• Personal exemption amount (now $3,800) and standard deduction amounts
• Various credits and other items also were adjusted
• Contribution limits and other amounts for pension plans retirement accounts were increased for 2012
• The Social Security wage base for 2012 is $110,100.
• The standard mileage rate for business use of an automobile remains at 55½ cents; for medical and moving expenses it decreases to 23 cents per mile

 
Capital Gain and Loss Reporting
Taxpayers will have a new form, Form 8949, Sales and Other Dispositions of Capital Assets, to report gains and losses of certain capital assets. The information on Form 8949 will correspond to the new information being reported on 2011 Forms 1099-B, Proceeds from Broker and Barter Exchange Transactions.  The information from that form will then be transferred to a revised Schedule D.
 
The new form came about due to new asset base reporting requirements being imposed on securities brokerages.
 
Veterans Work Opportunity Credits
The work opportunity tax credit (now called the Returning Heroes and Wounded Warriors Work Opportunity Tax Credit) for businesses that hire certain military veterans is extended. Employers will be eligible for a rather large tax credit for each qualified veteran that they hire after the law’s enactment date (Nov. 21, 2011) and before Jan. 1, 2013.
 
Foreign Asset Reporting
Under the Foreign Account Tax Compliance Act, individuals are required to report interests in specified foreign financial assets when filing their federal income tax returns.  This rule is in effect for interest owned in 2011, but there is also a strange twist requiring the reporting of foreign assets held in 2010 with the 2011 return.
 
Bonus Depreciation                                
The 100% first-year bonus depreciation provision expired on Dec. 31, but 50% bonus depreciation is available for property placed in service in 2012.
 
Estate Tax
Estates of decedents who died in 2010 have until Jan. 17, 2012, to elect not to have the estate tax apply and to have heirs’ bases in assets they inherit determined under the modified carryover basis rules.
 
Voluntary Classification Settlement Program
A new voluntary classification settlement program (VCSP) introduced in September allows businesses to reclassify their workers as employees for federal employment tax purposes for future tax periods while receiving relief for part of the tax liability relating to the past treatment of the workers as non employees.  This is not exactly a good thing, just a gentle reminder that the IRS is really seeking to have employees properly classified.

Congress Passes Temporary Payroll Tax Deal

The President is expected to sign the deal soon.  The Senate will appoint members of a House-Senate conference committee to negotiate legislation to extend both benefits through 2012.

Under the deal, the employee’s share of the Social Security payroll tax will stay at the current level, 4.2 percent of wages, through Feb. 29. In the absence of Congressional action, it would revert to the usual 6.2 percent next month. The government will also continue paying unemployment insurance benefits under current policy through February. Without Congressional action, many of the long-term unemployed would begin losing benefits next month.

In addition, under the agreement, Medicare will continue paying doctors at current rates for two months, averting a 27 percent cut that would otherwise occur on Jan. 1.

The new deal makes minor adjustments to make it easier for small businesses to cope with the tax changes and prevents manipulation of an employee’s pay should the tax cut extension fail to go beyond two months.

 If you have any questions or concerns regarding the continuation of the payroll credit, please give us a call (208) 265-5959.

 http://www.cnbc.com/id/44206921
 
Disclaimer:
This information is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and makes no implied or express recommendations concerning the manner in which any client’s account should or would be handled, as appropriate investment strategies depend upon each client’s investment objectives. It is the responsibility of any person or persons in possession of this material to inform themselves of and to take appropriate advice regarding any applicable legal requirements and any applicable taxation regulations which might be relevant to the subscription, purchase, holding, exchange, redemption or disposal of any investments.
 
This information does not constitute a solicitation in any jurisdiction in which such a solicitation is unlawful or to any person to whom it is unlawful. Moreover, this information neither constitutes an offer to enter into an investment agreement with the recipient of this document nor an invitation to respond to the document by making an offer to enter into an investment agreement.
 

