Accredited Tax Advisors, Enrolled Agents, CPA's in North Alabama

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If you would like to gain access to our Secure Client Portal you may register here. We will then set up a secure repository just for you. As a valued client, you get a secure, password-protected portal to store and access your important financial documents from anywhere at any time. Whether you're at work, at home, or on vacation, you always have access to your tax returns, financial work papers, or accounting database. This portal also allows us to work together efficiently by securely exchanging working documents, scanned receipts, and very large QuickBooks files.

IRS Increases Mileage Rate to 55.5 Cents per Mile - The increase in the optional standard mileage rates applies to the final six months of 2011. The rate will increase to 55.5 cents a mile for all business miles driven from July 1, 2011, through Dec. 31, 2011. This is an increase of 4.5 cents from the 51 cent rate in effect for the first six months of 2011. The new six-month rate for computing deductible medical or moving expenses will also increase by 4.5 cents to 23.5 cents a mile, up from 19 cents for the first six months of 2011. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

IMPORTANT TAX TIP: Video on "Auto Expenses" (36 seconds in length)

Mileage Rate Changes

Purpose	Rates 1/1 through 6/30/11	Rates 7/1 through 12/31/11
Business	51	55.5
Medical/Moving	19	23.5
Charitable	14	14

Income Tax Return Filing - The Internal Revenue Service recently released statistics that show a 6.9% increase in self-prepared tax returns by individuals from their home computers, while returns prepared by paid preparers decreased by (3.4%). At the same time the IRS revealed a (5.3%) decrease in the number of refunds issued. I'll be the first to admit that conclusions drawn from statistical analysis can be misguided at times, however, I believe there is a direct correlation here that should not be over-looked. 1,379,000 more people filed their own tax returns in 2010 over 2009 and 3,263,000 fewer refunds were issued. No wonder the IRS is advertising "Free e-File Online"!

I find this trend disturbing. The decline in taxpayers using the service of paid preparers, I believe, can be linked to an increased perception by the public that "I know the tax laws as well and can do as well as this preparer". It's sad but true in many cases. Because the tax filing season is limited to basically ten weeks, preparing tax returns lends itself to the temporary job market, part-time and seasonal workers. Until recently there was no legislation governing persons that called themselves tax return preparers. If you wanted to cut hair for the public you had to take a test and obtain a license, no such requirement existed for persons that wanted to open a business to engage in the preparation of tax returns for a fee.

We now have legislation that will be phased-in over the next three years. In the future, if you want to prepare tax returns for a fee, you will have to take a minimal competency exam to become a Registered Tax Return Preparer (RTRP). Will this benefit the public as intended? At least it is a step in the right direction where some action was long overdue.

Note: If you file your tax return from your home computer, ensure that you print a paper copy of your filing and retain it with your tax records.

 

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Tax Questions?
If you feel like you may have over-paid your taxes in the past, contact us for a free initial consultation or review of your taxes.

Workers' Compensation - We are seeing cases where the insurers are attempting to force businesses (not in the construction industry) to pay WC insurance on independent contractors! This is beyond the point of ridiculous. In one case, they were attempting to force an automobile dealer to pay workers comp on a small unincorporated body shop owner, simply because the dealer issued a form 1099 to that person.

The automobile dealer asked me, "if that body shop owner gets injured at his shop on his own property, a work place over which I have no control (in fact I've never been to his place of business), do you think the insurer would pay a claim?" I honestly do not know because I've never witnessed such an event, but I highly doubt it.

In the end, not only did the client not pay for Workers Comp coverage on the independent contractor, he also dropped the WC insurance altogether resulting in more than $30,000 annual savings to his company. Our involvement with Workers' Compensation rules and regulations is generally limited to representing clients in Workers' Compensation Audits. If you would like to discuss our representing your firm, please give me a call at 256-586-4111.