About Roger A. Kahan CPA | Back Issues
TAX TIPS AND FACTS
Issue Volume 25, Number 02 - October 2011

Roger A. Kahan CPAROGER A. KAHAN, CPA
Tax and Business Consultant
Serving the tax and financial needs of
individuals and small to medium businesses
almost anywhere in the USA6
500 North Main Street, Suite E
Randolph, MA 02368-6700
VOICE: 781.963.RAK-1 8  www.RAK-1.com 9  e-mail: kahan@RAK-1.com
Copyright ©2011 Roger A. Kahan, CPA -  ALL RIGHTS RESERVED

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TOPICS COVERED IN THIS ISSUE:

"NEXUS" in another state
It's just a suggestion
Property Tax Assessments
Technology tips
What will you do when you retire?
A real tax benefit
Charitable contributions
What else do I do if I receive an IRS notice?
Voluntary Worker Classification Program

 


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"NEXUS" in another state

If your business has nexus, or "substantial physical presence" in another state, that state, or states will expect you to pay income and sales/use taxes on revenue generated there.

BDefinitions of "substantial" vary, and some states are more aggressive than others to find and levy taxes on businesses with nexus within their boundaries. Some major considerations are:

1. Do you have a sales office within another state?.

2. Do you provide service (other than just delivery of product or basic sales assistance) to customers in another state?

This is only a guide to show how some states have ruled. Call me for more information

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IT'S JUST A SUGGESTION:

If you're like many of us, your car sometimes becomes an extension of your house or office, and you tend to stash "stuff" on the seats or on the floors. Now this stuff can be valuable - gifts, store purchases, purses, and the like; or it can be what you and I consider junk.

However, what we think of as junk may be another person's "gold" and ripe for the taking. Items left in cars can be tempting to others.

To avoid loss, a good rule of thumb at anytime is to stop and look around before exiting your car. If you have "stuff" that's visible to someone outside the car, it is best to stash it in the trunk or out of sight before locking and leaving your vehicle.

That way you know your items will be waiting for you when you return.

Our thanks for this fine advice go to the monthly employee bulletin produced by the public relations department of the New England Sinai Hospital of Stoughton, Massachusetts.

 

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Property Tax Assessments

Do not assume that your property tax assessment is correct, especially if your home's assessed value has changed drastically during an up and down swing in the real estate market. If home values have decreased substantially since annual values were established, you may be entitled to abatement. Checking the correctness of the assessment may be easier than you think and may provide you with a decreased real estate tax bill. Check the timing allowed to file an abatement (this should appear on your bill).

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TECHNOLOGY TIPS BY Lisa

Today's Topic: Phishing

Phishing is the act of sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft. The e-mail directs the user to visit a website where you are asked to update personal information, such as passwords and credit card, social security, and bank account numbers that a legitimate organization already has. The website, however, is bogus and set up only to steal the user information.

The best advice to you is: "If you get an email from someone that you do not recognize, just delete it". Do not open it. menu

 

 

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WHAT WILL YOU DO WHEN YOU RETIRE?

Thinking ahead will help you lead an interesting and rewarding life after retirement. For most people, the key to a happy and fulfilling retirement is simple: staying busy.

Unfortunately, when planning for retirement, a lot of folks focus only on finances, and fail to think about, or plan for, how they will spend their time.

Why worry about retirement activities now, when retirement is years, or even decades, away? Because, put bluntly, people who count on developing new interests and involvements after 65 often will not. And that makes for a bored, depressed old age.

Start Planning Now - It's never too early to plan for what you will do in your golden years. To start, take a few minutes to write down the things you expect to be actively involved in. Don't count solo activities such as reading, watching TV, or jogging. While fine in themselves, they are not likely to keep you energized and interested for long. Be as specific as you can. For example, if you plan to participate in charitable activities aimed at helping to educate Third World children, who will you work with and what will you do?

Keep in mind that participating in just a few activities may not keep you interested in life and interesting to others. So if your list consists of travel, adult education courses and golf, you may need to do more planning. Here are some other activities to consider -- and how to plan for them:

Working Part-Time - Many people who enjoy the hustle bustle and creativity of the workplace find that working at least part-time after retirement age offers the best opportunity to stay busily involved in life. And, of course, working a few extra years can go a long way toward helping solve money problems

If you hope to establish a new career, turn a hobby into a business or find a part-time job more challenging than flipping burgers, it's important to plan ahead. Investigate whether you'll need more education, experience or skills in order to execute your plans. Then, take the time before you retire to develop the tools you'll need. For example, if you'd like to convert your passion for gardening into a landscaping business, you may need to take courses in marketing and accounting, learn how and where to buy wholesale plants and begin developing a customer base. This may mean cutting back on current work and making some short-term financial sacrifices.

This commentary was brought to you by your friendly neighborhood CPA. menu

 

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A REAL TAX BENEFIT

If the home tax deductions do provide you with an income tax refund, you should consider adjusting your income tax withholding exemptions at work to allow you to bring more money home each pay period through an increase in your net pay. That additional net payroll can help you pay the mortgage each month. You can change your payroll withholding exemptions by visiting your payroll or your human resources department. If they can't show you how to do it, we would be happy to assist you.

