The IRS has recently released this handy tool on their website www.irs.gov to help you in preparing your 2011 tax return.

Due to the fact that this credit originally started out as an interest free 15 year loan and then was later changed to an actual tax credit, filing your return for the next several years has become a challenging task.

If your purchase falls under the 15 year interest free loan, not reporting the correct information on your return will cause a significant delay in the IRS processing your tax return.

In order to determine your reporting requirements you will need the following information to use this look up tool.

1. Your Social Security number.
2. Date of birth
3. Home address.

This is certainly a good news, bad news message. That the cost of living for all of us, from food to commodities like gasoline, has gone through the roof over the past several years is no surprise and painful. That is clearly the bad news.

The good news is that the tax law provides for adjustments which mitigate some of the damage of ongoing rises in cost of living.

To review recent changes see a recent message from UHY, LLP at the following hyperlink.

IRS Announces 2012 COLA Adjustments

By this point virtually every business owner in Michigan has received a State mailing putting them on notice that they are looking for any unclaimed property businesses may hold. This can include uncashed vendor checks, uncashed payroll checks, customer overpayments, and inactive bank accounts, to name a few.

While this law has been on the books forever it’s only recently that the State has pushed to claim what, according to the law, is rightfully theirs. The reason is simple; they need the money.

For an excellent summary of the State of Michigan’s voluntary disclosure program see the following hyperlink.

Michigan Unclaimed Property

The IRS has recently announced that the deadline to file your 2011 tax return and pay any balance due has been moved to Tuesday April 17, 2012.

For more information on this and other matters impacting your 2011 tax filings please copy the following link into your web browser.

http://www.accountingtoday.com/news/IRS-Extends-Tax-Filing-Deadline-April-17-61316-1.html

• 55.5 cents per mile for business miles driven
• 23 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

Governor Rick Snyder’s tax increase on both private and public pensions was recently upheld by the Michigan Supreme Court. Only a portion of the new law didn’t pass muster with the high court since, in the courts opinion, it created a graduated income and thus is considered illegal.

This was certainly one of the more controversial tax provisions that the Legislature put forth in that it increased taxes to individuals while at the same eliminated $1.8 billion in business taxes through the elimination of the Michigan Business Tax.

For the full article see the link below.

http://www.detnews.com/article/20111119/METRO/111190346/1409/metro/Mich.-Supreme-Court-upholds-tax-on-pensions

One of the existing rules under HARP is about to get a major rewrite during 2012. Currently homeowners whose loans are owned by Fannie Mae or Freddie Mac can refinance their underwater home if the loan to value (LTV) is less than 125% of the appraised value.

During 2012 as the major changes to this program are rolled out, the 125% LTV cap will be removed. This program could potentially allow more underwater homeowners to refinance at today’s historically low rates.

Susan Tompor’s article in the Detroit Free Press does an excellent job at summarizing the qualifications that a homeowner would need to meet to possibly qualify under HARP.

Please copy the following address in your web browser to access the article.

http://www.freep.com/article/20111110/COL07/111100506

Unless you operate on a cash basis, a common problem is getting paid within a reasonable time. Many reports by credit organizations confirm not only that the problem is widespread, but it seems to get worse every year and bad debts are the number one reason businesses fail!

While many small business owners gauge their success based on sales, after all “Nothing succeeds without sales” as the adage goes, any shrewd operator knows reducing costs can be far more profitable than increasing sales. For example, if the company sells a product with a 20% profit margin after all costs-product cost, salaries, overhead, etc.-$1,000 in sales (minus $800 in costs) produces a $200 profit. A 10% increase in sales increases profit by $20. But a 10% reduction in costs saves $80, which is four times as much. Thus, a reduction in costs of only 2.5% will produce as much profit as a 10% increase in sales.

The moral of the story is you need to manage the expense side of the equation and nothing is more critical than that of managing your bad debt expense.

Janet Attard, in her article “10 Steps To Getting Paid on Time” provides practical insights on how to do just that. See the hyperlink below for her article.

http://www.openforum.com/articles/10-steps-to-getting-paid-on-time

The IRS just recently issued some revised tax numbers for 2012.

Here are a few highlights:

Standard Deduction: $11,900 for married couples filing a joint return.
Personal Exemption: $3,800
Annual Gift Exclusion: $13,000

The full list of adjusted numbers can be found in IRS Revenue Procedure 2011-52 or copy the following link from the IRS website.

http://www.irs.gov/newsroom/article/0,,id=248485,00.html?portlet=107

For those of you small business owners that haven’t taken the time to check in with your CPA regarding your tax status, it’s time!

The good news is that if you do the planning between now and the end of the year, you can still minimize the amount of tax you will be faced with come April 15, 2012 BUT the window of opportunity is closing quickly.

At this point to minimize the tax bite your CPA should assess the business operating results through your third quarter and then project results through the end of the year. Armed with this projection your tax professional will be able to guide you through the steps necessary cut those pesky tax costs.

Annie Mueller in her article “Timely Tax Tips For Small Business Owners” addresses some planning pointers well worth considering. To see the article copy the following link into your web browser:

http://www.openforum.com/articles/timely-tax-tips-for-small-business-owners?extlink=em-openf-SBdaily