2011 TAX YEAR-IN-REVIEW

2011 Lays Groundwork for Tax Reform, Makes Important Changes Impacting 2012

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2011 had been predicted to be a quiet year in federal tax news – as it landed between major tax legislation in 2010 and expected tax reform in 2012 – but the year brought many significant tax developments from the Obama Administration, Congress, the Treasury Department, the IRS, and the courts. President Obama signed bills enacting hiring incentives, repealing three percent government withholding, and more. Congress initiated a national conversation on the pros and cons of tax increases, tax reform, and deficit reduction, which will frame tax proposals for 2012 and beyond. The IRS issued a steady stream of much-needed guidance for businesses and individuals, ratcheted up its attention on tax compliance, particularly in the international area, and continued its multi-prong initiative on return preparer oversight. Meanwhile, the Tax Court and other federal courts handed down decisions of their own, impacting rules for many other taxpayers. This Tax Briefing provides a review of the key tax law developments of 2011 and more.

IMPACT.

One common theme during 2011 among practitioners and taxpayers was the lack of certainty in tax planning for future years. The uncertainty was magnified by the scheduled expiration of many tax incentives after December 31, 2011 and the end of the Bush-era tax cuts after 2012, due to extension by the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (2010 Tax Relief). Despite the issuance of scores of major rules and regulations in 2011, tax practitioners generally felt that the IRS fell short in providing all the guidance needed to deal with an increasingly complex tax code.  CLICK  HERE TO READ MORE

Tips for Taxpayers: Business owners Common Tax Return Mistakes

It never ceases to amaze me this time of year how many tax preparers miss what I believe are very common credits and deductions. The purpose of the article is to shed some light on the most commonly overlooked tax reduction opportunities.

To read Full Article to read more

 

The good, the bad, and the ugly about Nevada Jobs Legislation

Democratic Legislative Leadership has placed an agenda to pass important jobs in the first 30 days of the Session.  The deadline arrived on March 7^th.  However there is a down side for the lobbyists, the DBR’s (Business Development Resources) and bills are being rushed to a committee heading at such a fast pace that it is complicated to even know what?s in them.  There are some job bills that have been introduced recently, both helpful and others not so helpful.  READ FULL ARTICLE

Message from Mike Bosma: Follow a course that ‘focuses on what the state could be’ (Courtesy RGJ.com)

In proper CPA fashion, I say, “it depends.” As I see it, we have two potential courses of action.

Course one: We can maintain the status quo.

This path centers more on what we were or what we had. We were the city that started legalized gaming after prohibition. We were the divorce capital of the world. We had the monopoly on legal gaming that created casino profits and the ability for a non-college-educated card dealer or valet to make $100,000 per year.  READ FULL ARTICLE

Employee take-home pay increases 2% in 2011

The most recent Tax Act signed into law (Tax Relief Act of 2010, signed December 17, 2010) will provide workers with a 2% increase in take home pay in 2011! This is accomplished by a reduction in the employee-share of the OASDI portion of Social Security taxes from 6.2 percent to 4.2 percent for wages earned up to the taxable wage base of $106,800. The Medicare component is the same (1.45 percent), for a combined tax rate of 5.65 percent. However, the Act did not change the employer’s combined tax rate as that remains at 7.65 percent.
This change will also benefit self-employed individuals with a reduction in their OASDI tax from 12.4 percent to 10.4 percent. When combined with the Medicare component of 2.9 percent, the total self-employment tax rate is 13.3 percent.

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Real Property Tax Paradox

Are you concerned that you are overpaying your property taxes? Read on to determine if you are and what to do about it; it can be as easy as 1-2-3.

Kelsey Hernandez- CPA in Nevada

RENO, NEVADA (February 17, 2011) Bosma Group P.C., Northern Nevada’s premier accounting firm serving growing businesses is proud to announce Kelsey Hernandez, manager, has been accepted as a CPA in Nevada.  Previously, Kelsey has been licensed to practice with the California Board of Accounting.  Hernandez has been in public accounting, specializing in federal income, property and sales tax for over 30 years. In addition to Kelsey’s diverse skill set, she is an expert at assisting small businesses flourish. 

Mike Bosma, managing shareholder said, “While Kelsey has been serving clients here for years, she now can be proud to be listed as a Nevada CPA.” READ FULL ARTICLE HERE

Nevadans face new challenge: unforeseen tax penalties on early withdrawals

From RGJ 3/4/2011

Mike Bosma,of the Bosma Group www.thebosmagroup.com,  managing shareholder of Reno accounting firm Bosma Group, said he has seen a lot of this tax problem/penalty scenario, particularly in the past two years.

During the economic downtown, some unemployed Nevadans dipped into their 401(k) or IRA retirement accounts to help cover everyday living expenses.

Now that tax season has arrived, they are discovering the ramifications of those decisions. Taxpayers who withdrew 401(k) or IRA funds will be taxed between 10 percent and

35 percent on their withdrawals, depending on their tax bracket.

In most cases, they also must pay a 10 percent early-withdrawal penalty. For an individual or family struggling to get by without a steady source of income, that double whammy is painful, if not impossible, to absorb. But the Internal Revenue Service wants its money.

Read More: http://www.rgj.com/apps/pbcs.dll/article?AID=2011103040425

Special year–end tax strategies

Article provided by The Bosma Group, PC – check us out here http://www.thebosmagroup.com

Interested in big tax breaks for small businesses, tax strategies as a small business owner, or even ways to cut personal taxes? There is a chance for investors to cash in some tax-saving opportunities. Check out the article below to see special year–end tax strategies.

Click for full article > tax strategies 11.10

Can a ROTH IRA Conversion be a valuable tax strategy for you in 2010?

Here is an awesome article provided to you by www.thebosmagroup.com .

Year-end tax planning and strategies need to be considered now that November is here. 

Converting a regular IRA into a ROTH IRA may be a valuable solution to many tax payers. The conversion itself is a taxable distribution, and the ROTH IRA grows tax free. To claim this taxable conversion in full in 2010, or split between 2011 and 2012, requires you to convert your regular IRA in 2010.

Individuals who should consider an IRA to Roth IRA conversion:

1)      Taxpayers that can afford the tax on the converted amounts.

2)      Taxpayers that anticipates being in a higher tax bracket in the future than they are currently in.

3)      Taxpayers that anticipates being in a higher tax bracket during retirement.

4)      Have a significant amount of time before reaching retirement to allow assets to grow tax-free.  The tax-free growth will help recoup dollars that may have been lost due to the conversion tax.