Accounting News and Notes

Atlanta CPA on Tax Answers You Can Use: Not More Data That Needs Interpreting 

Having served as a Metro Atlanta CPA for twenty eight plus years, I still see clients/taxpayers seeking specific guidance that is specifically tailored to them and their needs rather than a “pat/standard program” geared towards the needs of the CPA. Recently I received an inquiry from a client seeking guidance and direction, of which is detailed below: 

Please contact me with so I can send you detailed explanation of our needs, which includes 2008 Corporate Tax Returns for a very small business, making sure we were up to date on 2008 & 2009 Federal & State monthly/quarterly requirements, 2008 K1, & 2008 Personal Return. Since there was very little business, it’s not very much work, just printing correct forms, etc…  Please advise next steps and/or your email.  Thanks. 

Though many taxpayers come prepared with their own answer for me to supply them, it is necessary for the CPA to be a quick study and to address their individual needs both accurately and succinctly. To this end I prepared the below response:

 To help all of our clients I have on our website at http://www.hiscpa.com/newclient.html  a detailed checklist for you to use to pull your information together to prepare your year-end returns. Rather than supplying you with a thirty page “tax organizer” that will leave you exhausted, I have tailored one that reflects all the important nuances of tax return preparation in just a few pages. Though your tax data may appear simple, and indeed if your business is small, we work with you to make sure that you both pay your lowest legal possible tax and by adding efficiencies to the process to keep your CPA fee as low as possible.  

We work with many taxpayers to help them get current on their taxes and to address their tax needs by your keep it simple style, our attention to detail, and out technical competency. Although we promise ten day turnaround on all of our work, your actual results will typically be just a fraction of that period.  

Please note to help clients keep their administrative issues to a minimum, we recommend all of our clients utilize the service of a payroll service, for which I would be happy to refer. Payroll and its attending administrative issues, payments, withholdings, forms and varying due dates are a “mine field” that you can avoid by delegating that responsibility to a payroll service, who can do it cheaper than either yourself or a CPA.  

Please note when your corporate income tax returns are completed that a K-1 is issued to all shareholders reflecting their prorated portion of the company’s earnings that are to be reflected on an individual shareholders personal return. Thus it is imperative that we complete your corporate return first.  

We are committed to living out the “Golden Rule” of treating our clients as our friends and giving the best service possible. Our goal of Serving Him as We Serve You, will help you receive the very best advice we can provide. I would welcome meeting to get started and I have time openings later this week and please note: our initial thirty minute consultation is free.

Contact HIS CPA PC (A Christian CPA Firm) today.

To learn more about addressing IRS Tax Issues and Back Tax Returns visit http://www.hiscpa.com/working-with-the-irs.html  

John Dillard is an Christian Speaker/Author and Certified Public Accountant in Duluth, GA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!    

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Duluth GA CPA Teaches Checklist to Process Your Year-End Corporate and Personal Returns 

To assist clients/taxpayers with their year-end returns I provide clients with a checklist that they can use. To make this available 24 hours a day/7 days a week they are always available at http://www.hiscpa.com/newclient.html   However as none of my clients are CPA’s most clients need a bit of help in ensuring that they have all of the information needed. Below is a sample of the items of what I might send to a taxpayer who is married but opting to file Married Separately. Most always it is better/resulting in a lower overall tax bill and professional fees for all married taxpayers to file Married Jointly. Tax law states that a taxpayers marital status as of the end of the year/December 31st is the determining factor when determining filing status. Thus, for example if you were single all year and then married on December 31st, then tax law would require you to file Married Jointly. Conversely if you were married all year and then divorced on December 31st, you would not file a married return for that year. Below is a typical checklist that might be used to ensure that all data needed to prepare a return are received: 

For your Returns Please get to me: 

-Tax law ways business clothes cannot be corporately unless they are uniforms and are not suitable for other use. Please advise.

-For the $8500 in Operating Expenses I need to know the categories so that I might record accordingly.

