Another day in paradise

Sitting here on my patio today, temperature suppose to get up to 72 degrees, after the cold snap we have experienced for the past 10 days this is heaven. 

We left off yesterday talking about the new tax changes for tax year 2011, so lets continue. 

Electronic Funds Transfer Rules

As of the first of this year all employers must use EFT to make all federal tax deposits.  This will include employment tax, excise tax and your corporate income tax.  This is screwing over the banks where you used to have to make a manual deposit, and then the bank got the float on your money until the IRS took the money from the bank.  I know we all feel sorry about the banks loosing this perk, especially after earnings reports today.

Mileage Rates Are Up

The mileage allowance for owned or leased autos is up one penny to 51cents per mile.  If you are using your personal car for medical care, the rate is 19 cents per mile.  Remember though that you must have proper documentation in case you are audited.  The IRS can accuse you of fraud if you do not have this documentation.  It is not hard to keep a log, but you have to learn apply.  There is a set of 8 CD's and a big workbook, called Tax Secrets for Business Professionals, that shows you how to maintain a proper log.  if you would like to know more about this neat set call Raven Johnson at 800.938.9513 and she can tell you all about it.

Basis Overstatement can Trigger 6-year Limitation Period

Ok so we save the biggest one for last!  The IRS has indicated that an understated amount of gross income reported on a return which results from an overstatement of unrecoverable cost or other basis is an omission of gross income which triggers a 6-year period for the IRS to assess tax, rather than the more normal 3-year period.  This limitation period applies when you omit an amount from your gross income that is greater than 25% of the amount you have entered in your return.

Extended Due Date for Your Return This Year

Because of the Emancipation Day Holiday in the District of Columbia, the due date for Form 1040 is April 18th instead of April 15th for all taxpayers.

Have a great weekend, we'll talk next week.