CRI Articles: Business Tax

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IRS Crosses Finish Line and Passes Regulations to Deduct Business Start-up Expenses
The IRS has issued final regulations relating to elections to deduct start-up expenditures, organizational expenditures of corporations, and organizational expenses of partnerships. The regulations were issued to provide guidance on how to properly make the limited deductions for expenses paid or incurred after October 22, 2004, that are allowed by the amendments made to the American Jobs Creation Act of 2004.

IRS Standard Mileage Rates for 2012 Mostly Unchanged
The Internal Revenue Service announced the optional standard mileage rates for 2012 that businesses can use to deduct the costs of operating a vehicle for business, charitable, and medical or moving purposes. The rates remain mostly unchanged since the mid-year adjustment effective on July 1, 2011.

Time for 2012 IRS Cost-of-Living Adjustments
It's time to consider the impact of the 2012 cost-of-living adjustments recently released by the IRS. These are automatic adjustments built into the tax law, but they don't always result in increases. With inflation now a little higher than it has been, some amounts that haven't risen in recent years are increasing for 2012 and others are increasing by larger sums. Still, there are many amounts that will stay the same as they were for 2011.

Strategic Moves: Tax Planning for 2011 Year-End
The key to successful strategy is planning your moves in advance and responding to any changes. As the end of the year approaches, CRI recommends applying these principles by reviewing your tax situation and assessing any potential actions needed prior to December 31st to reduce your tax bill. Many opportunities are available this year that may significantly reduce your taxes, but 2011 also presents some unique challenges.

Alabama Immigration Law & E-Verify Program
Most are aware of the new Alabama Immigration Law impacting all entities conducting business in the state. Support has risen for changes to the law, but the specifics regarding potential revisions (if any) and the impact on Alabama are unknown at this time. CRI is monitoring the situation because of the uncertainty that has arisen about the future of the immigration law. We recommend that each Alabama business now prepare a game plan to address the requirement for the E-Verify Program since it is unlikely that this system will be eliminated by any of the potential changes.

Welcome Relief: Congress Repeals 3% Government Contractor Withholding
On November 16, 2011, Congress passed legislation repealing a controversial law that would have required federal, state, and local government entities with total annual expenditures of $100 million or more to withhold 3% of certain payments for goods and services to government contractors and vendors. The legislation also contains an amendment - the VOW to Hire Heroes Act - that expands and extends tax credits for companies that hire unemployed or disabled veterans and provides other veterans' benefits.

Paper Cut: New EFT Rules Eliminate Paper Deposits
With revised Electronic Funds Transfer (EFT) rules effective on January 1, 2011, employers are required to use the Electronic Federal Tax Payment System (EFTPS) for all federal tax deposits (FTDs). This new EFT system replaces the use of paper coupons. Important note: Generally, EFT payments must be initiated with a bank one day before the deposit due date.

IRS Hot Buttons: Small Businesses
For 2011, all reports indicate that the IRS is tightening its' standards largely due to pressure from the current Federal budgetary crisis that is driving the maximum collection of all allowable tax revenues. Meanwhile, the IRS has become very adept at spotting irregularities in small business tax reporting. So what are some of the specific hot buttons that the IRS will be more likely to notice during 2011?

IRS Offers Employers Worker Misclassification Program
This time of year, many of us are rooting for our team to catch a break. The good news is that the IRS is currently offering a "break" of its own in the form of a worker misclassification program. A new IRS program allows eligible employers to voluntarily reclassify workers as employees - rather than independent contractors - for future tax periods. In exchange, the employers' liability for past payroll tax obligations is reduced to a minimal payment. The goal of the Voluntary Classification Settlement Program (VCSP) is to increase tax compliance while reducing employers' tax and administrative burdens with misclassified workers.

For related, timely details, be sure to also visit the business tax section of CRI's Blog.