Blog | WM. F. Horne & Company, PLLC

18Jan2011

Employers Must Stop Advance Earned Income Credit Payments in 2011

Advance earned income credit has been repealed for 2011. This credit allowed certain low-income employees to receive an advance payment of the earned income credit in their paychecks. Their withholding was lowered to take into account the payment. However, employers are cautioned that the advance earned income credit has been repealed beginning with the 2011 tax year. Therefore, they must stop the advance EIC credit payments effective for payroll payable in 2011.

If you have questions, please call…

  • 18 Jan, 2011
  • webmaster
  • 0 Comments
Read more
15Jan2011

It’s Tax Time!

Are You Ready?

If you’re like most taxpayers, you find yourself with an ominous stack of “homework” around TAX TIME! Unfortunately, the job of pulling together the records for your tax appointment is never easy, but the effort usually pays off when it comes to the extra tax you save! When you arrive at your appointment fully prepared, you’ll have more time to:

  • Consider every possible legal deduction;
  • Better evaluate your options for reporting income and deductions to…
  • 15 Jan, 2011
  • webmaster
  • 0 Comments
Read more
12Jan2011

Tax-Free IRA to Charity Distributions Reinstated

The provision that permits taxpayers age 70½ and over to make direct distributions (up to $100,000 per year) from their Traditional or Roth IRA account to a charity has been reinstated for 2010 and 2011. The distribution is tax-free, but there is no charitable deduction. This provision can be very beneficial to taxpayers who have social security income and/or do not itemize their deductions.

The key benefits of this provision…

  • 12 Jan, 2011
  • webmaster
  • 0 Comments
Read more
09Jan2011

Are You Required to File 1099s?

If you use independent contractors to perform services for your business and you pay them $600 or more for the year, you are required to issue them a Form 1099 after the end of the year to avoid facing the loss of the deduction for their labor and expenses, and to avoid a monetary penalty. The 1099s for 2010 must be provided to the independent contractor no later than January 31, 2011.

In order to avoid a penalty,…

  • 9 Jan, 2011
  • webmaster
  • 0 Comments
Read more
06Jan2011

Federal Estate Tax Retroactively Reinstated

The Bush era tax cuts slowly phased out the federal estate tax and abolished it altogether for decedents dying in 2010, and replaced it with a rather complicated modified carryover basis regime. Just about everyone assumed Congress would reinstate the estate tax for 2010. As the year wore on, opinions began to change to where just about everyone predicted Congress would not reinstate the estate tax for 2010. Then out of the blue, mixed in with the GOP/Obama Administration…

  • 6 Jan, 2011
  • webmaster
  • 0 Comments
Read more
03Jan2011

New Reduced Payroll Tax for Employees Can Be a Headache for Employers

As part of the new tax cuts for 2011, the Social Security (OASDI) payroll tax withholding for employees has been cut by a full 2 percentage points from 6.2 percent to 4.2 percent of wages paid.

This late action has created problems for both the IRS and employers in implementing this last minute change. The IRS recently issued guidance to employers:

Employers should start using the new withholding tables and reducing the amount of Social…

  • 3 Jan, 2011
  • webmaster
  • 0 Comments
Read more
30Dec2010

Bonus Credit for Retirement Savings Contributions

Generally, taxpayers with lower incomes do not have sufficient financial resources to make retirement savings contributions, often leading to inadequate resources when it comes time to retire in the future. Recognizing this problem, Congress added the Retirement Savings Contributions Credit (Savers Credit) to the tax code a few years back.

What this means is that lower-income taxpayers can have a portion of their retirement savings contributions returned to them in the form of a tax credit—a dollar-for-dollar offset…

  • 30 Dec, 2010
  • webmaster
  • 0 Comments
Read more
29Dec2010

Did Congress Save You From the AMT in 2010?

Alternative Minimum Tax (AMT) – For several years, Congress has failed to permanently resolve the nagging issue of the AMT, and instead, each year has applied a one-year patch without which an estimated 28 million taxpayers would be hit with this punitive tax.

This year, Congress took the AMT issue to the brink, but in the eleventh hour decided to patch it again, this time for two years, 2010 and 2011. For a change, taxpayers will be able…

  • 29 Dec, 2010
  • webmaster
  • 0 Comments
Read more
28Dec2010

Increased Year-End Withholding May Avoid or Reduce Underpayment Penalties

Taxpayers are required to prepay their taxes for the year through withholding or estimated tax payments. The amount that must be paid in advance is an amount equal to the lesser of 90% of the current year’s tax liability or 100% of the prior year’s tax liability. Higher-income taxpayers, those with a 2009 AGI of $150,000 or more, are required to prepay the lesser of 90% of 2010’s tax liability or 110% of 2009’s tax liability. There is no…

  • 28 Dec, 2010
  • webmaster
  • 0 Comments
Read more
27Dec2010

Congress Extends Tax Breaks

Congress, in an eleventh-hour compromise agreement worked out with the Obama Administration and the GOP Leadership, has extended many of the Bush era tax reductions. The following is an overview of the more frequently encountered tax changes that will have an effect on just about every taxpayer.

INDIVIDUAL PROVISIONS

Individual Tax Rates – Under the Bush era tax cuts, the individual tax rates were reduced and replaced with six tax brackets that increase with income: 10, 15,…

  • 27 Dec, 2010
  • webmaster
  • 0 Comments
Read more