Year End Is Coming!

As 2010 draws to a close and we look forward to the New Year, our minds turn to year-end and the up coming tax season. In just a few short weeks, we’ll be busy working with our clients to complete year end accounting and begin preparation of the tax returns. If you are one of those clients, or someone we hope will become one, there are a few things you can do now to make the tax season easier on yourself.


·        As your tax documents come in, they are almost always marked as containing tax information. Get a basket or a folder, and put all of those documents directly into it as you sort out your mail.

·        Once the organizer arrives, go through it an answer the questions. Doing this up front will save you having to look up information later on.

·        If you sold stocks during the year, be sure you have information on your cost basis for each of them. Many brokerages track this for you, but there may be some stocks they don’t have the information on, and getting that can take some digging.

·        If you are a business owner, use some time in January to complete your bookkeeping, or to get the last of your documents to your accountant for them to finish up.


The earlier you’re ready, and more organized you are, the easier the process of completing your taxes will be. And remember, we’re always here to help!

2010 Tax Extenders Act Passes House – President to Sign

On December 17, 2010, the US House of Representatives passed the 2010 Tax Relief Act on a bi-partisan vote. The law is expected to be signed into law by President Obama in its current form. Not a moment too soon, the Act provides for the following extensions through the end of 2012:


  • Income tax rates will be held at their current level
  • The Child Tax Credit, Earned Income Tax Credit, and American Opportunity tax credit (for higher education) have all been extended

 Other elements of the bill lasting less than two years, among others, are


  • The AMT has been “patched” to prevent it from assessing additional tax on middle income earners. This is effective for the 2010 and 2011 tax years.
  • The $250.00 deduction for classroom expenses of elementary and secondary school teachers is extended for the 2010 and 2011 years.
  • A 2% reduction in payroll taxes for employee and self-employed individuals for 2011 only.
    • This means the amount of taxes withheld from an employees paycheck will decrease 2%, effectively resulting in a 2% raise in pay.
    • Self-employed tax payers will pay 2% less in self-employment taxes.
  • Expanded section 179 expensing for businesses was extended through the end of 2011, allowing businesses to deduct up to $500,000 of new asset costs in the first year.
  • Beginning with 2012, the act provides for 50% bonus depreciation in the first year of an asset’s use, in lieu of the expanded 179 expensing.


Additional changes were made surrounding the estate tax, and a number of other areas. Conspicuously absent was the provision to repeal the new 1099 reporting requirements.

Want more detail on how the changes will affect you or your business? Feel free to contact us!

IRS Releases 2011 Mileage Rates

            The IRS recently released the standard mileage rates for business mileage, as well as mileage driven to obtain medical treatment during 2011. The business rate will be $.51, while the medical mileage rate will be $.19. Both of these are increased over 2010.

            This release is a great reminder to be sure to track your mileage during the year for business, medical, and charitable purposes. The recommended way to do this is through a mileage log, as the IRS has been placing more importance on the documentation of mileage during audits.