After A Layoff. Carefully Pick What To Cash Out First

Unless you got fired for driving your boss's car into a lake, there's nothing funny about losing your job. And unfortunately, 3.6 million people — more than the population of Chicago — have lost their jobs since the recession began in December 2007.

If you're suddenly unemployed, you have a number of unpleasant choices to make. Can you keep your car? Your house? If so, for how long?........

John Waggoner USA

Support Greg Baker in his Pursuit of a Seat on President Obama’s Stimulus Review Board!

The $787 billion stimulus package has been signed into law. Now President Obama must choose who will monitor how this money is spent. Many people are frustrated with the lack of accountability which was demonstrated by the government regarding the first “bailout package”.

Now Obama has disclosed his vision of a “stimulus review board” which will include professionals from the private sector.

Logicalis is proud to support CFO, Greg Baker, for a seat on this very important committee.The combination of Mr. Baker’s skills and experience with Logicalis’ innovative cost-cutting solutions make him an excellent choice.

How Can You Show Your Support for Greg Baker?By filling out the petition at www.us.logicalis.com/obama, you can voice your support for Mr. Baker’s pursuit of a seat on the Stimulus Review Board.

All petitions will be sent directly to President Obama’s economic advising team.Thank You for the Support!

Follow us on Twitter: logicalisJoin the Logicalis Facebook page

Note: Greg Baker Is the nephew of Milt Baker CPA Editor of CPASense

Client Perceptions

One unfortunate misperception among a certain group of taxpayers is that the return preparer who "gets them" a big refund must be smart, and those who tell them that tax is owed or a smaller refund are below par.

An essential part of the strategy requires client communication. The tax preparer should educate clients about the benefits of lowering withholding and estimated tax by showing them how they overpaid in 2008 and then have them proactively make the choice between a big refund later ( a government free loan) and more cash over the course of this year's economic uncertainty.

American Recovery & Reinvestment Act Of 2009 - Spending Recap

Appropriations Provisions: That the following sums are appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2009, and for other purposes, namely:..........

CaseyResearch.com

Michigan Tax Scofflaws May Be Exposed

LANSING , MI.-- The state is considering a new weapon against tax deadbeats: a public list intended to humiliate -- and motivate -- companies and individuals who are at least $100,000 behind in state taxes.

The "cybershaming" of the worst tax scofflaws by prominently listing their names, addresses and tax debts on a state Web site could embarrass them into paying their debt, advocates believe. The list, if published today, would have 350 names............

The Detroit News

IRS New Withholding Tables Now Available

WASHINGTON ―Feb. 21, 2009 -- The Internal Revenue Service today released new withholding tables that will result in more take-home pay this spring for millions of American workers.

The new tables incorporate the new Making Work Pay credit, one of the key tax provisions included in the American Recovery and Reinvestment Act of 2009 that became law earlier this week.

“For most taxpayers, the additional credit will automatically start showing up in their paychecks this spring,” said IRS Commissioner Doug Shulman. “Since employers and payroll companies will handle this change, people typically won’t need to take any additional action. The IRS will continue working to implement this and other provisions of the new law as quickly as possible........

Internal Revenue Service

Borrowing From A Qualified Plan

In times of economic contraction, retirement plan participants often look to their plan as a source of loans to help them through cash flow difficulties. This is especially so for the many taxpayers that have a large part of their savings tied up in retirement plans. If done properly, such loans can be made without adverse tax consequences, so long as they are repaid in a timely manner. Such loans will not be treated as a taxable distribution from the plan.......

Rubin On Tax

Reasons For Audits

If you are among the thousands of Americans audited every year by the IRS, you might wonder what the specific reasons are for the audit and what alerted the IRS to audit you.

The IRS computer system determines most of the audits. It compares the details on the tax return that you file with the details it already has from the W-2 and 1099 form. These numbers need to match. If not, you will probably receive an IRS notice for audit. This commences the correspondence audit.