-We will set your business as a cash basis taxpayer, thus revenue and expense are only taxable/deductible as received/paid. Please confirm the report you forwarded is cash based.

-Please forward a copy of the actual issued stock certificate as I need to record it for the return.
 -Copies of the year-end W-2’s the company issues along with the W-3.

-Please confirm if you or your wife are to claim the children.

-Please be reminded that as you are itemizing that you wife should also.

-Please advise if the business miles are added to your Business recap you provided.

-If we are going to deduct mileage then the other auto expenses should be paid personally. I recommend all of my clients use mileage as most always it is the larger payroll deduction

-Please advise if there are any cash contributions to charity.

-Please provide to me the thrift store value/flea market value of items donated to charitable organizations/501(c) such Goodwill Industries, Atlanta Union Mission, for Vietnam Veterans.

-Please confirm if/that you had no corporate business activity for 2007.

ASAP after I get the above I will finish the returns and get them out your way.

John Dillard, CPA of His CPA, PC, 1940 Woods River Lane, Duluth, GA 30097  Phone 770-814-9304   http://www.hiscpa.com/    http://www.john-dillard.com/ 

Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Final Deadline for 2009 Corporate Income Tax Returns is September 15. 2009

Wow, another year is getting closer to the end and school is back in again. Although the original due date for Corporate income tax returns is March 15th, a properly filed extension allows a corporate taxpayer to file their return by September 15. 2009. The IRS allows corporations to file for an automatic six-month extension, Form 7004. Keep in mind that an extension to file is not an extension to pay and that both the IRS and the state/Georgia expect you to pay your taxes as you earn the monies. Please be reminded there are no valid extensions after the September 15th and the final corporate return due date lapses. To process your corporate return, please ensure that you have your balance sheet and your profit and loss and copies of any W-2’s the corporation might have issued. If you have not yet done so, please be reminded that 1099’s should be issued by the end of January; your payroll service will handle this if you get them the information. Before you send the current year’s financial please be sure to always review the prior year’s balance sheet on the tax return and ensure that your internal books equals the return while being sure to make any appropriate adjustments. That way you will be assured of starting the year off with a clean set of records which will otherwise distort you current year’s operating results.

HIS CPA – Checklist for Year-End Taxes: • Your year to date Balance sheet, Profit & loss • Year end Bank Statements and Bank reconciliations • Aged Accounts Receivable • Year-end Inventory • Aged Accounts Payable • Year to Date Payroll Records by Employee • Notes Receivable and Payable Balances at Year end • Copies of new Notes • The amount of medical insurance paid for each shareholder • If your company is new, please forward copies of the incorporation papers.

Before you send your Year-End Financial please be sure that: • The general ledger balance agrees to your checkbook and your bank reconciliation. • The Accounts Receivable balance agrees to your internal aging reports. • The Accounts Payable balance agrees to your internal aging reports. • You advise of any fixed assets that have been acquired or disposed of during the year. • That ALL of the balance sheet and profit and loss accounts are correct. • That you have only one retained earnings account. • That as of January 1st of the prior year that you closed the shareholder distributions account to retained earnings. • That the retained earnings account on your internal books equals or is reconcilable to the retained earnings to the last corporate tax return filed.

Confirm that you are aware are handling all of your payroll and independent contractor/1099 needs, of the need to have a business license, to pay the annual registration fee, to have your annual Board of Directors and Shareholders Meeting, and to file the county property tax report (please be sure to claim the Freeport Exemption on your inventory if you qualify as this can substantially reduce the amount owed). Please note that if you have not yet set up a retirement plan or have a formal financial plan, that I suggest that we sit down together soon to get the right plans in place to help ensure your long-term financial success! It is widely suggested that you formally tax plan at least twice annually. Please be reminded that the mileage rate for 2008 is 50.5 cents per mile for 1/1/08-6/30/08, and 58.5 cents per mile from 7/1/08 to 12/31/08. For 2009, the mileage rate is 55 cents per mile. Please turn in an expense report monthly to get reimbursed for these and any other business expenses you might have paid personally. IRS tax rules require you to have a day by day log to support business miles. Please be reminded that extending the filing of a return does not delay the need to pay as you go as both the IRS & GA will bill you for penalties and interest if you do not pay your taxes during the tax year to which they relate. Allow 10 days for me/your CPA to complete your returns after I get all of the information needed.

