cpasense

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Location: Westland, Michigan, United States

Graduate of Walsh Institute Of Accountancy (Now Walsh College) Michigan in 1959. Retired in 1987, but still active in the profession **World War II Veteran (Pacific) **PHONE 734-261-1979 **E-MAIL -cpabakem01@yahoo.com **(Domain Name CPASENSE Registered) **Mentioned in the Journal of Accountancy, SmartPros, Tax Prof Blog, CPA2BIZ, CPA Journal, AccountingWEB, CPATrendlines & More **Search Accounting Blogs: http://www.blognetnews.com/accounting (Includes cpasense)**TOPICS - FINANCE - FEDERAL & MICHIGAN TAXES ** Making Sense Of Your Finance & Taxes

Sunday, December 31, 2006

HAPPY NEW YEAR EVERYBODY !

Who Pays Income Taxes? See Who Pays What

For Tax Year 2004

National Taxpayers Union (NTU)

IRS Tax Refund Finder

A public service of the National Taxpayers Union
Does the IRS Have an Unclaimed Check Waiting for You?

Friday, December 29, 2006

CCH Report: IRS Issues Further Guidance On Telephone Excise Tax Refunds

IRS pronouncement:

http://www.irs.gov/pub/irs-drop/n-07-11.pdf

CCH
Internal Revenue Service

Thursday, December 28, 2006

IRS Begins Implementing Extenders Legislation

Filing season to begin on time. IRS provides information regarding state and local sales tax deduction, higher education tuition and fees deduction and educator expense adjustment to income.

Interal Revenue Service

Start Off The Year Right: Review Your Asset Allocation

One of the best ways to maximize the long-term performance of your investment portfolio is through proper asset allocation. The term asset allocation refers to how you divide your investments among the three key asset classes – stocks, bonds, and cash-equivalents. In other words, it means not putting all your eggs in one basket....-MORE-

Michigan Association of CPAs

Sunday, December 24, 2006

HAPPY HOLIDAYS TO ALL

Saturday, December 23, 2006

IRS: New Guidelines For Payroll Deduction Contributions To Charities

The Internal Revenue Service has announced new guidelines for taxpayers to follow to substantiate donations to charities that were made by payroll deductions.
"This makes it easier for businesses and individuals to support worthwhile charities without fear of losing the deduction," said IRS Commissioner Mark W. Everson.

New Passport Regulations Go Into Effect On Januay 23, 2007

U.S. Citizens will need a valid passport to re-enter the U.S. after a visit to Canada, Mexico, South America, Central America, Bermuda or the Caribbean. In the past, proof of citizenship (such as a birth certificate) was sufficient identification to return from a visit to these counties. The U.S. Department of State expects a tremendous surge in passport applications as this deadline approaches. A new U.S. passport costs $97 and is valid for 10 years from the date of issue. If you have never been issued a U.S. Passport, you must apply IN PERSON at a passport office or at select U.S. post offices. More information about passports can be found by visiting the U.S. Department of State web site.

Michigan Association of CPAs

Friday, December 22, 2006

Christmas Wish Movie

A beutiful Song and tribute to our troops

Mary & Craig Reynolds

8 Steps For Estate Planning

Fortune Magazines's Ellen McGirt published an interesting summary article on CNNMoney.com, entitled Revisit your estate plan - You may think you're prepared, but dividing up your assets upon your death is only the first step in protecting yourself and your family.

"Most people need some sort of will; everyone needs a living will and health-care power of attorney, which direct caregivers should you become unable to make decisions for yourself. Working through those issues can be difficult, but having your estate paperwork based on outdated thinking can be disastrous."

She lists the following eight steps for estate planning:
1. Rebalance your 401(k)
2. Revisit your estate plan
3. Sock it away
4. Give smarter
5. Review your health plan
6. Clean up your taxable account
7. Do a property insurance checkup
8. Check the new credits and taxes

Wednesday, December 20, 2006

How The Gift Tax Affects Large Gifts?

Does the holiday spirit inspire your generosity? Are you thinking about making a large gift to your children or grandchildren? Before you do so, make sure you understand the tax consequences of your actions. To help you make the most of your gifts and understand your tax liability and that of your recipients, the Michigan Association of CPAs provides answers to some frequently-asked questions....-MORE-

How Much Income Can You Earn Before You Have To Report?

The simple answer is zero. There is no lower limit. The law requires you to report all your income, no matter how small. For example, you start a sole proprietorship during the year, but you get off to a slow start generating only $100 in gross receipts and $90 in expenses. The law requires you to file a Schedule C reporting the income and expenses. Bought a $1 lottery ticket and won $10? You have to report the $10; you can deduct the $1 on Schedule A. There's a lower limit of $10 for reporting and filing 1099s for dividend and interest income and $600 for reporting miscellaneous income you pay, but those are information reporting requirements. Even if you don't receive a 1099 from the bank because the interest you received was only $2, you're still obligated to report the income.

Small Business Taxes & Management

Friday, December 15, 2006

Year-End Tax Planning For Individuals, Business

You still have some time left if you want to do some serious year-end tax planning. We'll deal with your personal return first, then cover business planning. If you have your own business please read both sections before taking any action.

Small Business Taxes & Management

Thursday, December 14, 2006

Recent Tax Law Changes May Affect People Giving To Charity

IRS Offers Tips for Year-End Donations

Individuals and businesses making contributions to charity should keep in mind several important tax law changes made last summer by the Pension Protection Act.

