Inspirational Quotes: Tax & Business Tips

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Credits & Deductions for Higher Education

Credits & Deductions for Higher Education

For those of you who attend college or have children who attend college, you may want to learn more about the higher education tax credits and deductions offered by the IRS.  The following list shows the credits and deductions available for the year 2009 with a brief summary of each. In the coming weeks, more detailed write-ups will follow for each individual item. 

• Hope Credit - not to be confused with the HOPE Scholarship/Grant available to Georgia students. This non-refundable credit is most beneficial to students in their first two years of post-secondary education and applies to tax years through 2008.  
  
• Lifetime Learning Credit - no limit on the number of years the credit can be claimed, but it cannot be claimed in conjunction with the Hope Credit or American Opportunity Credit for the same student in the same year. This credit is often beneficial to graduate students. 
  
• American Opportunity Credit - modifies the Hope Credit for the 2009 & 2010 tax years, making it available to a broader group of taxpayers. Many of those who are eligible will qualify for the maximum credit of $2,500 per student. 
  
• Tuition & Fees Deduction - deductions up to $4,000 can be taken for qualified education expenses paid for the taxpayer, spouse or any dependents. This deduction can be taken even if the taxpayer does not itemize. 
  
• Student Loan Interest Deduction - this deduction is available to taxpayers who paid student loan interest during the tax year. The maximum deduction is $2,500 and it can be taken even if the taxpayer does not itemize.

Ga counties qualifying for Federal Disaster Assistance

Updated 9/28/09 to include Bartow, Catoosa, Coweta, DeKalb, Fulton, Gwinnett, Heard, Newton, Rockdale and Walker counties.

ATLANTA — Victims of recent severe storms and flooding in Georgia may qualify for tax relief from the Internal Revenue Service.

Following severe storms and flooding beginning Sept.18, the President declared Bartow, Carroll, Catoosa, Chattooga, Cherokee, Cobb, Coweta, DeKalb, Douglas, Fulton, Gwinnett, Heard, Newton, Paulding, Rockdale, Stephens and Walker counties federal disaster areas qualifying for individual assistance.

9/21/09 - 15 Year Writeoff for Leasehold Improvements, Restaurant Property, and Retail Improvements Property Bought and Placed in Service This Year

Under Code Sec. 168(e)(3)(E), qualified leasehold improvements, qualified restaurant improvements, and qualified retail improvement property placed in service before January 1, 2010 may be written off over 15 years via straight line. Unless Congress acts, the generally applicable writeoff period for these improvements will revert to 39 years for property placed in service after 2009.

8/24/09 - Monthly Payment Plan With the IRS

If you've fallen behind on your taxes or owe a large amount for the most recent tax year, you may consider setting up an installment agreement. However, you will continue to accrue penalties and interest until the entire balance is paid off.  You will also have to pay a nominal fee for engaging in a payment plan and will be required to fill out various forms. The following is a list of the four types of installment agreements offered by the IRS:
 
Guaranteed Installment Agreements

• Balance Due = $10,000 or less
• You haven't filed late or paid late in the past 5 years
• All tax returns have been filed
• Repayment period is less than 36 months
• You've had no other installment agreement in the past 5 years
• You agree to file on time and pay on time in the future

Streamlined Installment Agreements

• Balance Due = $25,000 or less
• Repayment period is less than 60 months

Partial Payment Agreement

• Payments are based on what you can afford after considering essential living expenses
• May cover a longer repayment period
• Additional paperwork is required

Non-Streamlined Installment Agreements

• Balance Due = $25,000 or more
• You need longer than 5 years to pay the balance
• You do not meet the requirements for the Streamlined or Guaranteed payment plans
• Additional paperwork is required

Please contact our office if you have any questions regarding IRS installment agreements.

8/3/09 - Cash For Clunkers

*According to recent news casts, this program may be suspended in the near future due to lack of funding. 

However, if it continues to run through November 1st as planned, the information below may be helpful if you plan to purchase a new vehicle.

The National Highway Traffic Safety Administration (NHTSA) recently implemented the Car Allowance Rebate System (CARS), also known as "Cash for Clunkers." This program allows consumers to trade in their older, less fuel efficient vehicles for vouchers up to $4,500.  These vouchers help consumers buy new, more fuel efficient vehicles from July 1, 2009 - November 1, 2009.  Some of the provisions of this program are as follows: 

• Individuals, corporations, partnerships and all other legal entities may participate
• An individual or legal entity may only receive one voucher
• The vehicle must be owned and insured by the individual or legal entity for at least one year prior to the trade-in
• In general, the old vehicle must be in drivable condition, have a fuel economy of less than or equal to 18mpg and less than 25 years old
• In general, the new vehicle must be more fuel efficient and cost less than $45,000

 SUMMARY OF VOUCHER QUALIFICATIONS

Description	Min. Fuel  Economy For New Vehicle	$3,500 Voucher	$4,500 Voucher
Passenger Car	22 mpg	Mileage improvement of at least 4 mpg	Mileage improvement of at least 10 mpg
Light-Duty Truck**	18 mpg	Mileage improvement of at least 2 mpg	Mileage improvement of at least 5 mpg
Large Light-Duty Truck***	15 mpg	Mileage improvement of at least 1 mpg or trade-in of a work truck	Mileage improvement of at least 2 mpg
Commercial Truck****		Trade-in must be at least pre-2002
*EPA Combined   **under 6,000 lbs.   ***6,000 lbs. - 8,500 lbs.  ****8,500 lbs - 10,000 lbs.

