Detroit Business Law » Jay Kossen

Obama Care Provisions Effective 2011

Jay Kossen, CPA — Fri, 23 Jul 2010 19:46:34 +0000

Here are some of the major provisions that will affect most taxpayers starting in 2011:

Employers will be required to report the value of your health insurance coverage on your W-2.

What does this mean to you?

Well technically nothing since insurance coverage won’t be subject to an excise tax until 2018. Furthermore the excise tax of 40% would only apply to the employer-sponsored health insurance coverage amount that exceeds $10,200 for individuals and $27,500 for family coverage.

However once politicians start to see how much revenue could be generated from employer sponsored health insurance coverage, they may decide to apply the excise tax sooner rather than later to help pay for the deficit.

Effective January 1, 2011 only doctor prescribed medicines and insulin will be eligible for tax free reimbursement from one of the following plans.

Under current law insulin, prescribed and over the counter medicinal expenses qualify for tax free reimbursement from Flexible Spending Accounts (FSA), Health Reimbursement Accounts (HRA), Health Savings Accounts (HSA) and Archer Medical Savings Accounts (MSA)

If you are enrolled in one of the preceding plans you may want to consider stocking up on over the counter medicines this year.

What To Do If You Receive An IRS Notice

Jay Kossen, CPA — Fri, 25 Jun 2010 15:27:32 +0000

The most important thing is that you do not panic or ignore the notice. Most of these notices are for simple things like mathematical errors or even for items that you missed on your return that now may result in a favorable outcome to you.

The IRS has an excellent list of things you should know about when receiving a notice in IRS Summer Tax Tip 2009-22.

Item 8 from the list is extremely important. In practice there have been numerous times that clients have had to send in the requested items two or even three times due to paperwork being misplaced at the IRS, a different agent being assigned or that the case has been transferred to a different office.

You should also send any response to a notice via certified mail to prove that you have submitted your response by the specified timeline in the notice.

To access the list please click the following link from the IRS’ website. IRS Tax Tip 2009-22

When Cash Is Tight

Editor — Fri, 11 Jun 2010 18:50:42 +0000

I recently found an interesting article on Open Forum form Laura Rich titled “Paying Your Small Business Bills”

Her article provided a wide range of ideas between renegotiating trade terms, contacting your vendors, to squeezing your customers for payment.

In practice I have found that it is always better to communicate with your vendors when your business is having cash flow problems before they contact you. They are more willing to work with you if you contact them first. After all they want your business for the long-term.

Contacting them first not only shows that you are interested in a long-term relationship with your vendor, but it also lets them know that you take seriously your responsibility to pay your bills.

To read the rest of her article click the following link Paying Your (Small Business) Bills.

So You’ve Filed Your Return with the IRS, Now What?

Jay Kossen, CPA — Mon, 24 May 2010 15:29:50 +0000

Have you ever wondered what your responsibilities are after you have filed a return? IRS tax tip 2010-74 provides a list of items ranging from how to check the status of your refund, to what you should do if you have made a mistake on your return.

To access this tax tip click the following link from the IRS website Here’s What Happens After You File IRS Tax Tip 2010-74.

Generating Business

Editor — Tue, 04 May 2010 12:48:16 +0000

I recently found an interesting article on Open Forum form Julie Rains titled “11 Free Ways to Generate Referrals”

Her article provides a list of 11 different ways to generate referrals without spending money.

I find item 2 from her list to be extremely important in any service business, since a good portion of our work is dependent upon deadlines imposed by either clients or regulatory agencies. It is always better to under promise and over deliver than to make aggressive commitments that can’t be met thus resulting in a dissatisfied client.

To read the rest of her list click the following link 11 Ways to Generate Referrals

Health Care Timeline & Its Affect on the Tax Code

Jay Kossen, CPA — Fri, 09 Apr 2010 12:06:48 +0000

I recently read an interesting article “Health Care Reform Reshapes Tax Code” by Alistair M. Nevius, J.D. in the April edition of the Journal of Accountancy.

This article provides a good summary of the various tax code changes that you will see between 2010 and 2018.

