Doeren Mayhew
How Do I? Compute a 'substantial equal periodic payment'
Taxpayers who wish to withdraw funds from a retirement account such as an IRA before they reach the age of 59 and a half, can do so without their distributions becoming subject to the additional 10 percent tax. One option is to have their distributions made in substantially equal periodic payments, as outlined in Sec. 72(t) of the IRC. Taxpayers can use one of three methods to calculate these substantially equal payments:
(1) Required minimum distribution method. Under this method, a taxpayer divides the retirement account's principal by the appropriate number on the IRS's life expectancy table for the year in which distributions will begin. That number depends upon the taxpayer's age. Payment amounts will be predetermined each year by dividing the remaining principal by the number corresponding to the taxpayer's age.
Note: Although this method of computation is much simpler than the second and third, it results in lower annual distributions. The length of time, however, over which the distributions are made is generally greater than for the amortization and annuitization methods.
(2) Fixed amortization method. Under the amortization method, the annual amount of payments is fixed at the time the first payment is made. The amount of the annual distribution is determined by amortizing the taxpayer's account balance using the appropriate reasonable interest rate released by the IRS over a number of years, which equals the life expectancy of the account owner.
(3) Fixed annuitization method. As with the amortization method, all resulting annual payments remain the same for each succeeding year. The amount of the payments is determined by dividing the account principal by the appropriate annuity factor, which is based on the IRS's mortality table and an interest rate of not more than 120% of the federal mid-term rate.
Payments made calculated through the annuitization method are generally the highest. Taxpayers electing to use this method should be aware that higher annual payments will more quickly exhaust their principal.
So long as the distribution payment scheme remains unmodified for a five year period beginning from the first payment date, the distributions will not be subject to the additional 10 percent tax.
Please contact Doeren Mayhew for more information.
If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.
Showing posts with label doeren mayhew. Show all posts
Showing posts with label doeren mayhew. Show all posts
Wednesday, October 19, 2011
Wednesday, October 5, 2011
Doeren Mayhew: October 2011 Compliance Calendar
Doeren Mayhew
October 2011 Compliance Calendar
October 5
Employers. Employers deposit Social Security, Medicare, and withheld income tax for September 28, 29, and 30.
October 7
Employers. Employers deposit Social Security, Medicare, and withheld income tax for October 1, 2, 3, and 4.
October 11
Employees who work for tips. Employees who received $20 or more in tips during September must report them to their employer. Form 4070 may be used.
October 14
Employers. Employers deposit Social Security, Medicare, and withheld income tax for October 6, 7, and 8.
October 17
Individuals. Individuals who received an automatic 6 month extension to file a 2010 calendar year income tax return must file and pay tax, interest, and any penalties due.
Partnerships. Electing large partnerships that received an automatic 6 month extension to file a 2010 calendar year income tax return on Form 1065-B, U.S. Return on Income for Electing Large Partnerships, must file.
Employers. Monthly depositors must deposit Social Security, Medicare, and withheld income tax for September.
October 19
Employers. Employers deposit Social Security, Medicare, and withheld income tax for October 12, 13, and 14.
October 21
Employers. Employers deposit Social Security, Medicare, and withheld income tax for October 15, 16, 17, and 18.
October 26
Employers. Employers deposit Social Security, Medicare, and withheld income tax for October 19, 20, and 21.
October 28
Employers. Employers deposit Social Security, Medicare, and withheld income tax for October 22, 23, 24, and 25.
October 31
Employers. Employers file Form 941 for the third quarter of 2010.
Employers. Employers deposit federal unemployment tax if liability for amounts owed year-to-date through September exceeds $500.
Residents living in a disaster zone should check the IRS list of disaster areas where deadlines have been postponed.
Contact Doeren Mayhew for more information.
If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.
October 2011 Compliance Calendar
October 5
Employers. Employers deposit Social Security, Medicare, and withheld income tax for September 28, 29, and 30.
October 7
Employers. Employers deposit Social Security, Medicare, and withheld income tax for October 1, 2, 3, and 4.
October 11
Employees who work for tips. Employees who received $20 or more in tips during September must report them to their employer. Form 4070 may be used.