Factors including low or no business profit, low gross profit margin, high travel and entertainment deductions, high use of cars in the business, and high car expenses are also looked into by the computer system. The elements might mark you for an audit.

You might be subject to additional investigation based on: ...........

IRS Problem Solver

The Tax Saver's Credit Toolkit

A new resource from AARP—a Retirement Made Simpler partner—has been developed for HR professionals to help employees make the most of the Saver's Credit—a federal income tax credit of up to $1,000. Toolkit materials include intranet content, an e-mail message, materials for open enrollment packets, FAQs and more.

Click on either the Automatic 401(k) or Traditional Defined Contribution Plan Toolkit below to learn more about how you can help eligible employees claim this valuable tax credit.............

Retirement Made Simpler

Taxpayer Appeal Rights: When & How To Appeal IRS Actions

You have the right to appeal any IRS action, determination, decision or ruling.

The method and manner of the appeal varies depending on the nature of the dispute.

IRS Appeals Rights Chart
The following chart shows the various IRS appeals processes and how and when to apply for them............

The Tax Lawyer's Blog

Avoiding A "Nanny" Tax Sting

Your client is considering hiring a nanny to care for his children. With the recent news about cabinet members and tax issues, he wants to know what the rules are.......

Investment News

Michigan Governor's 2010 Executive Budget

Message from the Director, Bob Emerson

As Director of the Office of the State Budget, I would like to invite you to explore and make use of the many areas of our Web site. The State Budget Office is responsible for coordinating all aspects of the state budget including development of the Executive Budget recommendation, presentation of the budget to the Legislature and implementation of the budget after enactment. The Office also supervises and manages the collection and dissemination of educational data through the Center for Educational Performance and Information.

I am committed to providing comprehensive and useful information regarding the state budget and responsibilities of this office. I hope you find what you are looking for within our Web site.

**Governor Granholm's 2010 Executive Budget Addresses Structural Deficit, Protects Families
**Fiscal Year 2010 Executive Budget

Michigan Treasury

IRS E-File: Filing Your Taxes Was Never Easier

Your Electronic Alternatives to Filing Paper Returns

IRS e-file Options For:
Individual Taxpayers File your 2008 Individual Income Tax Return electronically (available through October 15, 2009).

You can file online for free through the Free File program.

Business and Self-Employed Taxpayers Electronic filing and payment options for businesses including employment taxes, information returns, partnerships, corporations, and estates & trusts.

Includes information on the new Modernized e-File (MeF) program for partnership returns, Forms1065/1065-B.

Large and Mid-Size Corporations Certain large and mid-size corporations are required to electronically file their Forms 1120 and 1120-S, while others may do so voluntarily. We've included information for corporations who prepare and transmit their own corporate returns and for those using the services of third-party tax professionals.

Tax Professionals IRS e-file information for tax professionals. Several online e-services products are available including the electronic IRS e-file application.

Includes information on the new Modernized e-File (MeF) program for filing partnership returns electronically.

Charities and Non-Profits Electronic filing options for tax-exempt organizations. New requirements mean large tax-exempt organizations are now required to e-file their returns.

Excise Tax Filers Legislation now requires filers of certain Excise Forms to file their returns electronically.

e-file Software Developers and Transmitters

Internal Revenue Service

New Michigan EITC Highlights Available Tax Relief

For the first time, Michigan taxpayers who claim the Federal Earned Income Tax Credit on their 2008 federal tax return are eligible to claim a Michigan Earned Income Tax Credit for 2008.

"Individuals who qualify for the Federal EITC will be able to claim a Michigan credit equal to 10 percent of their Federal credit," said State Treasurer Robert J. Kleine. "It is estimated that about 20 percent of those who qualify for the Federal EITC fail to claim it, and therefore miss out on tax savings.".......

