all of the telephone questions, Yes, we will repair those improperly prepared returns; Yes, we do ALL of the business returns; Yes, we prepare tax returns for Estates and Trusts; Yes, we prepare Non-Profit (Exempt) Organization returns; and Yes, we provide consulting for ALL business and individual taxpayers. And we do all of these at very reasonable prices. Give us a call. Unlike many, WE honor OUR quoted prices.
Moving away from Portland? Yes, we can continue doing your work through the email and snail mail systems. Ask us how we will be able to provide that service.
The extension of the Bush era tax cuts will expire December 31, 2012. Through 2012 employee's social security taxes are seeing a reduction of those taxes withheld by 2% of the gross income. For self employed individuals paying self employment taxes, the social security portion is reduced from 12.4% to 10.4%
Did you get married or divorced in the current tax year? Your marital status on your tax return is determined on December 31. If you got married on or before that date, you file a "married filing joint" or "married filing separate" return. If you got divorced in the current tax year and the divorce was final by December 31, then you file as a "single" person. If you have others living in your household, then you may be able to file "head of household". If you had any marital status changes, give us a call to help you determine the correct marital status. This information is necessary to calculate the proper withholding amounts for wages, unemployment or other special types of income.
If your mortgage debt is partly or entirely forgiven during tax years 2007 – 2012, you may be able to claim special tax relief and exclude the debt forgiveness income. Ask us how.
Oregon's minimum wage for 2012 is $8.80 per hour, up from $8.50 in 2011.
Getting close to eligibility for Medicare? Even if you do not intend to draw social security benefits, you should call Medicare at 800-772-1213 three months before your 65th birthday to discuss your options. Other answers can be found at http://www.medicare.gov.
Want to take Social Security and keep working before full retirement age? For 2012, you can receive total annual wages (earned income) of $14,640 without reducing your SS Benefit. Your social security benefit will be reduced $1.00 for each $3.00 of earned income above the $14,640 threshold. If you reach full retirement age during 2012, you can earn up to $38,880 for the year up to your birth month. Beginning with your birth month, there is no earnings limit.
Have you ever wondered what the report is that you receive from the Social Security Administration (SSA) every year about three months before your birthday? The information in that report indicates what the SSA has recorded as your earned income during the stated year. If that number is incorrect, it could affect social security benefits including retirement and disability. If that number is incorrect, it needs to be corrected with SSA within two years of the date that you receive the report. If you fail to act, after three years from the applicable tax year, the amount cannot be corrected. The result is that any future benefits will be less than what they should be, and cannot be changed.
For businesses that have employees, there may be a requirement to pay the payroll taxes more frequently than quarterly. For those meeting the requirements, the only method for making these payments will be through the IRS EFTPS. You can sign up by calling 1-800-555-4477 or through the website at www.eftps.gov.
Employees, did you know that you should be having withholding taxes removed from your payroll and be issued a form W-2 at the end of the year IF your employer provides the work space, work tools necessary for the job, and tells you when you are required to be at work? Many are being given Form 1099 which requires YOU to pay the payroll taxes the employer should be paying.
Did you know that if your Federal tax owed on your tax return is more than $1,000 you might have to pay a penalty? The way to avoid that is by paying in at least what your total Federal tax liability was for the prior year. This is accomplished by paying in 25% of that amount in four installments (estimated tax payments). But many find themselves owing a large amount at those times. Another solution is to pay an amount monthly that will be enough to cover your projected total Federal tax so that you do not have such a large liability when the return is due. This procedure can also be applied to the filing of your Oregon income tax.
If you are in the trade or business, and receive more than $10,000 in cash in one or a series of related transactions, then you are to file Form 8300 with the IRS within 15 days of the transaction. Most would think that this will not apply. But the definition of "cash" and "related transactions" is broader than you might think. Cash includes cash, cashier's checks, money orders, traveler's checks, and money orders unless excluded in Publ 1544. Related transactions can be one transaction, or a series that might be related to the same transaction like monthly rents, purchases of product or supplies, and other transactions that can be tied together. The rule seems to be 'when in doubt, report'. Give us a call to discuss in more detail.
Do you have concerns about your accounting controls and management decisions? Are you looking for someone to provide accounting oversight while using your own bookkeeping staff? We can help. Just give us a call at 503-723-4223 to discuss.
Exempt Organizations - those with less than $25,000 of gross receipts MUST file (used to be exempt from filing) by May 15th. Those organizations with more than $25,000 have always had to file. FAILURE TO FILE FOR THREE YEARS WILL CAUSE YOUR EXEMPTION TO BE LOST. The IRS has released a list of those organizations who have lost their exemption. You can find those organizations at the IRS website. We have downloaded that list for the Oregon organizations, and have that information available to you if you want us to check for you.
The 2012 mileage rates are 55.5 cents per mile for business, 23 cents for medical or moving, and 14 cents for charitable.
The Small Business Health Care Credit is a credit implemented by Congressional passage on March 23, 2010 of the Patient Protection and Affordable Care Act.
The maximum credit is 25% for tax exempt organizations or 35% for other organizations with ten or fewer qualified FTE employees with average annual wages of $25,000 or less per qualified employee.
A qualified employee is one for whom the employer is paying at least 50% of that employees health insurance premiums.
There is a phase out of the credit for organizations with more than ten FTE employees but less than 25 FTE employees, or whose average annual wages are more than $25,000 but less than $50,000.
Call us to discuss the details of the credit computation if you think that you might qualify.
Oregon Property Tax Exemption
If you are a disabled war veteran or the surviving spouse of a war veteran, you may be entitled to exempt $17,911 or $21,493 of your homestead property's assessed value from property taxes. The exemption amount increases by 3 percent each year. The exemption is first applied to your home and then to your taxable personal property. If you are an Oregon resident and a qualifying veteran or that veteran's surviving spouse and live in your home, you may file a claim and receive the exemption.
If a person dies and has a gross estate greater than five million dollars, then a Federal Form 706 has to be filed. If the gross estate is less than five million dollars and over one million dollars, and the deceased is an Oregon resident, then the Oregon Inheritance Tax return (Estate Transfer Tax effective 1/1/12) is required to be filed. For Washington State, the threshold is over two million dollrs. Gross estate includes any asset in the decedent's name plus assets under control by the decedent at the time of his/her death.
Did you know that upon death any assets held in only the name of the decedent must go through a probate process which turns the property over to the court system for final outcome. The ways to avoid probate cost are (1) to have joint ownership of the property, (2) beneficiary designations, or (3) have all property owned by a revocable living trust.
Reasons to avoid probate include (1) costs of probate can be great, (2) probate process is available to the public, (3) court system controls who those assets are transferred to.
Going through the probate process puts creditors on a time limit for collecting or arranging collection on those estate liabilities. When going through this process, the probate court uses the will in determining the decedent's wishes for their asset disposition. If there is no will, the state law determines that disposition.
For Veteran benefits see:
http://www.military.com/benefits/veteran-benefits/oregon-state-veterans-benefits
Please call or email Brian Bilby or Dave Bilby Sr (OBTP #2454) today to get YOUR questions answered.
Brian@bilbytax.com or dave@bilbytax.com
503-723-4223 (voice) or 503-723-4331 (fax)