Stimulus Payment Delivery

Taxpayers by now have received their letter from the IRS stating that they will receive a check in the late spring early summer, taxpayers who file their return by April 15th, can now track when their stimulus payment will be deposited (for E-filers) or mailed (for paper returns) with IR-2008-44. Be sure to heck out the charts for the payment schedules to track when your payment will arrive.

Keeping Your Business N Synergy

The Good and Bad Stimulations

Since the passing of the stimulus package by Congress, I am sure many tax advisors have been receiving a great deal of questions about filing returns and getting the rebate check. One such question that came up in our Tax Tips Seminars last week was regarding the E-filing a stimulus return when there is no adjusted gross income.

The Good

According to Revenue Procedure 2008-21, the IRS will NOT challenge returns that claim at least $1 in adjusted gross income for e-filing.

And Now the Bad

An earlier post touched on the amount it would cost to send you a letter that tells you your stimulus check is in the mail (about $42 million). Well now the IRS reports that it will loose around $681 million answering phone calls regarding the rebate checks. Also expect a lower level of service when you call the IRS asking questions. Hmmmm.

Keeping Your Business N Synergy

Your First Four Years

Small business owners in need of information regarding the first fours years of start-up will really enjoy the new study by the Kauffman Foundation. The study provides a sample of about 5,000 small businesses and details the operations and demographics of the businesses since their 2004 start date.

This is great information for a small business owner to compare your business against especially in the areas of growth strategy, innovation, and survival. Hope you enjoy the information.

Keeping Your Business N Synergy

The Cost of Stimulation

The IRS will begin mailing out letters to about 130 million taxpayers this month. The cost to mail out these letters that simply notify taxpayers that they will receive a check in May is $42 million. I wonder who is paying for these letters to be mailed. It seems there may be other ways these funds could be used.

So what to do with your rebate check? The best bet is to invest it and not spend it. The stimulus bill also includes some tax breaks for small businesses. One of the more important breaks for small businesses is the double section 179 expensing limit for 2008 (allowing a write-off of up $250K) for equipment purchases. Be sure to speak to your tax advisor on the benefits of this change and remember tax planning is done year-round…tax time is too late.

Keeping Your Business N Synergy

I Got That Receipt ….Somewhere!?!?

The IRS has provided us taxpayers with some important information regarding preparing returns with questionable deductions. If a taxpayer can not locate all their receipts to justify a deduction on their return, the tax preparer may be in their best interest to not add the deduction.

The IRS used to penalize preparers $250 for a tax return containing questionable deductions; now the penalty is $1,000, or 50 percent of their fees, whichever is greater.

Be sure to have ALL your receipts to justify your tax deductions for the rules are definitely changing. Most professional tax preparers go through a formal checklist once a return is completed. For more information check IRS Notice 2008-13.

Keeping Your Business N Synergy