For more information on this program or to determine if you qualify, please visit the CARS website or contact a local participating automobile dealer.
http://www.fueleconomy.gov/feg/CarsSearchIntro.shtml

7/27/09 - The Power of "One More Minute"

BEFORE you press the "Send" button on your email, BEFORE you deliver that "final" report to your manager, BEFORE you make that important call, and BEFORE you make that presentation, do the following:

STOP - Pause and take ONE MORE MINUTE and run through this checklist:

• Consider having someone else proof the document for you.
• Make sure you've run a grammar and spell-check on the document.
• Give a final "cold read" of the document to ensure you've clearly communicated your intentions.  Consider reading the document to yourself OUT LOUD -- you may be surprised at what errors you'll discover.
• Do I have crystal clear clarity on my key points and have I communicated those key points as clearly as possible?
• Do I really need to send this email?  Would a phone call be better?  Do I need a "cooling off" period before I communicate this matter?
• Am I directing this communication to the right person(s)?
• Did I give this project / task / assignment the attention it truly deserved?

Begin this habit with the VERY NEXT deliverable on your plate and encourage your team mates and colleagues to do the same.

Apply these "one minute" techniques and improve the quality of your output and communications.

Article provided by my son, Andy Robinson

Executive Coach, Career Success Coach and Strategic Thinking Partner
http://careersuccess.typepad.com/my_weblog/

7/13/09 - Temporary Relief for Viable Small Business

As of June 15, 2009 the Small Business Administration (SBA) has a new loan program to help small businesses during these tough economic times.  The American Recovery Capital (ARC) Loan Program can provide up to $35,000 in short-term relief to struggling small businesses.  However, businesses are limited to just one ARC loan and must meet a list of criteria to be eligible.  Some of the eligibility requirements include: 

• Must be a viable, for-profit small business in the U.S.
• Must have qualifying small business loans (credit card obligations, capital leases, notes payable, etc.)
• Proof that the business is experiencing immediate financial hardship (loss of customer base, increased business expenses, reduction in working capital, inability to restructure, etc.)
• Provide financial statements to show business was profitable in one of the past two years

This program is not designed to start-up businesses or for borrowers who already have severely delinquent loans.  However, if you think your business is a good candidate for this program and would like to apply for an ARC loan, please contact our office for further information and assistance.

6/29/09 - What is Employment Practices Liability Insurance (EPLI)?

EPLI covers businesses against claims by workers that their legal rights as employees of the company have been violated.

The number of lawsuits filed by employees against their employers has been rising. While most suits are filed against large corporations, no company is immune to such lawsuits.  Recognizing that smaller companies now need this kind of protection, some insurers provide this coverage as an endorsement to their Business Owners Policy (BOP). An endorsement changes the terms and conditions of the policy.  Other companies offer EPLI as stand-alone coverage.

EPLI provides protection against many kinds of employee lawsuits, including claims of:

• Sexual harassment
• Discrimination
• Wrongful termination
• Breach of employment contract
• Negligent evaluation
• Failure to employ or promote
• Wrongful discipline
• Deprivation of career opportunity
• Wrongful infliction of emotional distress
• Mismanagement of employee benefit plans

The cost of EPLI coverage depends on your type of business, the number of employees you have, and various risk factors such as whether your company has been sued over employment practices in the past.  The policies will reimburse your company against the costs of defending a lawsuit in court and for judgments and settlements. The policy covers legal costs, whether your company wins or loses the suit.  Policies also typically do not pay for punitive damages or civil or criminal fines. Liabilities covered by other insurance policies such as workers compensation are excluded from EPLI policies.

To prevent employee lawsuits and educate your managers and employees so that you minimize problems in the first place:

• Create effective hiring and screening programs to avoid discrimination in hiring.
• Post corporate policies throughout the workplace and place them in employee handbooks so policies are clear to everyone.
• Show employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor. Make sure supervisors know where the company stands on what behaviors are not permissible.
• Document everything that occurs and the steps your company is taking to prevent and solve employee disputes.

Information from the Insurance Information Institute webpage.

6/22/09 - Making Work Pay Tax Credit

The Making Work Pay tax credit is a new credit worth up to $400. This tax credit is temporary and will only be in effect for 2009 and 2010. This credit has already been factored into the withholding tables used to calculate how much tax to deduct from your paycheck.

 

The credit is worth 6.2% of an individual's earned income, with a maximum credit of $400 per person. Married couples who file a joint tax return thus have a maximum credit of $800. 

 

*People working more than two jobs and who expect to earn more than $75,000, as well as people receiving Social Security benefits AND working may need to review their withholding with their accountants to be sure that they do not have too little withholding.