October 14
Employers. Employers deposit Social Security, Medicare, and withheld income tax for October 6, 7, and 8.
October 17
Individuals. Individuals who received an automatic 6 month extension to file a 2010 calendar year income tax return must file and pay tax, interest, and any penalties due.
Partnerships. Electing large partnerships that received an automatic 6 month extension to file a 2010 calendar year income tax return on Form 1065-B, U.S. Return on Income for Electing Large Partnerships, must file.
Employers. Monthly depositors must deposit Social Security, Medicare, and withheld income tax for September.
October 19
Employers. Employers deposit Social Security, Medicare, and withheld income tax for October 12, 13, and 14.
October 21
Employers. Employers deposit Social Security, Medicare, and withheld income tax for October 15, 16, 17, and 18.
October 26
Employers. Employers deposit Social Security, Medicare, and withheld income tax for October 19, 20, and 21.
October 28
Employers. Employers deposit Social Security, Medicare, and withheld income tax for October 22, 23, 24, and 25.
October 31
Employers. Employers file Form 941 for the third quarter of 2010.
Employers. Employers deposit federal unemployment tax if liability for amounts owed year-to-date through September exceeds $500.
Residents living in a disaster zone should check the IRS list of disaster areas where deadlines have been postponed.
Contact Doeren Mayhew for more information.
If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.
Wednesday, September 28, 2011
Tax measures large and small await Congressional action
Tax measures large and small await Congressional action
Congress has returned to work after its August recess under a tight deadline to reduce the federal budget deficit and also, possibly, extend some expiring tax incentives. Between now and the end of the year, Congress could enact significant tax reform in a deficit reduction package; or it may take a piecemeal approach. All this Congressional activity contributes to uncertainty in tax planning.
Joint committee's task
On August 2, 2011, President Obama signed the Budget Control Act of 2011 (P.L. 112-25). Along with cutting approximately $1 trillion in federal spending and raising the federal debt ceiling, the Budget Control Act creates a special a bipartisan joint select committee of Congress to propose more deficit reduction measures. The Budget Control Act charges the Joint Select Committee on Deficit Reduction with reducing the federal government budget deficit by at least $1.5 trillion over fiscal years 2012 to 2021. If the joint committee cannot agree on deficit reduction measures, or if Congress rejects the committee's proposals, the Budget Control Act provides for automatic cuts over the coming decade.
The12-member joint committee is composed of an equal number of members from both parties: six Democrats and six Republicans. The joint committee must make its proposals, in legislative language, not later than November 23, 2011 (if a majority of the committee agrees on the proposals). Congress must vote on the proposals not later than December 23, 2011.
Flood of proposals expected
The joint committee is expected to be flooded with proposals to reduce the federal deficit. President Obama has urged the joint committee to take a "balanced approach" to deficit reduction. The president has called for reducing the federal deficit through a combination of spending cuts and revenue raisers. Some of the tax provisions mentioned by President Obama for repeal or reform include tax incentives for oil and gas producers and the last-in, first-out (LIFO) method of accounting. President Obama also wants Congress to extend the two percent payroll tax cut, which is scheduled to expire after 2011.
One of the most contentious proposals the joint committee may address is the fate of the Bush-era tax cuts. The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act (2010 Tax Relief Act) extended the Bush-era tax cuts through the end of 2012. President Obama wants to extend the Bush-era tax cuts for lower and middle income taxpayers but not for higher income taxpayers (which the White House defines as individuals with incomes over $200,000 and families with incomes over $250,000). It is unclear at this time if the joint committee will take up the Bush-era tax cuts.
The joint committee may look to some recent tax reform proposals for guidance. In 2010, the President's National Commission on Fiscal Responsibility and Reform developed a six-part plan to reduce the federal deficit. The commission recommended reducing or eliminating many tax incentives for individuals in exchange for lower individual income tax rates. The commission also endorsed lowering the corporate tax rate to 26 percent. In July 2011, a bipartisan group of senators, known as the "gang of six," introduced a plan for deficit reduction. The senators' plan would, among other provisions, replace the current individual income tax rate schedule with three new tax brackets along with abolishing the alternative minimum tax (AMT).