Michigan Treasury

Michigan Business Taxes E-File 2008

Michigan participates in the MBT Fed/State e-file program for tax year 2008, and will begin accepting MBT e-file returns in January 2009. Filing of tax returns electronically is Secure, Fast, and Convenient. Treasury is committed to processing MBT e-file returns in less than half the time of paper returns, and account resolution for MBT e-file returns receives priority..........

Michigan Treasury

Michigan Individual E-File - 2008

E-file enables you to submit your Michigan and federal individual income tax returns using a computer instead of mailing paper returns. You can even e-file your Michigan return separately from your federal return (State-Only e-file). If you choose to e-file your Michigan tax return alone, be sure to calculate your federal return first before completing and e-filing your Michigan return. You may be able to e-file for FREE............

Michigan Treasury

What to Do If You Are Missing a W-2

Did you get your W-2? These documents are essential to filling out most individual tax returns. You should receive a Form W-2, Wage and Tax Statement, from each of your employers each year.

Employers have until February 2, 2009 to provide or send you a 2008 W-2 earnings statement either electronically or in paper form. If you haven’t received your W-2, follow these steps:

1. Contact your employer. If you have not received your Form W-2, contact your employer to inquire if and when the W-2 was mailed. If it was mailed, it may have been returned to the employer because of an incorrect or incomplete address. After contacting the employer, allow a reasonable amount of time for them to resend or to issue the W-2.

2. Contact the IRS. If you still do not receive your W-2 by February 17th, contact the IRS for assistance at 800-829-1040. When you call, have the following information:

Employer's name, address, city, and state, including zip code;
Your name, address, city and state, including zip code, and Social Security number; and
An estimate of the wages you earned, the federal income tax withheld, and the period you worked for that employer. The estimate should be based on year-to-date information from your final pay stub or leave-and-earnings statement, if possible.

3. File your return. You still must file your tax return on time even if you do not receive your Form W-2. If you have not received your Form W-2 by February 17th, and have completed steps 1 and 2 above, you may use Form 4852, Substitute for Form W-2, Wage and Tax Statement. Attach Form 4852 to the return, estimating income and withholding taxes as accurately as possible. There may be a delay in any refund due while the information is verified.

4. File a Form 1040X. On occasion, you may receive your missing documents at a later date and some may have conflicting information. You may receive a Form W-2 or W-2C (corrected form) after you filed your return using Form 4852, and the information differs from what you reported on your return. If this happens, you must amend your return by filing a Form 1040X, Amended U.S. Individual Income Tax Return.

Form 4852, Form 1040X, and instructions are available on the IRS Web site, IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Links:
Form 4852, Substitute for Form W-2, Wage and Tax Statement (PDF 29K)
Form 1040X, Amended U.S. Individual Income Tax Return (PDF 123K)
Instructions for Form 1040X (PDF 43K)

Internal Revenue Service

Tax Relief For Innocent Spouses - The Basics

When you sign a joint tax return with your spouse you are jointly and severally liable for the tax, penalty and interest shown due on the return and for any assessments arising from a later audit of that return.

In certain clearly defined cases, a spouse can get relief from this joint and several liability...........

Tax Lawyer's Blog

Smart Retirement Savings Steps To Take Now

The recent turmoil in the financial markets has touched virtually every sector of the economy. One great source of anxiety for many people is the state of their retirement savings. Late last year, many saw the value of their retirement nest egg dwindle as stocks and stock mutual fund shares tumbled lower. The market will always be subject to ups and downs, but the Michigan Association of CPAs advises that there are steps you can take to better protect yourself for the future.............

Michigan Association of CPAs

Foreclosures

Foreclosures are treated as the sale of property for tax purposes. Homeowners going through a foreclosure will need to calculate their gain or loss for tax purposes, as well as consider any tax that might be due on the forgiveness or cancellation of debt.......

About.com

Your Rights As A Taxpayer

It may come as a surprise to some that there is a special bill of rights that deals only with the rights of U.S. taxpayers.

