Rimberg Online Bookkeeping

Personal Income tax returns are due April 15th.
Why are so many individuals filing for extensions?

Navigating through todays tax environment takes the experience and expertise of top-notch tax professionals, who can help you, not only comply with increasingly complex regulations, but also help minimize their impact on your business. At Robert Rimberg & Associates, our tax experts have been serving clients in this way for more than 20 years. Constantly changing rules and procedures means having a team who knows you, your business and the tax implications that affect it.

Our seasoned professionals will tailor their approach to meet your specific needs, helping you to manage tax risk, control costs and reap maximum tax benefits. At Robert Rimberg & Associates we look at the ‘big picture’ so that you have the right strategies in place now…and for the future.

State and Local Taxes:
Nearly all business decisions made by companies with multi-state operations have state and local tax consequences. Most companies that answer yes to any of the following questions below need a state and local tax advisor.

• Does your company operate in multiple states?
• Is your company entering into new states or new markets?
• Is your company purchasing assets or an entire business?
• Are the owners looking to sell a portion or all of their business?

With over 5,000 taxing jurisdictions, state and local taxes can become burdensome to even the simplest business organization. Although there are many bedrock principles to state and location taxation (e.g., nexus), most jurisdictions operate under their own set of guiding principles and constantly changing legislative mandates. Consequently, your tax advisor needs to be experienced and knowledgeable about the unique nature of state and local taxation.

Robert Rimberg recognizes the increasing burden of state and local taxes on our clients as most jurisdictions struggle to close budget deficits. Our State and Local Tax (“SALT”) Group specifically addresses the challenges of state and local taxes and can provide assistance with the following:

Nexus studies, which determine those jurisdictions where the company must file tax returns — whether income, franchise, sales and use, or other types of taxes

Net income and franchise tax apportionment issues, such as determining the proper manner in which to source sales, payroll and property to the various taxing jurisdictions

Sales and use taxes, such as providing taxability matrixes of sales and/or purchase transactions

Sales/use tax and property tax compliance and process review and improvement analysis

State income tax credits, such as credits for investing in certain equipment and/or increasing head count

Transactional advisory services, such as advising of the state tax consequences of purchasing or selling a business

Voluntary disclosure agreements, which is a means of settling past state and/or local tax exposures, with the most advantageous terms

Are you sure your tax adviser is providing the “State and Local Taxes” services you need? Can you afford not to be sure?

We’d love to add you to our list, where we send out bookkeeping and tax saving ideas as well as good business building practices. Just click here to sign up today.

Hey everyone, the summer is over and it’s time to redouble our efforts to make our businesses a huge success. I was with a potential client this week who owns a restaurant. He wanted to know if it’s ok to treat the busboys as independent contractors. The short answer- absolutely not!

IRS Summertime Tax Tip 2009-20
If you are a small business owner, whether you hire people as independent contractors or as employees will impact how much taxes you pay and the amount of taxes you withhold from their paychecks. Further, it will affect how much additional cost your business must bear, what documents and information they must provide to you, and what tax documents you must give to them.

Here are the top ten things every business owner should know about hiring people as independent contractors versus hiring them as employees.

1. Three characteristics are used by the IRS to determine the relationship between businesses and workers: Behavioral Control, Financial Control, and the Type of Relationship.

2. Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training or other means.

3. Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker’s job.

4. The Type of Relationship factor relates to how the workers and the business owner perceive their relationship.

5. If you have the right to control or direct not only what is to be done, but also how it is to be done, then your workers are most likely employees.

6. If you can direct or control only the result of the work done – and not the means and methods of accomplishing the result – then your workers are probably independent contractors.

7. Employers who misclassify workers as independent contractors can end up with substantial tax bills. Additionally, they can face penalties for failing to pay employment taxes and for failing to file required tax forms.

8. Workers can avoid higher tax bills and lost benefits if they know their proper status.

9. Both employers and workers can ask the IRS to make a determination on whether a specific individual is an independent contractor or an employee by filing a Form SS-8 – Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding – with the IRS.

10. You can learn more about the critical determination of a worker’s status as an Independent Contractor or Employee at IRS.gov by selecting the Small Business link. Additional resources include IRS Publication 15-A, Employer’s Supplemental Tax Guide, Publication 1779, Independent Contractor or Employee, and Publication 1976.

Do You Qualify for Relief under Section 530? These publications and Form SS-8 are available on the IRS Web site or by calling the IRS at 800-829-3676 (800-TAX-FORM).

We’d love to add you to our list, where we send out bookkeeping and tax saving ideas as well as good business building practices. Just click here to sign up today.

Well then, it’s time to amend your tax return!
We try to prepare your tax returns correctly – the first time! Once in a while, an error occurs. For instance, sometimes a 1099 shows up in September after your return is filed. Here’s what you can do: Avenge with an Amend

In most cases, the IRS automatically corrects mathematical errors or missing forms but if you made a mistake on your filing status, dependents, total income, deductions, or credits – amend! It is also important to amend your return if you are eligible for the new first-time homebuyer credit, which can be up to $8000, for a 2009 home purchase. You don’t have to wait until next year!