Internal Revenue Service

IRS Forms Problem: Tax Relief Act Provisions

In a letter to Senator Max Baucus (D-Montana) - Incoming Chair of the Senate Finance Committee, the IRS said:

* The IRS doesn't plan to reprint the 2006 forms and instructions, so the packages that go out to taxpayers in late December and early January will not include updated information with the new tax deductions.
* The IRS will put out a specific publication highlighting the tax changes for 2006.
* The IRS needs to reprogram their computer - a task that it expects to take six weeks - and then it has to be tested. All this reworking will cause a logjam
* The IRS willl not be able to start processing on time next year which will delay refunds for early filers.

Michigan Tax Information For Tax Year 2006

*Personal exemption allowance is $3,300
*Tax rate is 3.9%
*Special exemption allowance is $2,100
*Pension deductions are $40,920 for single and $81,840 for joint filers
*Dividends, interest, and capital gains deductions for senior citizens are $9,128 for single and $18,255 for joint filers

Michigan Treasury

Michigan Income Tax Filing Requirements

What are the State of Michigan income tax filing requirements? What forms do we use? When should they be filed?

Michigan Treasury

IRS: Who Must File?

Whether you have to file a tax return depends, in part, on your filing status, age, and gross income.

Internal Revenue Service

Mutual Fund Investors: Don't Buy A Tax Liability

While putting money away in mutual funds for long-term savings is a good idea, this time of year you should look before you invest. The tax law requires mutual funds to distribute thier accumulated dividends from their portfolio, and their accumulated capital gains, annually. Many do so in December. If you're not careful, you could get a year's worth of tax liability on your 1099 for the privilege of owning fund shares for as little as one day.

Visit your favorite mutual fund's website and to find their tax dividend plans for December before you send them your money; you might be a lot happier next April if you wait a few days before making your next investment

Roth & Company CPAs

Wednesday, December 13, 2006

CCH Report: Tax Relief And Health Care Act Of 2006

The Act extends a number of tax provisions that expired at the end of 2005 (such as the deduction for state and local sales taxes, the tuition deduction, the research credit, etc.) as well as some new provisions including one that liberalizes the treatement of Health Savings Accounts.

Selected Provisions: http://www.smbiz.com/sbspec152.html

For the complete technical explanation, go to www.house.gov/jct/x-50-06.pdf.

Monday, December 11, 2006

Business Gift Giving: What's Deductible And What's Not?

During the holiday season, many business owners give gifts to customers to thank them for their business. In turn, the Internal Revenue Service (IRS) offers business owners a deduction for the cost of the gifts. But before you go shopping, check your list twice because there are strict limitations on how much you can deduct, reports the Michigan Association of CPAs....-MORE-

Give The Gift Of Education And Receive A Michigan Income Tax Deduction

Purchase a MET contract before December 31

Michigan Treasury

Friday, December 08, 2006

Suspicious E-Mails & Identity Theft

The Internal Revenue Service has issued several recent consumer warnings on the fraudulent use of the IRS name or logo by scamsters trying to gain access to consumers’ financial information in order to steal their identity and assets. When identity theft takes place over the Internet, it is called phishing.

Thursday, December 07, 2006

This Is The Magic Of Christmas.

The Spirit of the season. Enjoy the MOVIE

Mary & Craig Reynolds

How To Stay Out Of Debt This Holiday Season

For many, overspending has become an unwelcome holiday tradition. Holiday debt looms long after gifts have been unwrapped and the toys have been tossed aside. The Michigan Association of CPAs says it’s possible to avoid holiday over-spending, but only if you plan ahead. Here are some strategies you should consider....-MORE-

Tuesday, December 05, 2006

Governor Granholm's Michigan Business Tax (MBT) Plan

November 29, 2006 - Governor Jennifer M. Granholm today unveiled details of the Michigan Business Tax (MBT), her new plan to replace the out-going Single Business Tax (SBT), making the state's business climate more competitive and ensuring that funding will be available for critical programs including public education, health care, and public safety. The plan is built on the principles Granholm has outlined this year: a tax that is revenue neutral with a low rate and broad base that doesn't tax payroll or health care.

MI Newswire

Sunday, December 03, 2006

Tax Law Changes - Businesses 2006-2007

Internal Revenue Service

Tax Law Changes - Individuals 2006-2007

Internal Revenue Service

Friday, December 01, 2006

Offer-In-Compromise Defaults

If you manage to secure an offer-in-compromise from the IRS enabling you to settle your outstanding liability for less than the full amount, you should be particularly careful not to default on the agreement. In addition to making all required payments on the offer, you're also agreeing to remain in compliance in the filing and payment of all required taxes for a period of five years, or until the offered amount is paid in full, whichever is longer. Failure to meet these two requirements will result in an automatic default and the IRS can:

* File suit to collect an amount equal to the original liability less any payments already received,
reinstate the entire unpaid balance of the offer,
* File a Notice of Federal Tax Lien on any tax liabilities without liens,
disregard the amount of the offer and apply all amounts already paid against the original amount of the tax liability, or
* File suit or levy to collect the original amount of the tax liability, without further notice of any kind.

Small Business Taxes And Management
http://www.smbiz.com

Statute Of Limitations If You Don't File Valid Return

In most cases, there's a three-year statute of limitations for tax purposes. However, if you don't file a return, the general rule is that the statute never begins to run. In Roger Hattman (2006-2 USTC 50,536; U.S. Court of Appeals, 3rd Circuit) the taxpayer filed a Form 1040 that contained zeroes on every line.

The Court, affirming an unreported Tax Court decision, held that the Form was not a valid return and, thus, did not start the statute of limitations running. In order to be a valid return, the form must be executed under penalty of perjury and represent an honest and genuine or reasonable attempt to satisfy the requirements of the tax law.

Small Business Taxes And Management
http://www.smbiz.com