News - Mary Jo Walker Enrolled Agent - Tax Preparation, Representation, Small Business and Personal Finance

Changes can be very rapid in the tax world!

February 12, 2013 by MJWMadison Leave a Comment

Remember last month when we wrote saying that we are all responsible for paying a sales tax (Use Tax) to the state of CT when making Amazon purchases?
On Mon, Feb 4, Governor Malloy’s office announced that Amazon will begin collecting sales tax in the state of CT. According to the governor’s office Amazon will begin collecting sales taxes on CT purchases in November, 2013. This will relieve the taxpayer of the burden of calculating and paying the so-called Use Tax; but, guarantees that Amazon will be charging CT sales tax on Amazon purchases and shipping.

Filed Under: Featured Information, News, Tax Preparation

Don’t Wait, Get It Done Now!

February 6, 2013 by MJWMadison Leave a Comment

Now that your small business has gone through the painful process of gathering information for the annual end of the year 1099 process, we are here to offer some guidance to help make it easier when you hit the end of 2013.

This is not a process that can be ignored any longer. You are now required to indicate on your tax return if you have filed your 1099′s. If you do not have the information to provide your service providers with a 1099, “backup” withholding is required. This is not a requirement that you want to ignore; it can be very costly!!

Start now. Don’t issue any checks to your vendors until you have an accurately completed W-9 form. Rest assured, if you hold the check, you will promptly get the completed form. But…If that doesn’t work ….tell your vendor that you are required to hold back 28% for Federal tax….and be prepared to do it. I am guessing one of these methods will work and will help to reduce your business stress just a little more!

Filed Under: Featured Information, News, Small Business Finance

Here We Go Again . . .

January 24, 2013 by MJWMadison Leave a Comment

2012 Tax Season is in full swing! By now you should have received our 2012 Tax Organizer in the mail. If not, click here to go to our website and download the forms you need.

Due to last minute tax law changes, there is a delay in IRS accepting returns. We will keep you posted. Don’t procrastinate, we can still input all your information. This will allow us to e-file your tax return as soon as the IRS starts accepting them.

We look forward to seeing you at our new location 206A Boston Post Road, Madison, CT 06443.

If you need to speak with us, feel free to give us a call at 203-245-6175.

Filed Under: Featured Information, News, Tax Preparation

Business Filers – 2012 End of Year Reporting

December 31, 2012 by MJWMadison Leave a Comment

We understand that you work hard and value your time. At MJW EA & Company, we strive to match your efforts with resources and information that simplifies the understanding of Tax laws, Rulings, and Regulations that could affect your finances.

Following are helpful hints regarding end of year reporting requirements and closing the year for BUSINESS FILERS (regardless of your tax status – Corp; Partnership; LLC; Sole-Proprietor):

You are required to file 1099′s for all individuals (including partnerships and LLC’s) that you paid more than $600.00 to during the course of the year for services performed. This includes landlords, repairman, maintenance people, interior designers, accountants, and lawyers – to name a few. We can assist you with the 1099 filing to the state and IRS if you are not prepared to do these in house. These are due to the individuals by January 31, 2013. Transmittals to the state and IRS are due by February 28, 2013.
You are required to distribute all W-2′s to your employees by January 31, 2013.
Quarterly payroll reports are due by January 31, 2013.
Annual payroll reports are due by February 28, 2013.
Verify all employees’ personal information. The SSA is charging a $50.00 penalty for all W-2′s that are issued with incorrect name (as registered with the SSA), address, and social security number.
You are required to file your annual or quarterly sales tax report by January 31, 2013.
Verify that the sales reflected in your sales tax reports for the year tie out to the sales you have recorded for your income tax return.
Calculate any “Use Tax” due for taxable items purchased out of state to be included and paid with your sales tax report.
If you carry an inventory perform a year end physical inventory and cost it out.
If you are a cash basis taxpayer: Pay all 2012 expenses prior to December 31, 2012 to benefit from the expense this year.
This is a good time to reconcile all of your fixed assets with what is reported on your Personal Property Declaration and your Fixed Asset Schedule for tax purposes. If you have disposed of any of the equipment or furniture that you have previously depreciated there may be some income tax implications. Review that information and make available for your tax preparation.
Business Mileage Clarification: If you do not take an office-in-home deduction because you do not use the space exclusively and regularly for business, you are still eligible for business miles when you leave your home IF your home office qualifies as your principal place of business. The IRS is stressing compliance on mileage logs – substantiation is extremely important with the IRS moving towards a higher audit rate.
For 2012 Form 1099K, Merchant Card and Third Party Payments, will be sent to you for all of your credit card sales. This information is required to be separately reported on your 2012 tax return.

We will do our best to keep you updated on 2012 Tax Law Changes as we hear about them.

If we can be of any assistance during these processes – or if you have other year-end questions, don’t hesitate to contact us!

Here’s to a peaceful new year!

Filed Under: Featured Information, News, Small Business Finance, Tax Preparation

If you shop on Amazon you need to read this!