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CHARITABLE CONTRIBUTIONS

I know that I have mentioned this subject to all of my clients during their annual tax interview, but it is important to remember that you must have a receipt in order to claim a charitable deduction. This started on January 1, 2007. Bank checks, credit card slips, payroll deductions and signed letters and receipts for clothing, etc from the charity constitute a receipt. If your gift is over $125, you must obtain a signed receipt that also states that you received nothing in return for your gift (if you did receive something for making the gift, the value of what you received is NOT deductible as a charitable contribution).

Remember: NO RECEIPT! NO DEDUCTION! menu

 

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WHAT ELSE DO I DO IF I RECEIVE AN INTERNAL REVENUE SERVICE NOTICE?

This is a continuation of a subject from the last issue of Tax Tips and Facts

Each year, the IRS sends millions of letters and notices to taxpayers for a variety of reasons. Here are several more things to know about IRS notices - just in case one shows up in your mailbox.

Don't panic. I can help you deal with many of these letters simply and painlessly.

If you are a client of this office, you should send me or drop off a copy of the notice as soon as possible. We shall review the notice and your file to determine the next step in the procedure. menu

 

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IRS Announces New Voluntary Worker Classification Settlement Program (IR-2011-95, Ann. 2011-64)

The IRS has announced the launch of a new Voluntary Classification Settlement Program (VCSP) that will enable many employers to resolve past worker classification issues and achieve certainty under the tax law at a low cost by voluntarily reclassifying their workers. Under the VCSP, which is a part of the IRS's "Fresh Start" initiative, employers can become compliant by making a minimal payment covering past payroll tax obligations rather than waiting for an IRS audit.

To be eligible for the VCSP, an employer must: (1) consistently have treated the workers in the past as nonemployees; (2) have filed all required Forms 1099 for the workers for the previous three years; and (3) not currently be under audit by the IRS, the Department of Labor or a state agency concerning the classification of these workers.

Interested employers can apply for the program by filing Form 8952, Application for Voluntary Classification Settlement Program, at least 60 days before they want to begin treating the workers as employees. Employers accepted into the program will pay an amount effectively equaling just over one percent of the wages paid to the reclassified workers for the past year. No interest or penalties will be due, and the employers will not be audited on payroll taxes related to these workers for prior years. Participating employers will, for the first three years under the program, be subject to a special six-year statute of limitations, rather than the usual three years that generally applies to payroll taxes. menu

 

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Roger A. Kahan is a Certified Public Accountant, a Tax and Business Consultant serving the tax and financial needs of individuals and small to medium sized businesses primarily in eastern Massachusetts (as well as almost anywhere in the United States). Roger is always seeking additional clients and other professional’s clients to advise and improve their personal or business life. Do you know of someone that could use our professional services? Please let us know if we can use your name in an introductory letter or phone call. We do offer a referral fee to those that join our ever-increasing list of tax clients. Call for more details. Thank you.

 

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The Massachusetts Society of CPAs represents over 8,800 Certified Public Accountants working in public accounting, industry and business, or in government and education.

 

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REMEMBER:
It’s not what you make that COUNTS;  it’s what you keep!”

 

A failure to plan is a plan to fail.” (Anonymous)

 

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Did you know I do more than just prepare, compile and crunch numbers? I am not just a “bean-counter.” I can also advise you on estate and business planning and offer financial strategies to meet your goals. As your TRUSTED ADVISOR, I know your financial needs better than many other professionals you may be working with.

 

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“Planning for the future is a lot like planting a tree. You’ve got to do it today if you want your family to enjoy it tomorrow.

 

ROGER  A.  KAHAN, CPA  Tax and Business Advisor  Wealth Care Professional 500 NORTH MAIN STREET, SUITE E RANDOLPH, MASSACHUSETTS 02368-6700 VOICE:  781.963.RAK-1 FAX:      781.961.RAK-1 Outside Massachusetts: 1-800-783-RAK-1 kahan@RAK-1.com www.RAK-1.com  A member of: Massachusetts Society of Certified Public Accountants Massachusetts  Association  of  Public  Accountants Computer Organizations of New England, Inc. Randolph   Chamber   of   Commerce,   Inc. National   Society  of  Tax   Professionals Neponset Valley Chamber of Commerce Stoughton Chamber of Commerce Knights of Pythias International National  Notary  Association New England Sinai Hospital and Rehabilitation CenterNo one is required to pay more in taxes than the law demands.  If you pay too much, you have fewer resources to meet your other financial goals.  I can help find tax deductions and credits, and help you plan so your taxes can be as low as possible.  I can also assist you with business and estate tax planning.	 The information contained in this publication has been obtained from sources I believed to be reliable at the time of writing, but are not guaranteed as to their accuracy or completeness.  This material, or any portions thereof, may not be reproduced without prior written permission of Roger A. Kahan, CPA.

MSCPA online MA Society of Certified Public Accountants. The CPA Never Underestimate the Value.

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