John Dillard is an Christian Speaker/Author and Certified Public Accountant. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

 We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock, Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Atlanta CPA Amends Income Tax Returns Saving Tens of Thousands

Proudly Serving Lilburn, Alpharetta, Lawrenceville and Snellville for Decades

Often taxpayers feel after they have filed an income tax return that they are etched in stone. Though you want this to be the case as no one likes to tax returns twice, frequently having a CPA critique your past returns, especially if you are a business owner and had returns filed by someone who is not a CPA, is often a great way to “find unclaimed money.” In reviewing past business/corporate as well as personal income tax returns we  have amended returns to reflect:

-Changing to an S Corporation saving approximately $20,000 on one set of returns and $12,000 on another.

-Tax deductions ranging from thousands of dollars of missed tax deductions such as business mileage.

-Thousands of dollars of missed itemized deductions such as cash and property contributions to charity, state income taxes and real estate taxes.

-Failure to claim Head of Household status, which is a lower tax bracket than filing single. Amended return saved tax dollars as well as then being able to claim additional tax credits.

-Numerous instances where we have filed amended personal income tax returns to claim Earned Income Credit, which is a credit allowed for those who have a dependent and make less than certain qualifying income levels. Amended return saved thousands of tax dollars.

These are just a few of the examples of where a CPA can evaluate past returns to “find money” that you have overpaid to the IRS or Georgia for prior year income taxes. Amended returns come in all shares and sizes:

-If you are an S Corporation you file a new Form 1120S, while marking the amended box on the first page of the return.

-If you are a single member LLC, you should be filing the business results as part of your personal return the business information on a schedule C. Therefore, like individual taxpayers you will file a Form 1040X to the IRS and Form 500X to the state of Georgia.

-Also when reviewing prior tax returns, one can look for deductions, strategic and operational issues that one can use to mitigate future tax bills and to improve overall company profitability.

Tax law only allows for returns to be amended for three years after their initial filing date. Thus, it is essential to ensure that all returns that you have any questions about whatsoever should have them evaluated by a competent and experienced CPA who is well versed in IRS tax law and representation issues. Unfortunately if you have not amended your return after three years, tax law does not allow you to receive a refund of any type or to even apply any refund application to any other outstanding monies due either the IRS or that state of Georgia.

John Dillard, CPA of His CPA, PC, 1940 Woods River Lane,   Phone 770-814-9304   http://www.hiscpa.com/    http://www.john-dillard.com/

Dare to Attempt Something so Great for the that it is doomed to failure, lest Christ be in it!

 John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and to learn about his ministry visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304 proudly serving Duluth, GA, Gwinnett County and Beyond.

Serving Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Gwinnett County, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, and Beyond

Both of the New Stimulus Bills Passed by Congress Bode Well for Companies

Using Tax Credits for You and Your Business

The Stimulus Bill passed late last year and the recent Economic Stimulus Plan contains several Tax Credits and Incentives for all businesses. With this down economy it’s now the ideal time to help your company’s profit improve by accessing the many benefits including:

• Small Business Expensing: A write-off of up to $250,000 of capital equipment is available.
• Expanded NOL Carry Back: It is now 5 years for businesses with less than $15 million in average gross receipts.
• AMT Patch: The exemption is increased from $46,200 to $46,700 for single filers and from $69,950 to $70,950 for joint filers and surviving spouses.
• S Corporation Reduction: If a business converts from a C Corporation to an S Corporation in 2009 or 2010, the S Corporation must hold its assets for only seven years, down from ten years, in order to avoid a tax on any built-in gains that existed at the time of conversion.
• Delayed Recognition of CODI: The Certain Cancellation of Debt Income will be allowed over 10 years (Check with your CPA on details).
• Estimated Tax Payment Relief: Individuals operating small businesses may be permitted to make lower quarterly estimated tax payments to the IRS in 2009.
• New Employee Tax Credit: The Work Opportunity Tax Credit is expanded to include unemployed veterans and disconnected youth. This now makes a total of eleven different groups of new hires that are eligible for this credit. This credit ranges from $2400 to $8500 per qualified new hire.
• Research & Development Tax Credit: Eligible expenses have increased from 10% to 14%. Most Printers, since they are classified as manufacturers, qualify for this credit, which is both a State and Federal credit.
• Federal Location Tax Credits: Businesses that are located in certain Federal location areas and have employees that live in that area can be eligible to receive tax credits from $1500 to $3000 per employee per year. The Bill extended this credit through 2011.

Each State offers Tax Credits, Grants, and other Incentives for qualified activities by business, while the Federal government offers over 25 different incentives. These programs, enacted into law, can help sustain your business and increase your profit.

Written By Terry McMillian of McMillian & Associates, Inc. LaGrange, Georgia. Contact Rick Linden at 678-468-1955

Corporate & Personal Income Tax Preparation and Reviewing of Prior Filed Returns

One of the unique things you can do as a taxpayer is to continually tax an active stance in growing in knowledge about your own tax situation. To this end, however I do not recommend that as an entrepreneur that you go back to school and get a degree in accounting or to become a CPA. You task as a business owner is daunting enough in the daily and strategic planning of your business. However, I do believe that periodically getting a second opinion for a CPA will do much to help ensure that you are on track. In fact, over the years, I have had several clients do this in an effort to learn what they can, while discovering that everything that legally could be done to keep their taxes as low as legally possible were already done. However, frequently a fresh face on the scene will do much to enlighten a taxpayer or business owner to learn of other valid options that are available to legally lower their taxes.

Examples of items a new CPA might discover include:

-The discovery of tax deductions that you previously missed.

-That you do not have the right retirement plan set up for your business to maximize qualified pension plan deductions for both you and your employers.

-That your present choice of entity selection is not the best suited to your business for both operational and tax issues. An LLC,  LLP, Partnership, C Corporation, S Corporation and Proprietorship all have substantive tax, operational and taxing nuances that are dramatically different. Knowing that your present choice remains the best is critical to sound financial management.

-That your own preparation of your internal financials is providing you with the data and information you need to make sound operational and management decisions.

These are just a few of the important and critical decisions that impact your taxes and business dramatically. Having a check-up or a consultation with a CPA who is independent of your business will do much to ensure your remain financially on track. Having served as a CPA for almost thirty years I have seen service levels of professionals at varying levels. Ensuring that you are receiving sound prudent professional services will save you money and headaches in both the short and long term.

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta  CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and to learn about his ministry visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304 proudly serving Duluth, GA, Gwinnett County and Beyond.

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!”

What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31

Why are these verses here? Learn how HIS CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Business Acquisitions/Sales,  Forensic Accounting, Business Valuations and Bookkeeping.

Understanding the Differences Between Active & Passive Losses.

It’s time to take another look at the rules for rental properties for your deduction and a few of the tax rules to ensure that you qualify. Generally since the mid to early 80’s the IRS has limited what one can deduct for rental properties based upon your level of participation.

Generally, the least stringent of the qualification rules is under the active participation standard. To qualify a taxpayer needs to participate in making management decisions such as qualifying new tenants, deciding rental terms and the approval of required expenditures while acting in a bona fide and significant sense. If you qualify under this standard then your real estate losses are generally ruled to be passive and to limited to a maximum of $25,000. Also to meet this requirement taxpayers (counting a spouses interests) are required to own at least 10% of the equity/ownership percentage in a given property. The $25,000 maximum is phased out starting at $100,000 of adjusted gross income and is totally phased out after adjusted gross income exceeds $150,000.