Expiring tax provisions
A number of popular but temporary tax incentives (known as "tax extenders) are scheduled to expire after 2011. In past years, Congress has routinely extended many of them. This year may be different. The joint committee could include the tax extenders in its work, extending some but allowing others to expire. Alternatively, the joint committee could decide not to touch the tax extenders. In that case, some or all of them could be extended in separate legislation.
Some of the extenders scheduled to expire after 2011 are (not an exhaustive list):
Research tax credit
15-year recovery for qualified leasehold improvements, restaurant property and retail improvements
Work Opportunity Tax Credit
Employer wage credit for activity military reservists
Indian employment credit and accelerated depreciation for business property on Indian reservations
Special expensing rules for film and production costs
Basis adjustment to stock of an S corporation making charitable contributions
Enhanced deduction for charitable contributions of food inventory, corporate charitable contributions of book inventory and corporate charitable contributions of computers
Expensing of environmental remediation costs
Grants for investment in certain energy property in lieu of tax credits
Income tax credit for alcohol fuels
Refined coal production facilities credit
Tax treatment of payments to controlling exempt organizations
Subpart F exceptions for active financing income
Additionally, one hundred percent bonus depreciation is scheduled to expire after 2011 (except for property with a longer production period). Enhanced Code Sec. 179 expensing ($500,000 maximum amount/$2 million investment ceiling) also is scheduled to expire after 2011.
At this time, September 2011, it is not too early to contemplate how tax reform could impact your planning. Please contact Doeren Mayhew and we can schedule a time to review your tax strategy.
If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.
Congress has returned to work after its August recess under a tight deadline to reduce the federal budget deficit and also, possibly, extend some expiring tax incentives. Between now and the end of the year, Congress could enact significant tax reform in a deficit reduction package; or it may take a piecemeal approach. All this Congressional activity contributes to uncertainty in tax planning.
Joint committee's task
On August 2, 2011, President Obama signed the Budget Control Act of 2011 (P.L. 112-25). Along with cutting approximately $1 trillion in federal spending and raising the federal debt ceiling, the Budget Control Act creates a special a bipartisan joint select committee of Congress to propose more deficit reduction measures. The Budget Control Act charges the Joint Select Committee on Deficit Reduction with reducing the federal government budget deficit by at least $1.5 trillion over fiscal years 2012 to 2021. If the joint committee cannot agree on deficit reduction measures, or if Congress rejects the committee's proposals, the Budget Control Act provides for automatic cuts over the coming decade.
The12-member joint committee is composed of an equal number of members from both parties: six Democrats and six Republicans. The joint committee must make its proposals, in legislative language, not later than November 23, 2011 (if a majority of the committee agrees on the proposals). Congress must vote on the proposals not later than December 23, 2011.
Flood of proposals expected
The joint committee is expected to be flooded with proposals to reduce the federal deficit. President Obama has urged the joint committee to take a "balanced approach" to deficit reduction. The president has called for reducing the federal deficit through a combination of spending cuts and revenue raisers. Some of the tax provisions mentioned by President Obama for repeal or reform include tax incentives for oil and gas producers and the last-in, first-out (LIFO) method of accounting. President Obama also wants Congress to extend the two percent payroll tax cut, which is scheduled to expire after 2011.
One of the most contentious proposals the joint committee may address is the fate of the Bush-era tax cuts. The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act (2010 Tax Relief Act) extended the Bush-era tax cuts through the end of 2012. President Obama wants to extend the Bush-era tax cuts for lower and middle income taxpayers but not for higher income taxpayers (which the White House defines as individuals with incomes over $200,000 and families with incomes over $250,000). It is unclear at this time if the joint committee will take up the Bush-era tax cuts.
The joint committee may look to some recent tax reform proposals for guidance. In 2010, the President's National Commission on Fiscal Responsibility and Reform developed a six-part plan to reduce the federal deficit. The commission recommended reducing or eliminating many tax incentives for individuals in exchange for lower individual income tax rates. The commission also endorsed lowering the corporate tax rate to 26 percent. In July 2011, a bipartisan group of senators, known as the "gang of six," introduced a plan for deficit reduction. The senators' plan would, among other provisions, replace the current individual income tax rate schedule with three new tax brackets along with abolishing the alternative minimum tax (AMT).
