As we near the due date for individual income tax returns, extensions become a necessary tool for those clients who may still be waiting on information, or who just haven't gotten around to visiting us yet!
Many clients have questions about the implications of extending their returns. One misconception is that extending the return extends your time to pay your tax. The reality is an extension simply gives you an extra four months to file the return, but taxes are due by April 15, whether your return is filed or not. Anything you owe will incur additional interest after April 15th.
For more information on extensions, we have made available a brochure that can answer common questions.
Thursday, April 07, 2005
Wednesday, March 02, 2005
Sales Tax Rises April 1
Sales Tax Rate Hike Information
Go dig up that manual for your cash register - you'll need to reprogram it on April 1st, when the sales tax rate in Cowlitz County increases by .1%. As a result, sales tax inside Kelso and Longview will be 7.7%, and 7.6% in the rest of the county.
Interestingly enough, the Department of Revenue's flyer linked above states mistakenly that the increase was approved in the November 2004 elections. In fact, it was imposed by the Cowlitz County Board of Commissioners.
The Commissioners yesterday began a push for consideration of ANOTHER sales tax increase, this one up to .2%. The proceeds would be used for criminal justice, and the citizens would have to approve it at election time. I'm not sure if drawing more money out of the pockets of our already financially-depressed citizens is the answer to anything, but the commissioners seem determined to at least try.
As a side note, have you ever heard anyone propose a decrease in sales tax??
Go dig up that manual for your cash register - you'll need to reprogram it on April 1st, when the sales tax rate in Cowlitz County increases by .1%. As a result, sales tax inside Kelso and Longview will be 7.7%, and 7.6% in the rest of the county.
Interestingly enough, the Department of Revenue's flyer linked above states mistakenly that the increase was approved in the November 2004 elections. In fact, it was imposed by the Cowlitz County Board of Commissioners.
The Commissioners yesterday began a push for consideration of ANOTHER sales tax increase, this one up to .2%. The proceeds would be used for criminal justice, and the citizens would have to approve it at election time. I'm not sure if drawing more money out of the pockets of our already financially-depressed citizens is the answer to anything, but the commissioners seem determined to at least try.
As a side note, have you ever heard anyone propose a decrease in sales tax??
Tuesday, February 22, 2005
How Long Do I Have To Keep This?
Record Retention Schedule
If you're in business, you know that space costs money. As a result, businesses often try to eliminate as much historical paperwork as possible to more effectively use their office or storage space. When working on a project like this, our clients usually want guidance on what to keep, and for how long.
We've developed a record retention schedule that gives suggestions on how long to keep various documents. Essentially, you need to keep things as long as they may be relevant to taxing or regulatory authorities, and certain other items just need to be kept indefinitely. For instance, if you're considering selling your business, the seller might want to see an in-depth financial history of many years. Some payroll records need to be kept indefinitely as well.
The retention schedule is available in our Forms area. If you have a question on an unlisted item, please feel free to drop us a line or add a comment here.
If you're in business, you know that space costs money. As a result, businesses often try to eliminate as much historical paperwork as possible to more effectively use their office or storage space. When working on a project like this, our clients usually want guidance on what to keep, and for how long.
We've developed a record retention schedule that gives suggestions on how long to keep various documents. Essentially, you need to keep things as long as they may be relevant to taxing or regulatory authorities, and certain other items just need to be kept indefinitely. For instance, if you're considering selling your business, the seller might want to see an in-depth financial history of many years. Some payroll records need to be kept indefinitely as well.
The retention schedule is available in our Forms area. If you have a question on an unlisted item, please feel free to drop us a line or add a comment here.
Tuesday, February 15, 2005
Reduce Junk Mail and Identity Theft
We all know about the rash of identity theft that has hit our community and others nationwide. One of the key sources for the data that is used to commit these crimes is unsecured mail. More than 400,000 Americans each year can trace falsely-opened credit accounts to stolen mail. Reducing the excess mail can help you reduce your exposure to this type of crime.
There are three key places you should contact to help tame the junk mail in your box.
Take 10 minutes to visit these sites, and you'll be on the way to protecting your identity.
There are three key places you should contact to help tame the junk mail in your box.
- Remove your name from this list sold by consumer reporting agencies to credit card companies for preapproved offers.
- The Direct Marketing Association's removal tool can pull your name off of the mailing lists used by their 5,200 members - most of the junk you get. Obviously, they're not really concerned about getting your name off the list; they charge $5 to submit your request online, although you can print your request from their site and mail it to them.
- Remove yourself from unsolicited mortgage and home equity loan offers by visiting the DataQuick website.
Take 10 minutes to visit these sites, and you'll be on the way to protecting your identity.
Friday, February 04, 2005
Death Now Less Taxing in Washington
The Washington Supreme Court eliminates state's estate tax
The Supreme Court eliminated the differences between State and Federal rules regarding taxable estates in Washington. You probably remember that the Congress passed legislation in 2001 that raises the threshhold for a taxable estate over the next several years, and eliminates estate taxes in 2010. Washington had never increased their threshhold accordingly, so individuals were having to deal with two different sets of rules for estate taxes. Even though an estate was exempted from federal tax, it could have a Washington liability.