Certain real estate professionals, who qualify, can treat real estate activities as non-passive and therefore not subject to the above limitation. To qualify a taxpayer, or their spouse, must spend more than one-half of their personal services actively in the furtherance and performance and provide material participation in real estate activities. Also the taxpayer, or their spouse, must perform more than 750 hours of service during the tax year in the real estate activity in which they actively participate. Generally this exception is applied on a property by property basis, however a taxpayer may elect to this standard to all interests as a single activity for purposes of satisfying the material participation standards and requirements.

Carefully evaluate how you are treating your real estate properties and ensure that you are correctly applying these standards against your properties and to treat the deductions for them accordingly.

John Dillard is a Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta  CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304.

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!”

What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31

Why are these verses here? Learn how HIS CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Atlanta CPA Advises on Completing the Election by a Small Business Corporation and Form 2553

Beginning with the 2009 filing season for 2008 S Corporation Income Tax Returns, the IRS has just made the process easier for those who inadvertently the election late. For years the S Corporation Election, or Form 2553, was to be file within seventy five days of the first day or beginning of the tax year to which a electing corporation desires to make it effective. For example, if you are a brand new corporation who just incorporated on June 1, 2008, then you would have seventy five days from 6-1-08 to make the election. Similarly if you were a corporation that had been a C Corporation for years and would like to be an S Corporation for the 2008 tax year, then under the old rules you would have had to made the election by March 15th or seventy-five days after 1-1-08.

Starting 1-1-08, if you qualify, corporations who neglect to have satisfied the old 75 day requirement can still do so if they qualify. To be an S Corporation you have to:

-Have only Resident Aliens or U.S. citizens as shareholders.

-Generally have a calendar year-end.

-Have less than one hundred shareholders.

-Have one class of stock.

Under the new rules a company desiring to be a S Corporation can elect to do so with the filing of their Corporate Return, Form 1120S, as long as:

-They attach a properly Form 2553, Election by a Small Business Election including the effective date of the election, signed approval of all of the company’s shareholders.

-They attach a reasonable cause for the late election.

-Form 1120S is filed either by the original due date or plus the automatic six month extension, if timely elected.

-None of the shareholders have filed their personal returns showing reflecting that the company is not an S Corporation.

Please note that similar relief is available for an entity eligible electing to be treated as a corporation, such as an LLC converting from a partnership to a corporation for tax purposes.

Generally speaking the IRS will respond to S Election request within sixty days of their original filing. For those not receiving their acceptance on a timely basis you can call the IRS at 800.829.4933. If a company fails to meet the new relaxed filing requirements for S Corporation status, they can still request a Private Letter Ruling and pay a user fee.

John Dillard is a Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta  CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304.

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!”

What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31

Why are these verses here? Learn how HIS CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

U.S. Income Tax Returns for an S Corporation Presented by Atlanta CPA

Understanding the many variables of the correct preparation of a Form 1120S, the year-end income tax return for an S Corporation, is essential to properly managing your business affairs and practices. The tax law for S Corporations originated in some forty years ago and is a federal law allowing business owners to report their income on Form 1120S but to pay the taxes on these monies on their individual return Therefore there is no tax due when the Form 1120S is filed.

As S Corporation owners are going to be taxed on a shareholder’s personal return, care should be exercise at least twice annually to be sure that taxes owed are paid as they are earned or accrued. Rather than having S Corporation owners also make estimated taxes, it is easier and less administrative burdensome to have sufficient withholding done from an S Corporation owner’s paycheck to cover their estimated current year tax liabilities. Also withholding taxes are deemed statutorily to have been made evenly throughout the year which may preclude the potential assessment and liability of unequal earnings and or payments on a quarterly basis.

