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

Therefore, pursuant to Michigan statute enacting Proposal A of 1994, the 2012 taxable value for your property, absent a transfer of the property in 2011, will be equal to the lesser of:

(a) the 2012 State Equalized Value; or

(b) the 2011 Taxable Value, multiplied by 1.027.

For example, if your 2011 Taxable Value was $100,000, and your 2012 State Equalized Value is $105,000, your 2012 Taxable Value will be $102,700 ($100,000 multiplied by 1.027).

However, if your 2011 Taxable Value was 100,000, and your 2012 State Equalized Value is 100,000, your 2012 Taxable Value will be $100,000 (as your SEV is lower than $102,700).

If you have any questions about your 2012 taxable value calculation, or you believe your 2012 assessment is too high, please contact David Nykanen of the Demorest Law Firm.

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

Wouldn’t it be great if you had a second chance? Of course it would be. We all love to play Monday morning quarterback. If you converted an IRA to a Roth IRA during 2010 you still have a second chance to undo this conversion if you need to. However you only have until Monday October 17th, 2011 to make this decision.

Susan Tompor’s article in the Detroit Free Press did an excellent job of the issues to consider should you wish to exercise this second chance.

To access her article please copy the following link into your web browser.

http://www.freep.com/apps/pbcs.dll/article?AID=2011110020468

The IRS has announced a voluntary program that provides an opportunity for taxpayers to reclassify their workers for employment tax purposes. The contractor vs. employee controversy is one that has been on the radar screen for the IRS for decades, however, the actual attempts by the government to convert contractors to employees for payroll tax purposes, in our experience, have been few and far between.

The government of course would convert everyone paid by employers from contractor to employee status for one simple reason; for 2011 it adds roughly 12.4% of the Social Security wage base ($106,800 in 2011) to the federal coffers in the form of Social Security for each conversion. Certainly you could argue that this is nothing more than another money grab by the federal government to further fund its failed financial policies but it’s also a reflection of the inability of the IRS to prevail on audit when this item is raised as an issue.

Sarah Needleman and Emily Maltby in their article “Price of Reclassifying Workers” do a very nice job at providing background on the controversy and shed insight as to small businesses view on the matter.

In our opinion, whether you like our governments tactics for extracting more money from employers, or care much about its intentions, this is an opportunity for those businesses that feel exposed by this matter to “come clean” for a relatively modest amount.

See the Needleman/Maltby article at;

http://online.wsj.com/article/SB10001424053111903791504576588811797594764.html?mod=dist_smartbrief