In fact, there are 3 of them:

Tax Lawyer's Blog

Tax Benefits For Disabled Taxpayers

There are several tax credits and benefits available to qualifying taxpayers with disabilities as well as to the parents of disabled children. Listed below are several tax credits and other benefits available if you or someone else listed on your federal tax return is disabled..........

Internal Revenue Service

Find A CPA

CPAs Best Choice for Tax Help, AICPA Tells Taxpayers

Washington, D.C.– The American Institute of Certified Public Accountants encourages the more than 81 million taxpayers who hire professional assistance each year to make an appointment now with a CPA tax preparer before their schedules fill up.

“It’s simple: always choose a CPA,” said Tom Ochsenschlager, vice president of taxation for the AICPA. “CPAs are business people in your community who will be there for you, year after year.” Tax season is underway. Most Americans last week received their W-2 forms from employers telling them how much money they earned in 2008, and the April 15 filing deadline is just 10 weeks away. “To be licensed by the states in which they practice, CPAs must pass a rigorous professional exam after they finish their college education,” Ochsenschlager said. “After they are licensed, mandatory continuing professional education requirements make sure that CPAs stay current with regulatory and legal changes. In addition, AICPA members must adhere to strict ethical standards, and additional rules apply to CPAs who are tax practitioners.”

Ochsenschlager pointed out that storefront tax form preparers may be of little help if your return is questioned. “If the IRS raises a question about your return, only CPAs, attorneys and enrolled agents are authorized to represent taxpayers before the IRS,” he said. “CPAs are the best trained and most skilled professionals taxpayers can hire.”

Feel Good About Filing Your Taxes: Donate to Michigan Cancer Funds this Year

For the first-time ever, Michigan residents can show their support in the fight against cancer by contributing to two cancer funds when filing their state income taxes through the Breast and Prostate Cancer Income Tax Check-Offs.

Amanda's Fund for Breast Cancer Prevention and Treatment and the Prostate Cancer Research Fund are two new funds added to the Voluntary Contributions Schedule (Form 4642) associated with the Michigan Income Tax Form. Dollars collected from Amanda's Fund go directly to the Michigan Breast and Cervical Cancer Control Program (BCCCP), which provides free breast and cervical cancer screening services to low-income women in our state.

The MACPA partners with the BCCCP in reaching out to low-income women during our tax assistance programs held at Focus HOPE in Detroit.

Michigan Association of CPAs

Important Reminders For Payers' Backup Withholding Responsibilities

Payers must make sure they meet their withholding responsibilities on payments made to payees who have not provided them with a proper Taxpayer Identification Number. Businesses often make payments to both employees and non-employees (independent contractors). When making payments to non-employees, the Internal Revenue Code generally requires the businesses to report these payments to the Internal Revenue Service. These payments are called “reportable payments” if the payments equal $600 or more during the calendar year...........

Internal Revenue Service

Tax Scams/ Consumer Alerts

Don't fall victim to tax scams. Remember that if it sounds too good to be true, it probably is. If you think you're being scammed, you can report suspected tax fraud activity by sending completed Form 3949-A, Information Referral, to Internal Revenue Service, Fresno, CA 93888. You can download the form or call 1-800-829-3676 to order by mail.

Some of the common scams the IRS sees include:.......

Internal Revenue Service

What Income Is Taxable?

While most income you receive is generally considered taxable, there are some situations when certain types of income are partially taxed or not taxed at all.

Some common examples of items that are not included in your income are:........

Internal Revenue Service

Highlights Of 2008 Tax Law Changes

AMT exemptions rise; several expiring deductions and credits get a new lease on life; a new standard property tax deduction and a special first-time homebuyer credit are available to some homeowners; and retirement savings incentives expand. These are among the changes taxpayers will find when they fill out their 2008 tax returns. More information about these and other changes, summarized below, can be found on IRS.gov and in various IRS documents, including the Instructions for Form 1040..........

