Anaheim Rotary Enterprise Zone Presentation

ELLS Shareholder Greg Lewis, Director of Marketing Lindsay Conderman, Anaheim Rotary President Greg Smith, ELLS Tax Manager Carol Painter and Shareholder Ed Lieber posed for a picture after the ELLS’ Anaheim Enterprise Zone Presentation. ELLS shared information about business/employee eligiblity, calculation of credits and other tax advantages to the Anaheim Enterprise Zone.

For more information about the Anaheim Enterprise Zone ELLS CPAs at 714.569.1000.

Maria T. Arriola, CPA

For more information about the IRS filing requirements, call Maria Arriola at 714.569.1000.

Posted 7/29/11

Sherry Radmore, CPA, MST

The Internal Revenue Service does not make contact with taxpayers regarding EFTPS via email or tax account matters. If you receive an email report it to phishing@irs.gov

Posted 7/26/2011

Sherry Radmore, CPA, MST

Posted 5/19/2011

The system in which the IRS has set up to receive such payments is Electronic Federal Tax Payment System (EFTPS). The process of enrolling in EFTPS take about 15 days so make sure that you are allowing yourself plenty of time before the due date.

For individuals, electronic payment is optional. However, for self employed individuals with payroll tax deposits EFTPS is mandatory.

For the state of California, individual tax payers are obligated to use Electronic Funds Transfer (EFT) if the make a single estimated tax or extension payment greater than $20,000 for a taxable year beginning on or after January 1, 2009 or if they filed an original return with a tax liability greater than $80,000 for a taxable year beginning on or after January 1, 2009. If the taxpayer meets either of these tests, all future payments must be made electronically. The Franchise Tax Board will not penalize tax payers would did not use EFT in 2009 and 2010 however they will begin assessing penalties from January 1, 2011 onward.

Be aware that utilizing a banks online bill pay to make payments is not electronic payment. You must use the Franchise Tax Board’s web pay and for federal tax you must use EFTPS.

If you need more information or have questions please call Ron Stumpf at 714.569.1000.

California has taken a different approach to stimulating jobs. In February 2009, the Legislature approved $400 million in state income tax credits to small businesses with 20 employees or less that increased their full-time workforce in 2009. The tax credit is worth up to $3,000 for each new full-time worker, pro-rated for the worker’s length of service. Businesses claim the credit when they file their 2009 tax returns. As of March 20, 2010, only $13.7 million has been claimed.

To check the running tally and for more detailed information about this state tax credit, click here, for a direct link to the Franchise Tax Board’s site on this legislation. If any of the $400 million is left over, it will go to small businesses that increase their full-time workforce in 2010. If your company is larger than 20 employees, you haven’t been forgotten. Companies of all sizes that are located within the Santa Ana Enterprise Zone can qualify for lucrative hiring credits that can span a five-year period.

Your ELLS adviser can assist you in identifying qualified new hires and prepare and complete the forms that are required to earn these credits. Be sure to mention any new hires during your tax appointment! Call 714-569-1000 for immediate assistance.

We’ve just finished a year when we’ve been bruised and battered as we’ve all worked to keep our businesses open. This is definitely the time to “make lemonade out of lemons” and get busy on planning for a better year ahead.

If concentrating on your bottom line gets you depressed, and you know you’ve instituted every cost-saving measure you can think of, then shift your focus to the top line … gross sales. It’s absolutely essential that you keep your current customers happy so they don’t go shopping around. Call them and meet with each one of them face-to-face and discuss how you can help each other. Empower your employees to immediately respond to complaints and solve them to the customer’s satisfaction. Make sure you are taking advantage of every opportunity to increase the value of your current customers: encourage customer feedback to see what they really value and then give it to them.

Review your business plan with your ELLS advisor. Set goals that are realistic and achievable and share these goals with your employees. Provide them with the tools they will need to meet your expectations.

Be vigilant about backing up data. Commit to make better use of technology to keep your business protected from possible failure. Remember, living in California can mean you’re just a minute away from a natural disaster of some sort. Affordable off-site backup system protect you even further by storing your critical data at another location. Your ELLS advisor can assist you in finding the right solution to your needs.