This difference complicated financial planning and prevented Washington residents from enjoying the estate tax relief contemplated by Congress. The Supreme Court decided that Washington was only ever entitled to a portion of the federal tax. If there were no federal tax, Washington had no right to collect the state's portion.
As a result, estates that paid Washington will receive at least a partial refund of their estate taxes. If an estate was completely exempt from Federal tax, it looks like they will receive a full refund from Washington.
This is the type of change that makes a huge difference here in the financial and estate planning community. Differing sets of standards complicate the planning substantially, and simplification will help individuals better understand the rules.
The Supreme Court eliminated the differences between State and Federal rules regarding taxable estates in Washington. You probably remember that the Congress passed legislation in 2001 that raises the threshhold for a taxable estate over the next several years, and eliminates estate taxes in 2010. Washington had never increased their threshhold accordingly, so individuals were having to deal with two different sets of rules for estate taxes. Even though an estate was exempted from federal tax, it could have a Washington liability.
This difference complicated financial planning and prevented Washington residents from enjoying the estate tax relief contemplated by Congress. The Supreme Court decided that Washington was only ever entitled to a portion of the federal tax. If there were no federal tax, Washington had no right to collect the state's portion.
As a result, estates that paid Washington will receive at least a partial refund of their estate taxes. If an estate was completely exempt from Federal tax, it looks like they will receive a full refund from Washington.
This is the type of change that makes a huge difference here in the financial and estate planning community. Differing sets of standards complicate the planning substantially, and simplification will help individuals better understand the rules.
Thursday, January 20, 2005
Don't Forget the Sales Tax!
As we've discussed in previous postings, the new Sales Tax deduction is a boon to Washington taxpayers. Just remember to let us know about any major purchases you've made in 2004 that would qualify for an additional deduction. Sales taxes paid on (non-business) purchases of vehicles, boats, planes, and home improvements can be deducted in addition to the base sales tax deduction given by the IRS.
Many clients tell us that they have purchased their home building materials tax-free in Oregon. These expenses aren't deductible -- no tax was paid, so there's no tax to deduct.
We'll be glad to help you with any questions you have on this new deduction!
Many clients tell us that they have purchased their home building materials tax-free in Oregon. These expenses aren't deductible -- no tax was paid, so there's no tax to deduct.
We'll be glad to help you with any questions you have on this new deduction!
Thursday, January 06, 2005
Tsunami aid donations could be tax-deductible for 2004
Tsunami aid donations could be tax-deductible for 2004 - coshoctontribune.com
The congress has passed a bill that would allow contributions made in January for tsunami relief to be deducted on your 2004 income tax return. Usually, contributions are only deductible in the year that they're made. With the massive size of this disaster, and the timing being so close to year end, Congress wanted to encourage people to contribute to the relief efforts.
The bill has not yet been signed into law, but should be shortly. We'll provide any other relevant details as they're released.
The congress has passed a bill that would allow contributions made in January for tsunami relief to be deducted on your 2004 income tax return. Usually, contributions are only deductible in the year that they're made. With the massive size of this disaster, and the timing being so close to year end, Congress wanted to encourage people to contribute to the relief efforts.
The bill has not yet been signed into law, but should be shortly. We'll provide any other relevant details as they're released.
Wednesday, January 05, 2005
Credit Where Credit Is Due
We all know about the IRS and their tendency to take, take, take. Did you know they also hand out money to businesses? Here's a list of some business credits they award. Are you missing out on any of them?
Work Opportunity Tax Credit - Hire certain food-stamp or SSI recipients, disabled vets, or ex-felons, and you can receive up to $2,400 per employee.
Welfare to Work Credit - Employing individuals who had been on welfare for at least 18 months can get you as much as $8,500 per employee.
Small Employer Pension Plan Credit - Small companies who have expenses related to establishing a new retirement plan can get up to $500 credit if they spend at least $1,000.
Tip Credit - Businesses in the food and beverage industries can claim a credit for payroll taxes the business has paid on tips reported by the employees, under certain circumstances.
Also, credits are available for things like employer-provided child care facilities, research and development, and creating electricity from renewable sources.
Work Opportunity Tax Credit - Hire certain food-stamp or SSI recipients, disabled vets, or ex-felons, and you can receive up to $2,400 per employee.
Welfare to Work Credit - Employing individuals who had been on welfare for at least 18 months can get you as much as $8,500 per employee.
Small Employer Pension Plan Credit - Small companies who have expenses related to establishing a new retirement plan can get up to $500 credit if they spend at least $1,000.
Tip Credit - Businesses in the food and beverage industries can claim a credit for payroll taxes the business has paid on tips reported by the employees, under certain circumstances.
Also, credits are available for things like employer-provided child care facilities, research and development, and creating electricity from renewable sources.
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