December 31, 2012 by MJWMadison Leave a Comment

The CT Sales and Use tax regulations are complicated and confusing and The Department of Revenue Services is looking more closely at this tax. Be mindful of this when you are gathering your information for your 2012 income tax filing.

Use tax is the tax you pay when Connecticut sales tax is not paid to a retailer. The use tax is complementary to the sales tax. Together, the sales and use taxes act to tax Connecticut purchasers equally whether they purchase goods and services within or without Connecticut.

A good example to be mindful of is your Amazon on line purchases. For the most part these purchases have not been charged sales tax and are most often subject to Use Tax which should be claimed and taxed on your annual CT income tax return. Be wary! This is an easy target for the CT DRS.

There is much more information available on this topic at the DRS website: http://www.ct.gov/drs/cwp/view.asp?A=1510&Q=489242

Visit our website maryjowalker.com to find an updated Use Tax Worksheet for your convenience in tracking your 2012 purchases.

Filed Under: Featured Information, News, Tax Preparation

Fourth Quarter Estimated Tax Payments are Due on or Before January 15th!

December 21, 2012 by MJWMadison Leave a Comment

If you need our assistance in determining how much to pay this quarter, please call the office at 203-245-0309 to discuss or to schedule a time to come in and review your books ASAP.

Attached are blank vouchers for both the IRS and the State if you need them. If you have any trouble opening the attached documents please let us know.

Fourth Quarter 2012 Federal Estimated Tax Voucher

Fourth Quarter 2012 Connecticut Estimated Tax Voucher

Make check for the Federal Tax payment payable to the United States Treasury and mail to:

Internal Revenue Service

P.O. Box 970006

St. Louis, MO 63197-0006

Make check for Connecticut State Tax payment payable to Commissioner of Revenue Services and mail to:

Department of Revenue Services

P.O. Box 5053

Hartford, CT 06102-5053

Be sure to write your Social Security or Tax I.D. # and 2012 Form 1040ES on your checks!

If you can pay the Connecticut estimated tax payment before the end of the year, it MAY help to lower your 2012 tax liability.

Also, please make charitable CHET contributions if able by the end of the year. This also MAY help lower your 2012 Connecticut tax liability.

Filed Under: Featured Information, News, Tax Preparation

2012 Tax Strategies

December 11, 2012 by MJWMadison Leave a Comment

Given the uncertainty with the changes in tax law, planning for December 2012 and into 2013 is not as straight forward as it was in 2011. I have found a tax newsletter that I trust – it is filled with good strategies, and tax planning options. And it is free! Take a moment and sign up for this newsletter; I think you will find it easy to read and helpful: About.com Tax Planning: U.S.

It addresses deferring income into 2013; making state estimated tax payments prior to the end of the year, making charitable contributions in 2013; the possible impact of the “fiscal cliff”, as well as many other good topics.

As always, contact our office if you have questions or want to discuss your situation in detail.

Everyone at MJW, EA wishes you a safe, healthy, and peaceful holiday season!

Filed Under: Featured Information, News, Tax Preparation

There is a lot we don’t know about the 2012 and 2013 tax years; and little that we know for certain

November 27, 2012 by MJWMadison 3 Comments

We DO KNOW

According to Warren Buffet “All of America is waiting for Congress to offer a realistic and concrete plan for getting back to a fiscally sound path. Nothing less is acceptable.” We also know most people would agree with this statement. But, there is no agreement as to how to get this done. We do suspect, whatever happens will create tax mayhem!

We DO KNOW

Based on a letter from Steven T Miller, Acting Commissioner of the IRS, to The Honorable Sander M Levin, Ranking Member of the Committee on Ways and Means dated 11/13/2012 that “if there is no Alternative Minimum Tax (AMT) patch enacted by the end of the year the IRS would be forced to operate the 2013 tax filing season based on the expiration of the [previous] AMT patch. There would be serious repercussions for taxpayers.” He went on to say that if no patch is enacted about 28 million taxpayers would face a very large 2012 unexpected tax liability. His letter can be viewed at http://democrats.waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/Final_Response_Levin_37392.pdf

We DON’T know (and it’s a lot!)

If the phase outs for personal exemptions and itemized deductions will be eliminated
If the election to deduct state and local sales taxes instead of state income taxes will return
If the AMT will be eliminated or if the exemption will be increased for 2012 and 2013
If lower long term capital gains tax rates will be extended
If the favorable qualified dividends treatment will be extended
If the surtax on investment income (if your Modified Adjusted Gross Income exceeds $200,000 for single taxpayers and $250,000 for married couples filing jointly) will be repealed
If the mortgage interest deduction will be diminished for certain taxpayers

Good news – WE DO KNOW(and it’s better than nothing!)

The IRS issued the 2013 mileage rates: Business rate is 56.5 cents/mile (up from 55.5cents/mile for 2012); Medical and moving rate is 24.0cents/ per mile (up from the 23cents/mile for 2012)

Because of all of the uncertainty it is more important than ever to be prepared to make some last minute transactions before the year ends. Stay Tuned!