Florida Business Compliance Posters

Every so often we will get a call from a client telling us they have just received a notice in the mail requesting a certain amount of money for posters to be displayed at their location as required by the State of Florida.

These posters can reference discrimination, unemployment compensation, worker’s compensation, minimum wage, child labor law and a host of others.

While it is true Florida  & Federal Labor Laws require these notices to be current and posted, you do NOT and should not pay for these notices.

Simply contacting the agency (and in some cases they can be downloaded from the website) and requesting the poster which applies to you, they will send it to you FREE of charge.

Please check www.floridajobs.org, www.osha.gov, www.dol.gov and type “posters” in your search. These are not all the sites but Iam simply showing you where to get started.

Special Tax Considerations In Bankruptcy

In today’s struggling economy, more individuals and businesses are filing bankruptcy each day than ever before. The saying “you don’t know what you don’t know” is never truer than in the tax considertions in Bankruptcy.

Of course, I can’t go over all the rules/regulations in the space provided. However, let’s cover some basic information.

Failure to file tax returns timely or obtain an extension can cause a bankruptcy petition to be converted to another chapter or dismissed. In chapter 13 cases, the debtor must file all required tax returns for the periods ending within 4 years of the filing of the bankruptcy petition.

Not all debts may be discharged depending on the chapter and the nature of the debt. For discharge of unpaid tax under chapter 7, taxes for which no return was filed, taxes for which a return was filed late after 2 years before the bankruptcy petition was filed, taxes for which a fraudulent return was filed, and taxes that you willfully attempted to evade or defeat are NOT subject to discharge. There can be different rules under chapter 13 as a payment plan.

What happens to a cancellation of debt that the debtor must generally include in income such as a 1099-C? The debtor may not have to report the entire amount of canceled debt as income under a bankruptcy exceptions.

Two very good Internal Revenue Publications are Pub #908 & #334. Also the instructions for Form 982 could aid you in this very difficult area of tax considerations.

 If you are thinking you are filing bankruptcy to discharge taxes due, you may find out too late that you have missed one of the important timing deadlines to include those particular taxes.

Please seek out professional guidance from an Enrolled Agent or a Bankruptcy Tax Attorney experienced with bankruptcy issues prior to filing.

Is IRS Auditing QuickBooks?

The Internal Revenue Service recently acquired 1,200 QB licenses in 2010 and will utilize the program to conduct field audits of taxpayers who use the QB program.

Internal Revenue Service employees completed their training on use of the QB program the last week of September, 2010.

Please be aware that your QB back-up files are required to be produced if requested by an IRS Agent.

Just another reason not to throw caution to the wind if you receive that dreaded IRS notice for any type of inquiry.

Your accounting should be handled by a professional accounting firm.  ALL IRS responses should be handled by an experienced Enrolled Agent.

There are many “behind-the-scenes” events that Taxpayers simply are not aware of which can costs thousands  of dollars in additional tax, interest or penalties if IRS notices are not responded to promptly and accurately.

State of Florida Tax Amnesty

Most State of Florida taxes ie: Corporate Income Tax, State Sales Tax-owed prior to July 1, 2010 (UNLESS you have already entered in to an agreement) will qualify for the State’s amnesty program. You will need to complete an amnesty agreement which can be found on-line at www.myflorida.com  Someone will then contact you to schedule a payment plan. You may qualify for no penalty, 75% of the interest due, 12.5% payment of the amount due and then the balance over 7 months. Interest continues to accrue during the payment plan option.

However, you must continue to be current on all filings and future taxes owed or the agreement can be voided with all penalties and/or interest reinstated.

You can apply anytime between July 1, 2010 – September 30, 2010.

Is Income Related to Gulf Oil Spill taxable?

On June 25, 2010 the Internal Revenue Service provided guidance to those individuals and businesses affected by the oil spill in the Gulf of Mexico. Here is a very brief overview of the current law.

The law requires that a taxpayer include in gross income payments the taxpayer receives for lost business income, lost wages, or lost profits. This income may also be taxable for self-employment tax. However, how the income is structured determines the taxability. Is it made by an employer or by any employer/employee obligation? Be prepared. Know whether or not you will be receiving a 1099 Misc or a W-2 at the end of the year.

Generally, payments the taxpayer receives for property damage or destruction in not included in gross income as long as the payments do not exceed the taxpayer’s adjusted basis in the damaged or destroyed property. Should there be a gain, the tax can be deferred if replacement property is purchased and later sold. If the payments are less (including insurance reimbursements) the taxpayer may have a deductible casualty loss.

However, gross income payments received for personal physical injuries or physical sickness (not emotional distress) is generally not taxable.

Every person has unique financial circumstances. Be sure you understand your tax obligation as it relates to payments from BP.

Should you convert your IRA to a Roth IRA

What’s New? Effective January 1, 2010 conversions from a traditional IRA to a Roth IRA are no longer limited to the taxpayers with a modified adjusted gross income of $100,000 or less. Married couples who file separately can have a conversion as well.

What are the tax consequences of converting? You may owe income taxes on all or a portion of the amount converted depending on whether or not you made deductible or nondeductible contributions from your traditional IRA. However, you may select to include the conversion on your 2010 tax return or split it equally between 2011 and 2012.

What are potential advantages? Distributions from a Roth IRA are tax-free if you are age 591/2 or older and have held the account at least five years. You are not required to take minimum distributions at age 70 1/2. Beneficiaries can receive the assets tax-free.

What are potential disadvantages? Tax bracket now versus tax bracket later. Younger than 59 1/2 could pay a 10% penalty.

Be sure to consult with your Financial Advisor and your Tax Professional as to how a conversion may benefit your personal situation.

Why you should hire a “Licensed” Tax Professional

 

U.S. tax law is an ever-changing set of rules and regulations with varying implications depending on the individual or business tax situation.  Regardless of tax law complexity, YOU as a taxpayer, are ultimately responsible for accurate reporting and payment of your tax obligation.  Things to consider in hiring a tax professional:

• Did you know that only an Enrolled Agent, CPA or Attorney can represent you before the IRS ?  (these are all Federally or State licensed professionals)
• Did you know that an unlicensed tax preparer has little or no regulatory requirements regarding ethics or education?
• Did you know that self-prepared returns through tax software programs or online services do not protect you if there were errors due to incorrect input of information – intentional or not?
• Would you know who to call if you receive ANY type of State or Federal tax notice?

Linda D. Smith is an Enrolled Agent & Licensed Tax Professional

What is an Enrolled Agent?

  

National Association of Enrolled Agents

Enrolled Agents are tax practitioners licensed by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service (IRS).  Like attorneys and certified public accountants (CPAs), EAs are governed by Treasury Circular 230 in their practice before the IRS.       

Education – The requirement for an Enrolled Agent is 30 hours of CPE (continuing professional education) annually.  Linda averages 150 hours of CPE per year.       

Ethics - In accordance with IRS requirements, Enrolled Agents must earn at least 2 hours of CPEs in Ethics during each calendar year.       

Experience - Unlike attorneys and CPAs, who may or may not choose to specialize in taxes, all EAs specialize in taxation and can represent taxpayers from any state.  Linda has over 30 years in taxation study and practice.       

Linda D. Smith is an Enrolled Agent & Licensed Tax Professional