Expiring tax provisions
A number of popular but temporary tax incentives (known as "tax extenders) are scheduled to expire after 2011. In past years, Congress has routinely extended many of them. This year may be different. The joint committee could include the tax extenders in its work, extending some but allowing others to expire. Alternatively, the joint committee could decide not to touch the tax extenders. In that case, some or all of them could be extended in separate legislation.
Some of the extenders scheduled to expire after 2011 are (not an exhaustive list):
Research tax credit
15-year recovery for qualified leasehold improvements, restaurant property and retail improvements
Work Opportunity Tax Credit
Employer wage credit for activity military reservists
Indian employment credit and accelerated depreciation for business property on Indian reservations
Special expensing rules for film and production costs
Basis adjustment to stock of an S corporation making charitable contributions
Enhanced deduction for charitable contributions of food inventory, corporate charitable contributions of book inventory and corporate charitable contributions of computers
Expensing of environmental remediation costs
Grants for investment in certain energy property in lieu of tax credits
Income tax credit for alcohol fuels
Refined coal production facilities credit
Tax treatment of payments to controlling exempt organizations
Subpart F exceptions for active financing income
Additionally, one hundred percent bonus depreciation is scheduled to expire after 2011 (except for property with a longer production period). Enhanced Code Sec. 179 expensing ($500,000 maximum amount/$2 million investment ceiling) also is scheduled to expire after 2011.
At this time, September 2011, it is not too early to contemplate how tax reform could impact your planning. Please contact Doeren Mayhew and we can schedule a time to review your tax strategy.
If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.
Wednesday, September 14, 2011
Wednesday, July 13, 2011
FAQ: Are summer camp costs deductible?
With school out for the summer, parents are looking for activities for their children. The possibilities include sending a child to day camp or overnight camp. Parents may wonder whether these costs are deductible. At least two possible tax breaks come to mind: the dependent care credit, and the deduction for medical expenses. The most likely tax benefit is the child (or dependent) care credit.
Dependent care credit. To qualify for the dependent care credit, expenses must be employment-related. They must enable the parent to work or to look for employment. The IRS has indicated that the costs of sending a child to overnight camp are not employment-related. However, the costs of sending a child to day camp are treated like day-care costs and will qualify as employment-related expenses (even if the camp features educational activities). At the same time, the costs of sending a child to summer school or to a tutor are not employment-related and cannot be deducted.
In some situations, the IRS requires that expenses be allocated between child care and other, nonqualified services. However, the full cost of day camp generally qualifies for the dependent care credit, without an allocation being required. If the parent works part-time, camp costs may only be claimed for the days worked. However, if the camp requires that the child be enrolled for the entire week, then the full cost is qualified.
Example. Tom works Monday through Wednesday and sends his child to day camp for the entire week. The camp charges $50 per day and children do not have to enroll for an entire week. Tom can only claim $150 in expenses. However, if the camp requires that the child be enrolled for the entire week, Tom can claim $250 in expenses.
Dependent care costs also may be reimbursed by a flexible spending account (FSAs) under an employer-sponsored arrangement. FSAs allow pre-tax dollars to fund the account up to specified maximum. Each FSA may limit what it covers so check with your employer before assuming the day camp or similar child care is on its list of reimbursable expenses.
Medical expenses. The cost of camp generally is not deductible as a medical expense. The cost of providing general care to a healthy child is a nondeductible personal expense.
Example. The child's mother works; the child's father is ill and cannot take care of the child. The cost of sending the child to summer camp is not deductible as a medical expense; however, the costs may still qualify for the dependent care credit.
However, camps specifically run for handicapped children and operated to assist the child may come under the umbrella of medical expenses. The degree of assistance is usually determinative in these situations.
Dependency exemption. In any case, the cost of sending a child to camp can be treated as support, for claiming a dependency exemption. For a parent to claim a dependency exemption, the child cannot provide more than half of its own support. The parent must provide some support but does not necessarily have to provide over half of the child's support. If the child is treated as a qualifying relative (because he or she is too old to be a qualifying child), the parent must still provide over half of the child's support.
