Theresa Arndt, CPA

In about three weeks, Black Friday 2011 will officially be underway. For decades this has been the busiest shopping day of the year.   But there is another day that many of you are looking forward to:   Cyber Monday. Cyber Monday is the e-based alternative to Black Friday.   It falls on the Monday after Thanksgiving and is the biggest online shopping day of the year.   Hundreds of online retailers participate.   Experts say that in many cases you get a better deal making your purchase on Cyber Monday than on Black Friday.   What does all of this have to do with taxes?   Well, if you plan to scoop up some of those deals on Cyber Monday, chances are good that it will be from a retailer that is not required to charge you sales tax.   And that is a hot topic right now. Does this mean that you are off the hook for paying the sales tax if weren’t charged for it?   No.   According to Missouri law, you are supposed to declare that ...

In June, the IRS announced an increase in the standard mileage rates for the final six months of 2011 .    In their news announcement, the IRS wrote, “This year’s increased gas prices are having a major impact on individual Americans so the IRS is adjusting the standard mileage rates to better reflect them.” For your convenience, here are the mileage rates for 2011: ·          Business: 55.5 cents per mile (Compared to 51 cents for 1 st six months) ·          Medical: 23.5 cents per mile (Compared to 19 cents for 1 st six months) ·          Moving: 23.5 cents per mile (Compared to 19 cents for 1 st six months) ·          Charitable: 14 cents per mile (Unchanged) Taxpayers can use one of two methods to deduct vehicles expenses: standard mileage rate and actual expense method.   Traditionally I have ...

According to a Treasury report last month, taxpayers wrongly received nearly $3.2 billion in American Opportunity Tax Credits (AOC) between Jan. 1, 2010 and May 28, 2010 .    The report attributes the error to ineffective IRS procedures for the review of education credits.   The Treasury has forecasted that an additional $12.8 billion in wrongfully claimed education credits will be granted over the next four years unless the current system of review is modified. Here is a breakdown of the errors: ·          $2.6 billion to 1.7 million individuals who weren’t even attending college ·          $550 million went to students who didn’t attend school at least half-time or who were in graduate school, both contrary to the tax laws ·          $88 million to students who were claimed as dependents on someone else’s tax return ·    ...

This month the first cars to be fully powered by electricity were released by many of the major auto makers. The new fully electrical vehicles, the Chevy Volt and Nissan Leaf, have no drivetrain and no combustion engine. They are leading the way for the new green revolution in the auto industry. Uncle Sam has promised big tax credits of up to $7,500 for those who purchase any of the new electric models.   This is an attempt to increase consumer interest in green technology.   At the moment consumers are concerned about battery life and whether the infrastructure is in place to support an electric vehicle.   But these big tax breaks may be just enough to make you take a second look. If you are thinking about buying a green vehicle, here is what you need to know.   How much is the credit: This credit is up to $7,500.   A credit is worth more than a deduction; how so?   A deduction reduces your taxable income, so the value depends on your tax brack...

Part of being a good CPA partner to my client’s businesses is keeping track of industry trends that can eat into their bottom line.   Many of my clients are in the construction industry so today’s topic is of particular interest to them. The residential construction industry is receiving a lot of unwanted attention from OSHA for the first time.   Injuries on residential projects have increased and now OSHA has named the Residential Construction Industry as a target industry In December 2010, OSHA introduced stronger worker safeguards to prevent falls in residential construction.   The new standards for residential construction were scheduled to go into effect on June 15, 2011, but OSHA announced a three-month phase in to allow employers time to gear up to meet the compliance requirements.   The phase in period is over and the new directive is now fully in place as of September 15, 2011. If you are a residential contractor, general or sub, are you in complia...

As year-end approaches many of my clients start thinking about next year’s tax bill and what they can do to manage it.   Since the business use of a vehicle can be one of the larger deductions, a new set of wheels is usually the first to come to their mind.   That’s why it doesn’t surprise me when a client calls to ask if he can buy a new $40,000 car for his business and write the whole thing off.     Thanks to some new tax breaks this year, you actually can write off the full cost of purchasing a new luxury SUV – provided it’s used 100% for business and its gross vehicle weight is more than 6,000 pounds.   The vehicles that qualify for the 100% write off are gas guzzlers, but your business may have a need to haul people and materials and can justify the extra fuel costs. For lighter SUVs, passenger cars and light trucks the first-year depreciation is much smaller.   Example 1: Your business buys a new $89,200 BMW X6M and uses it 100% for ...