Tax Audit Red Flag – Exaggerated Charitable Donations
For the average person, there’s nothing more terrifying than the thought of getting an IRS audit. For some people, it ranks right up there with fears of dentists, flying, and clowns.
This installment of tax audit red flags focuses on charitable donations. No, this is not to say you shouldn’t give to charity. It’s just to remind you that if you aren’t careful in your giving, you could be bringing a little undesired attention upon yourself by the IRS. Continue reading
How to Enter CEREC Purchase Into QuickBooks
We were recently approached by a dentist who bought a used CEREC and put it on a newly opened rewards credit card at 0% for 12 months. They were planning on paying $2,000 -3,000 per month and do a balloon payment at the end, but weren’t sure how to enter it into QuickBooks. He admitted that while his balance sheet is far from perfect, he tried to ensure his reporting was at least accurate. He did not want to enter a $45,000 laboratory charge as it would screw up his reporting and be inaccurate from an accounting perspective. He wanted the monthly payments to be classified as Lab Expenses, but wasn’t sure exactly what to do. Continue reading
Key Tax Provisions of the “Fiscal Cliff”
The bill that congress passed and the president promised he will sign to avoid the dramatic rise in income tax rates AKA as the fiscal cliff will raise taxes on the nation’s highest earners while extending and making permanent most of the Bush era tax cuts. Here is a summary of key tax provisions:
- Tax rates for single individuals making $400,000 and married couples making $450,000 will be increased to 39.6% indexed for inflation.
- For those taxpayers in the 39.6% bracket, long-term capital gains and qualified dividend tax rates will rise from 15% to 20%.
- For all other taxpayers, the Bush tax cuts from 2001 and 2003 will be made permanent.
- Phaseouts for itemized deductions and personal exemptions will be reinstated for couples making over $300,000 and single taxpayers making $250,000.
- Fixes AMT patch for 2012 and adjusts the exemption amounts permanently.
- Code Section 179 asset expensing will be extended at $500,000 for 2013.
- Extends 50% bonus depreciation through 2013.
- Estate tax rates will rise to 40% but the exemption amount will remain at $5 million per spouse adjusted for inflation.
If you have questions about this topic, please feel free to contact us via email or phone, 559-436-8907.
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