The rules on the deductibility of camp costs are somewhat complicated, especially in borderline situations. Please check with Doeren Mayhew if you have any questions.
If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.
Dependent care credit. To qualify for the dependent care credit, expenses must be employment-related. They must enable the parent to work or to look for employment. The IRS has indicated that the costs of sending a child to overnight camp are not employment-related. However, the costs of sending a child to day camp are treated like day-care costs and will qualify as employment-related expenses (even if the camp features educational activities). At the same time, the costs of sending a child to summer school or to a tutor are not employment-related and cannot be deducted.
In some situations, the IRS requires that expenses be allocated between child care and other, nonqualified services. However, the full cost of day camp generally qualifies for the dependent care credit, without an allocation being required. If the parent works part-time, camp costs may only be claimed for the days worked. However, if the camp requires that the child be enrolled for the entire week, then the full cost is qualified.
Example. Tom works Monday through Wednesday and sends his child to day camp for the entire week. The camp charges $50 per day and children do not have to enroll for an entire week. Tom can only claim $150 in expenses. However, if the camp requires that the child be enrolled for the entire week, Tom can claim $250 in expenses.
Dependent care costs also may be reimbursed by a flexible spending account (FSAs) under an employer-sponsored arrangement. FSAs allow pre-tax dollars to fund the account up to specified maximum. Each FSA may limit what it covers so check with your employer before assuming the day camp or similar child care is on its list of reimbursable expenses.
Medical expenses. The cost of camp generally is not deductible as a medical expense. The cost of providing general care to a healthy child is a nondeductible personal expense.
Example. The child's mother works; the child's father is ill and cannot take care of the child. The cost of sending the child to summer camp is not deductible as a medical expense; however, the costs may still qualify for the dependent care credit.
However, camps specifically run for handicapped children and operated to assist the child may come under the umbrella of medical expenses. The degree of assistance is usually determinative in these situations.
Dependency exemption. In any case, the cost of sending a child to camp can be treated as support, for claiming a dependency exemption. For a parent to claim a dependency exemption, the child cannot provide more than half of its own support. The parent must provide some support but does not necessarily have to provide over half of the child's support. If the child is treated as a qualifying relative (because he or she is too old to be a qualifying child), the parent must still provide over half of the child's support.
The rules on the deductibility of camp costs are somewhat complicated, especially in borderline situations. Please check with Doeren Mayhew if you have any questions.
If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.
Wednesday, June 8, 2011
June 2011 tax compliance calendar
As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important tax reporting and filing data for individuals, businesses and other taxpayers for the month of June 2011.
June 3
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates May 28-31.
June 8
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates June 1-3.
June 10
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates June 4-7.
Employees who work for tips. Employees who received $20 or more in tips during May must report them to their employer using Form 4070.
June 15
Individuals. U.S. citizens or resident aliens living and working (or on military duty) outside the United States and Puerto Rico, file Form 1040 for 2010; or file for a four month extension on Form 4868.
Individuals. Second installment of estimate income tax in 2011 is due; make payments with Form 1040-ES.
Corporations. Second installment of estimate income tax in 2011 is due; use worksheet, Form 1120-W.
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates June 8-10.
Monthly depositors. Monthly depositors must deposit employment taxes for payments in May.
June 17
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates June 11-14.
June 22
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates June 15-17.
June 24
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates June 18-21.
June 29
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates June 22-24.
June 30
Investors. Form TD F 90-22.1 (FBAR) is due from owners of accounts containing over $10,000 of financial assets, including cash, in a foreign jurisdiction during 2010.
If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.
June 3
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates May 28-31.
June 8
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates June 1-3.
June 10
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates June 4-7.
Employees who work for tips. Employees who received $20 or more in tips during May must report them to their employer using Form 4070.
June 15
Individuals. U.S. citizens or resident aliens living and working (or on military duty) outside the United States and Puerto Rico, file Form 1040 for 2010; or file for a four month extension on Form 4868.
Individuals. Second installment of estimate income tax in 2011 is due; make payments with Form 1040-ES.