As a S Corporation does not pay any income tax and its tax issues flow down to a shareholders personal return, “tax preference” items are communicated to each shareholder based upon their respective ownership percentages. Tax preference items are those which are to be reported independently on a shareholders Personal Form 1040. More common examples of these include interest income, ordinary and qualified dividends, capital gains and losses, Section 179 depreciation and charitable contributions. Also communicated to the shareholders include their respective shareholder distributions and non-deductible expenses.

In order to companies to be qualified as an S Corporation they have to have less than 100 shareholders, have a calendar year-end, owners are to be U.S. citizens or resident shareholders and one class of stock. For the first year a corporation is electing S Corporation status it is required to submit, within 75 days of the beginning of the tax year, a Form 2533, which is a Election by a Small Business Election. If you fail to make this election on a timely basis you may still be able to qualify using Rev. Proc. 2003-43. Once a corporation becomes an S Corporation it will remain so for the life of the company unless any one of the rules of being an S Corporation are violated or by consent by more than 50% of the voting and non-voting stock of the company.

John Dillard is a Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta  CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304.

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!”

What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31

Why are these verses here? Learn how HIS CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Atlanta CPA Teaches Understanding Georgia S Corporation Returns

If you own your own business and have set up as an S Corporation you are certainly surprised by many of the nuances of Form 1120S for the IRS and Form 600S for the state of Georgia. Like its federal counterpart Form 1120S, the Georgia Form, the 600S, the return is due by March 15th of each year or by the fifteenth of the third month, after the end of the company’s fiscal year-end. Also, as S Corporations are a “flow through” entity the profits or losses of the business show up on a individual shareholder’s personal return. Thus, there are no income taxes paid with either the filing of the IRS’s Form 1120S or Georgia’s Form 600S. However there is a net worth tax which is assessed and paid on the Georgia Form 600S based upon a company’s net book value, which is essentially the combined total of their retained earnings accounts. Returns are filed to the Georgia Department of Revenue.

As part of the Federal 2008 Economic Stimulus package passed Section 179 Depreciation (what taxpayers can write-off in full for fixed asset purchases) was increased to $250,000. As with past years this limit applies both at the corporate and individual shareholder level. The Georgia limit for Section 179 Depreciation, with the passing of the state’s Small Business and Work Opportunity Act of 2007, was increased to $128,000. Thus Georgia Corporations when making the full deduction at the federal level on Form 1120S must make an adjustment to the Form 600S. A complete copy of the federal return should be attached to the Georgia Return prior to filing. If the Georgia Form 600S is amended at the corporate level, there is no separate return and prepares should check the appropriate box on the form to indicate an amended return is being filed. If for any reason a federal return is adjusted, amended or changed due to an audit the corresponding Georgia Return should be amended as well within 180 days of any IRS change. Amendments to Georgia are reported on Form 500X. If any Georgia Corporation does business or owns property within the state then Form 600S and the Allocation and Apportionment of Income schedules should be completed.

If the Georgia Return or Form 600S needs to be extended it can be by filing a Form 7004 with the Internal Revenue Service that Georgia accepts as having been sufficient notice to them. If you are going to owe any taxes with the Georgia Return you will want to pay them via Georgia Form IT 560C by the original due date of the return as otherwise penalties and interest will be assessed on late payment. Keep in mind at all times, that an extension to file, is not an extension to pay.

In general terms the tax imposed and assessed by the state of Georgia is based upon the portion of business income that is reasonably attributable to Georgia sources, property owned and business done in the state. For tax years beginning January 1, 2008 or later the allocation is calculated by using the 100% gross receipts factor.

If you have a non-resident shareholder (an individual owner of the S Corporation who does not reside in Georgia), they are required to attach a consent agreement acknowledging their responsibility to file a individual or personal Georgia Return, a Form 500, to report and apportion their income to Georgia as well as other states where they file individually.

John Dillard is a Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta  CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304.

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!”

What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31

Why are these verses here? Learn how HIS CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.