Blog | WM. F. Horne & Company, PLLC

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
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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
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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
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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
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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
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22Dec2010

Limited Liability Companies Must File Annual Reports Starting in 2011

Pursuant to Section 79-29-215 Miss. Code Ann. (1972), all limited liability companies operating in Mississippi will be required to file an Annual Report with the Secretary of State starting with the calendar year 2011. The new LLC Annual Reporting Form will be available to the public beginning Monday, January 3, 2011, on the Secretary of State’s website, www.sos.ms.gov. The deadline for completing the report is April 15th of each year.

Mississippi LLCs may submit their report without charge….

  • 22 Dec, 2010
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20Dec2010

Dividing an Inherited IRA Before Year-End Can Improve Tax Results for Each Beneficiary

December 31, 2010 is an important deadline for individuals who inherited an IRA from an IRA owner who died in 2009. Where there are multiple beneficiaries for the IRA, splitting up the account into several accounts can yield important tax and other benefits for each beneficiary.

When an inherited IRA has several beneficiaries and is left in one account, the required minimum annual distributions are based on the age of the oldest beneficiary (shortest life expectancy) rather than…

  • 20 Dec, 2010
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16Dec2010

Maximizing Credits to Reduce Taxes

There are a number of credits that can help reduce your tax bite for 2010. Unlike a deduction (which reduces your taxable income and thus provides a benefit equal only to the deduction amount times your tax rate), a tax credit is a dollar-for-dollar reduction of your tax. For some credits―such as the Earned Income Tax Credit, Child Tax Credit, Child and Dependent Care Credit, and others―there’s not much you can do to change the outcome. However, there are…

  • 16 Dec, 2010
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14Dec2010

Tips for Year-End Donations

The year-end brings the holidays and a barrage of charitable solicitations. It is also your last chance to make a charitable contribution and obtain a deduction for 2010.

Over the past few years, the IRS has tightened the recordkeeping rules for charitable contributions. Therefore, it might be appropriate to review the recordkeeping requirements before making your year-end donations to your favorite charities.

Rules for Clothing and Household Items – To be deductible, clothing…

  • 14 Dec, 2010
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09Dec2010

Is it Best to Maximize or Minimize Deductions?

As the end of the year approaches, it’s a good time to review your potential tax deductions and develop a strategy that maximizes the benefits. Most taxpayers may deduct the higher of two amounts from adjusted gross income when figuring their taxable income. These amounts are either a fixed amount set by law (the “standard deduction”) or a listing of the expenses the taxpayer paid during the year that the government allows (known as “itemized deductions”)….

  • 9 Dec, 2010
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