Corporations. Second installment of estimate income tax in 2011 is due; use worksheet, Form 1120-W.
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates June 8-10.
Monthly depositors. Monthly depositors must deposit employment taxes for payments in May.
June 17
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates June 11-14.
June 22
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates June 15-17.
June 24
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates June 18-21.
June 29
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates June 22-24.
June 30
Investors. Form TD F 90-22.1 (FBAR) is due from owners of accounts containing over $10,000 of financial assets, including cash, in a foreign jurisdiction during 2010.
If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.
Wednesday, May 11, 2011
FAQ: What is a limited liability company?
A limited liability company (LLC) is a business entity created under state law. Every state and the District of Columbia have LLC statutes that govern the formation and operation of LLCs.
The main advantage of an LLC is that in general its members are not personally liable for the debts of the business. Members of LLCs enjoy similar protections from personal liability for business obligations as shareholders in a corporation or limited partners in a limited partnership. Unlike the limited partnership form, which requires that there must be at least one general partner who is personally liable for all the debts of the business, no such requirement exists in an LLC.
A second significant advantage is the flexibility of an LLC to choose its federal tax treatment. Under IRS's "check-the-box rules, an LLC can be taxed as a partnership, C corporation or S corporation for federal income tax purposes. A single-member LLC may elect to be disregarded for federal income tax purposes or taxed as an association (corporation).
LLCs are typically used for entrepreneurial enterprises with small numbers of active participants, family and other closely held businesses, real estate investments, joint ventures, and investment partnerships. However, almost any business that is not contemplating an initial public offering (IPO) in the near future might consider using an LLC as its entity of choice.
Deciding to convert an LLC to a corporation later generally has no federal tax consequences. This is rarely the case when converting a corporation to an LLC. Therefore, when in doubt between forming an LLC or a corporation at the time a business in starting up, it is often wise to opt to form an LLC. As always, exceptions apply. Another alternative from the tax side of planning is electing "S Corporation" tax status under the Internal Revenue Code.
If you have questions, please contact your local office: Doeren Mayhew
The main advantage of an LLC is that in general its members are not personally liable for the debts of the business. Members of LLCs enjoy similar protections from personal liability for business obligations as shareholders in a corporation or limited partners in a limited partnership. Unlike the limited partnership form, which requires that there must be at least one general partner who is personally liable for all the debts of the business, no such requirement exists in an LLC.
A second significant advantage is the flexibility of an LLC to choose its federal tax treatment. Under IRS's "check-the-box rules, an LLC can be taxed as a partnership, C corporation or S corporation for federal income tax purposes. A single-member LLC may elect to be disregarded for federal income tax purposes or taxed as an association (corporation).
LLCs are typically used for entrepreneurial enterprises with small numbers of active participants, family and other closely held businesses, real estate investments, joint ventures, and investment partnerships. However, almost any business that is not contemplating an initial public offering (IPO) in the near future might consider using an LLC as its entity of choice.
Deciding to convert an LLC to a corporation later generally has no federal tax consequences. This is rarely the case when converting a corporation to an LLC. Therefore, when in doubt between forming an LLC or a corporation at the time a business in starting up, it is often wise to opt to form an LLC. As always, exceptions apply. Another alternative from the tax side of planning is electing "S Corporation" tax status under the Internal Revenue Code.
If you have questions, please contact your local office: Doeren Mayhew
Tuesday, March 1, 2011
Doeren Mayhew: March 2011 tax compliance calendar
As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important tax reporting and filing data for individuals, businesses and other taxpayers for the month of March 2011.
March 2
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 23-25.
March 4
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 26-March 1.
March 9
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates March 2-4.
March 10
Employees who work for tips. Employees who received $20 or more in tips during February must report them to their employer using Form 4070.
March 11
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates March 5-8.
March 15
Monthly depositors. Monthly depositors must deposit employment taxes for payments in March.
March 16
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates March 9-11.
March 18
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates March 12-15.
March 23
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates March 16-18.
March 25
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates March 19-22.
March 30
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates March 23-25.
If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose. Certified public accountants and consulting firm located in Troy, Michigan. This data is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional advice. |
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