To view the article please click the following link Health Care Reform Reshapes Tax Code

IRS Look-Up Tool for Economic Recovery Payment

Jay Kossen, CPA — Mon, 29 Mar 2010 19:34:31 +0000

Due to the large volume of electronically filed tax returns that have been rejected, the IRS has finally decided to address the issue. It is awfully nice of them to wait until the very end. After all there are only three weeks left before the April 15^th tax deadline.

What is the issue? It’s simple as with human nature we tend to forgot various details during the course of our busy lives. Many taxpayers do not remember if they received the one-time $250 payment during 2009 from the Social Security Administration, the Department of Veteran’s Affairs, or the Railroad Retirement Board. The result of this has been that they are claiming an incorrect tax credit amount and thus having their tax returns rejected by the IRS.

Starting March 23, 2010 you will be able to go to www.irs.gov to find out if you have received this payment during 2009.

You will need to enter the following information on the IRS website.

Social Security number
Date of birth,
ZIP code from the most recent tax return.

When Opportunity Knocks, Should You Answer?

Jay Kossen, CPA — Fri, 05 Mar 2010 10:31:21 +0000

There is a quote from William James that reads:

“He who refuses to embrace a unique opportunity loses the prize as surely as if he had failed.”

A couple of weeks ago, I received a unique opportunity from Renee Warnimont, the business development officer who supports the Charter One Bank branches in the Downriver communities of Dearborn, Southgate, Taylor and Trenton, Michigan. Each month, Charter One conducts a conference call to discuss relevant topics in the banking industry. Because February’s call focused on how the state of the economy in Michigan & Ohio is affecting small businesses, Renee offered me the chance to be the only CPA in the State of Michigan to present on the economic and tax issues that are having an adverse affect on small business owners today.

I decided to embrace this unique opportunity even though public speaking is not my expertise. In hindsight this proved to be a tremendous marketing opportunity. Initially, I expected the conference call would only include the branches of the Detroit metropolitan market and Toledo, Ohio. Instead, it turned out that the call included 40 bankers, 6 Regional Directors and the Michigan State Director of Charter One, along with branches representing Akron, Canton, Cleveland, Columbus and Toledo, Ohio. Not only did I have exclusive access to all of these decision makers, but the following week I was able to meet the Michigan State Director for lunch to follow up on the conference call and to provide him with additional information about Numerico, P.C.

In closing, I want to give special thanks to Renee for this incredible opportunity. If you have any banking questions or would like to hear a different point of view regarding the banking industry, you can email Renee at Renee.Warnimont@CharterOneBank.com

Tough Love in Your Business

Jay Kossen, CPA — Fri, 19 Feb 2010 10:49:47 +0000

What do oil and water and family members who are employees in your small business have in common?

They rarely mix and are frequently toxic to the environment.

Although it should be noted that there are of course occasions of success, the most likely outcome is entrenched employees that are nearly impossible to remove, strained relations and uncomfortable holiday dinners. In fact, you could probably make an argument that it is easier to remove a unionized government employee than a family member who is your employee.

I recently read an interesting article that deals with this topic in the New York Times on February 11, 2010, entitled “Fire Your Relatives. Scare Your Employees. And Stop Whining” by Kermit Pattison. (Click here to read).

While some of his suggestions may be too aggressive for your average small business owner, they get right down to my point.

As a business owner you are either in it to win it or you are not.

Which are you?

New Energy Credits Available on your 2009 Michigan Tax Return

Jay Kossen, CPA — Fri, 05 Feb 2010 14:18:04 +0000

There are two new energy credits available to eligible taxpayers on their 2009, 2010 & 2011 Michigan tax returns. I am frankly shocked that these two credits where maintained during the budget cuts that came out of Lansing in October. In fact the state would have been far better off taking the tax monies from these credits and transferring them to its national award wining “Pure Michigan” advertising campaign.

Home Improvement/Appliance Credit

The credit is equal to 10% of EPA energy star certified appliances; the maximum credit is $75 for single taxpayers and $150 for married tax payers. This credit can be claimed on Michigan form 4764.

Energy Cost Recovery Surcharge Credit:

This non-refundable credit is available to both homeowners and renters who pay electric bills and is capped at $9 per meter in 2009. This credit can be claimed on Michigan Schedule 2.

For more information on these credits, including eligibility and income limitations please visit click here to visit the Michigan.gov taxes page.