Internal Revenue Service

Talking To Your Kids About Tough Economic Times

The nation has been facing uncertain economic times for a while now, a fact that has had an impact on many Americans. That means that many families have had to tighten their budgets and cut back on some of their spending. As this occurs, kids may have a tough time understanding why their parents can no longer afford the toys, electronic gadgets, activities or trips that they want. The Michigan Association of CPAs offers this advice on how to address the economy with your children.........

Michigan Association of CPAs

Smart Retirement Savings Steps To Take Now

The recent turmoil in the financial markets has touched virtually every sector of the economy. One great source of anxiety for many people is the state of their retirement savings. Late last year, many saw the value of their retirement nest egg dwindle as stocks and stock mutual fund shares tumbled lower. The market will always be subject to ups and downs, but the Michigan Association of CPAs advises that there are steps you can take to better protect yourself for the future.........

Michigan Association of CPAs

The 2010 Census - A Great Way To Earn Extra Money

The U.S. Census Bureau is recruiting temporary part-time census takers for the 2010 Census. The pay is good, the hours are flexible, and the work is close to home...........

U.S.Census Bureau

Can Somebody Making $7 An Hour Really Beat A CPA?

That is what H&R Block wants you to believe with their radio and television ads.

Our members are getting annoyed, so we started looking into this a little deeper and found this post from a fellow CPA and his blog over at Virtual CFO.

Turns out he knows exactly what we (and they) are talking about from his own first-hand experience. See his posts titled I Have People ...........

Maryland CPAs (CPA Success)

EITC Eligibility Rules Outlined

The Earned Income Tax Credit (EITC) is a tax credit for people who work but do not earn high incomes. The EITC is a valuable tool helping eligible taxpayers to lower their taxes or to claim a refund. The IRS wants all eligible taxpayers to claim this credit.

Many taxpayers who qualify for EITC may also be eligible for free tax preparation and electronic filing by participating tax professionals and volunteers. Taxpayers and tax professionals should review the rules before attempting to claim the EITC.

Do You Qualify for EITC?..............

Internal Revenue Service

Tips For Finding The Right Tax Accountant

Taxpayers of all types can benefit from hiring a tax accountant. But before you spend your hard-earned cash, here's some simple steps you can take to protect yourself, to find the right professional for your situation, and some questions to ask...........

About.com

Qualifying For A Mortgage In A Tough Economy

Getting a mortgage has become increasingly challenging during recent months. One recent survey showed that 67% of those who applied for a mortgage found it more difficult. Although banks now may have stricter lending rules, it is still possible to qualify for a mortgage, according to the Michigan Association of CPAs. Here are a few steps that may make it easier.........

Michigan Association of CPAs

The "What Ifs" Of An Economic Downturn

The Internal Revenue Service recognizes that many people may be having difficult times financially. There can be a tax impact to events such as job loss, debt forgiveness or tapping a retirement fund. If your income decreased, you may be newly eligible for certain tax credits, such as the Earned Income Tax Credit.

Most importantly, if you believe you may have trouble paying your tax bill contact the IRS immediately. There are steps we can take to help ease the burden. You also should file a tax return even if you are unable to pay so you can avoid additional penalties.

Here are some “What if” scenarios and the possible tax impact:.......

Internal Revenue Service

Client Letter On Tax Changes For Your 2008 Return

Dear Client,

By now you should have received your Forms W2, 1099s, and broker's statements, and you may be getting ready to organize your tax records. Some things have changed for 2008 and I thought you might find some of the following information useful as you prepare to file and look ahead to 2009........

Accounting Web

Michigan Property Tax And Inflation Information

Proposal A, which was approved on a statewide ballot in 1994, set certain property tax changes into the Michigan Constitution. Proposal A limited the yearly property tax increase to be equal to the lesser of the general price level (Inflation Rate Multiplier) or 5%.

How: The equation for the Inflation Rate Multiplier is mandated in MCL 211.34d. Each year Treasury's Tax Analysis Division is required calculate the rate, using the Bureau of Labor Statistics data. The Inflation Rate Multiplier is equal to the ratio of:............................

Michigan Treasury