Approach 2010 as a new beginning and an opportunity to create new ways to grow and prosper. Your ELLS advisor is here to help in whatever way we can. If you have any questions please feel free to give us a call.

New Sales Tax deduction for motor vehicles! Whether you itemize or take the standard deduction, you can increase your deduction by the amount of sales tax you paid on the purchase of any number of new motor vehicles (including motorcycles and motor homes) that were purchased after February 16 th and before December 31 st 2009. Sales tax on only the first $49,500 of purchase price qualifies. The phase out begins at $250,000 (married) or $125,000 (single) taxpayers.

Energy-saving tax credits: The credit percentages for building envelope components (windows, doors) is now 30% and the maximum credit is $1,500. Also applies to furnaces, furnace fans, central a/c and water heaters. Credit is available in 2010 and there is no phase out.

Employers who offer Flexible Spending Accounts: As part of their Cafeteria Plan have until Dec 31 st to change the rules to enable employees to have another 2 ½ months in 2010 to spend their 2009 allotments. The first $13,000 of gifts ($26,000 for married couples) made by a donor to each donee in calendar year 2009 is excluded from the amount of the donor’s taxable gifts. You must act no later than Dec 31 st to take complete advantage of annual gift tax exclusions. Unused annual exclusions can’t be carried over and are forever lost. The check must be presented in the calendar year for which completed gift treatment is sought. The donee should be sure to deposit and cash the check before year-end, so that there’s no doubt as to when the gift was made.

Machinery and Equipment: Most new machinery and equipment (as well as software) bought and placed in service in 2009 qualifies for a 5 0% bonus first year depreciation deduction. This benefit has not yet been extended beyond 2009. I ndividual taxpayers who are at least 70 ½ years old may contribute to charities directly from their IRAs without having the amount of their contribution included in their gross income. High-income taxpayers who are over AGI limits for a Cloverdell Education Savings Account (CESA) can contribute to a qualified 529 tuition plan instead. There are no AGI limits on contributions to 529 plans. Distributions from 529 plans are tax free only if used to pay for higher education.

Businesses of all sizes can now carry back operating losses for up to five years: To claim a full deduction on the 2009 return for a contribution of “qualified appreciated stock” to a private foundation, the private foundation must be set up and the contribution made before December 31, 2009 . A self-employed person who wants to contribute to a Keogh plan for 2009 must establish that plan before the end of 2009. If that is done, deductible contributions for 2009 can be made as late as the taxpayers extended tax return due date for 2009. Business taxpayers can claim a deduction under Code Section 199 to offset income from domestic manufacturing and other domestic production activities . Since the rate of deduction will increase to 9% in 2010from 6% in 2009, taxpayers in this case should consider deferring some of their domestic production activity income from 2009 to 2010. Again, check with your ELLS advisor for further details on any of the above tax-saving strategies.

If you have any questions about these or any other tax credits or deductions please contact us at anytime.

Maria Arriola with Dave Wilkins of Transamerica Retirement Services

On Thursday, Nov. 5 th our very own Maria T. Arriola stole the show at the Transamerica Retirement Services Breakfast for Financial Advisers.

The presentation was attended by over 30 different businesses that operate in the retirement services arena and Maria was invited to co-present along with Dave Wilkins, Regional Vice President of Transamerica Retirement Services.

A gifted speaker, Maria talked about 401k ERISA audits and the importance of having a good working relationship with your auditor and third party administrator. She also recommended these three steps to help keep the process as smooth as possible: 1) Amend the plan to force out terminated employees with an account balance of less than $5,000. 2) Carefully review the participant list to ensure only eligible employees are included in the participant count. 3) Qualifying companies should take advantage of the 80-120 exemption and elect to be treated as a small company.

The presentation also went into detail on common errors in ERISA audits. Of particular note were errors in the handling of employee contributions, the new changes to EFAST/EFAST2 (ERISA Filing Acceptance System), and making sure the census information is filled out correctly.

Overall the presentation went very well and Maria has already given another one and fielded several offers to give more.

If you require a 401k pension audit or have any questions regarding them please feel free to contact Maria at ELLS CPA’s.