So how do you accomplish such an “amendment”? It’s simple! Use form 1040X, the Amended U.S. Individual Tax Return to correct previously filed taxes. Don’t forget to enter the year of the return you are amending at the top of the form! Detailed instructions are available at irs.gov or by calling 800-tax-form. Good luck!

We’d love to add you to our list, where we send out bookkeeping and tax saving ideas as well as good business building practices. Just click here to sign up today.

Do you have a pressing tax issue that you believe is being dealt with unfairly? Well, here is your chance to have your voice heard.

Ever wondered how you could be a part of the democratic process? Help better the tax system by submitting business tax issues to the Industry Resolution (IIR) Program! The IRS is encouraging business taxpayers, associations, and anyone interested to submit controversial issues for resolution. The objective of the IIR program is to resolve business tax issues common to a significant number of taxpayers through new and improved guidance. Submission of such issues is reviewed semi-annually, with the next review on August 31, 2009.
For each issue selected, an IIR team gathers relevant facts from taxpayers with the goal to recommend guidance and resolve the problem. The benefit to taxpayers is a saving of time otherwise spent through examinations.
This is your chance to have a voice in the process! Requests for guidance on tax issues under the IIR program can be submitted at any time to IIR@irs.gov.

We’d love to add you to our list, where we send out bookkeeping and tax saving ideas as well as good business building practices. Just click here to sign up today.

Here are Some Good Reason to Have Us Prepare Your 1040X:

We recently encouraged you to take advantage of incentive benefits from the American Recovery and Reinvest Act such as the first-time home buyer credit or the student learning credit. Now, you may ask, how can I reap these benefits and get the money?

In most cases, you have already filed your taxes for the most recent year, but without waiting until next year you can file an amended income tax return.

All you need is your completed tax return, a blank 1040X Form, the appropriate credit form (i.e. Homebuyer Credit, Hope and Lifetime Learning Credit and your adjusted values.

Make sure you are entering information based on the tax year you are amending. For example, if you are completing the 1040X in September 2009 to amend the taxes you filed in April 2009 (for the 2008 tax year), make sure you enter 2008 information.

Don’t forget to double-check you have all forms necessary pertaining to your specific credit! For more information, check out the IRS website (irs.gov) and good luck!

Don’t forget to call us; as soon as the company is created, there is paperwork that has to be filed immediately.

An economic downturn might be a great time for a start-up company, but that doesn’t mean you can ignore your federal tax responsibilities! According to the IRS, there are a few important things you should know if you plan on opening a new business this year.

What kind of business are you opening? The type of business you begin determines the forms you have to file and what kinds of taxes you will pay.

Do you have an EIN? An Employer Identification Number identifies each business entity. You can apply for one at IRS.gov.

Are you keeping good records? Clear income and expense reports help to ensure a successful business operation.

Do you have a consistent accounting method? You need to follow a set of rules to determine when to report both income and expenses.

For more tips on starting a new business, check out this article and visit the business section of IRS.gov for resources to assist you with starting and operating a new business.

Happy Entrepreneurship!

ARRA Benefits: Act Now!

Have you been taking advantage of the benefits made available from the American Recovery and Reinvestment Act (ARRA) (link: American Recovery and Reinvestment Act)? As a taxpayer, the IRS wants to remind you that while many incentives come from this piece of legislation, most come with expiration dates, so, it is important to act as soon as possible!

Amongst many other benefits, the American Recovery and Reinvest Act provides incentives for first-time homebuyers, new car purchases, more efficient energy, and college tuition. As a reminder, the First-Time Homebuyer Credit allows you to get up to $8,000 in tax returns on a new home if you haven’t owned one within the past three years (AND if you buy one before December 1, 2009).

You can get credit for up to 30 percent of the cost of making energy-efficient improvements on your home, and as part of the American Opportunity Credit, tuition, related fees, books, and other materials for college can be covered up to $2,500 per student!

There are plenty of other credits and incentives to take advantage of as well, but it has to happen this year! For more on the Recovery provisions that may apply to individual taxpayers see the ARRA page of the Internal Revenue Service website.

“Taxes in July? That’s crazy!” While that would  probably be the most common reaction, it’s really never too early to start preparing for tax season and this summer, the IRS is here to help you out early and get the ball rolling.

Starting next month, the Internal Revenue Service will begin publishing three tax tips per week with the hopes of helping people save some time and money come tax season. Topics will range from the importance of checking your withholding to getting proper receipts from charities to protection against identity theft.

And for convenience, you can even receive these tax tips through email by signing up on the IRS e-news subscription page. It doesn’t get easier than this to get a head start on tax season, so check it out!

Did you know that a self-employed business owner filling out a Schedule C with your tax return, you have a much greater chance of being audited than a W2 employee? According to Entrepreneur, the IRS suspects that as a sole-proprietor, you will attempt to either hide income or write off personal expenses as business deductions. When it comes time to select tax returns or audit, they check more self-employed than those who are wage earners!

Seem unfair? Well thanks to  Entrepreneur online, you can protect yourself from the discrimination! Check out 5 Ways to Audit-Proof Your Tax Return, and good luck!

Have you got any audit stories you’d like to share?

Robert