• QuickBooks Overview                         

This class is designed for new QuickBooks users.  It will provide an overview of QuickBooks features and functionality with some hands-on training to get you started using the software.  You will get an idea of how this easy to use accounting program can make it a snap to track the finances of a small business and learn how to navigate the various functions, including lists, forms and registers.  Course materials are included.  $99                  

Tuesday & Thursday  -  Sept 27^th & Sept 29^th                       

6:00 to 9:00 pm

•  QuickBooks Pro 2011                                     

This fast-paced course for experienced QuickBooks users will give you hands-on and in-depth knowledge of this complete accounting package designed for small business.  Begin by setting up a small company using the Easy Step Interview.  Customize the chart of accounts and other features to suit the business’ unique needs.  Learn basic vendor and customer transactions and how to customize reports.  Prerequisite:  Computer accounting or bookkeeping, and/or QuickBooks experience.  Textbook is included.  $199

Tuesday & Thursday  -   Oct 4^th to Oct 20^th

 6:00 to 9:00 pm

• QuickBooks Payroll                               

Perform payroll in QuickBooks.  Learn how to set up payroll items, pay employees, track and pay payroll liabilities, process quarterly and annual payroll reports and forms.  Bring your list of “How do I do/fix this?” questions.  Prerequisite:  Prior QuickBooks and payroll experience, or recent completion of QuickBooks Pro class.  $99

Tuesday & Thursday  -   Oct 25^th & Oct 27^th        

6:00 to 9:00 pm

Enroll online at http://www.workforcetraining.nic.edu/

Or call (208) 769-3333

Classes offered at the work force Training Center at the Bonner Mall

• Simplify your life – let us do your payroll for you.  No more worries about due dates, quarterly reports and year-end headaches.
• Does your bookkeeper need a vacation?  We can fill in and take care of payroll, invoice your customers and pay your bills while she’s gone.  Plus it’s always a good idea to have a fresh pair of eyes look at your accounts once in a while.
• Have you stopped reconciling your bank account because you can’t make it balance?  Let us help – we have lots of experience reconciling several months or a year at a time.  We can give you some tips and tricks to get you back on track.
• Do you know you should be tracking inventory but think it’s too complicated?  We can help you decide how much information you need, help you set it up, teach you how to use it, and show you how to make the most out of the reports.
• Do you need the expertise of a Chief Financial Officer but not every day?  We can provide a highly experienced CFO to help you manage your business and you pay only for the hours you need.
• Do you use QuickBooks?  It may be time for a tune-up.  We can help you save time, stay organized, streamline your workflow.
• Do you want customized information, budget reports, cash projections or cash flow statements?  We can show you how to memorize them so they are always at your fingertips. 
• Do you want to customize your invoices but don’t know how?  It’s a snap, let us show you.
• Thinking about QuickBooks?  Now is the time – Our office or yours.
• Choose the right version for your business
• Get setup and running in no time
• Staff training is our specialty

Three QuickBooks ProAdvisors on staff so there is always someone available to help.

The global focus now shifts to our federal debt ceiling. Congress is trying to come to an agreement on spending cuts in order to raise the debt ceiling. So far, politics is getting in the way. Most experts agree that failing to raise the debt ceiling would be hugely disruptive to global financial markets. We keep our fingers crossed that common sense prevails and an agreement can be reached well before early August (the date a technical default would occur).

Last week we saw surprisingly good economic data. Manufacturing showed a better than expected rebound. Many believe the poor May data was a result of temporary issues such as the Japan natural disaster. The employment reports are released this week as well as the Institute for Supply Management’s Non-Manufacturing survey. We are eager to see if upcoming data releases confirm the “temporary soft” patch theory. If economic releases continue to surprise to the upside, we could see the equity markets move higher.

We continue to keep protective stop-loss orders on a large percentage of our equity holdings. This bull market is getting a little “long in the tooth” and there are a number of headwinds to be concerned about. Taking on a lot of risk at this stage is not warranted in most situations. However, maintaining target asset allocations is still appropriate provided you have some downside protection. Trailing stop-orders allow you to keep a “floor” under investment holdings. Last week’s rally allowed us to bump our stop orders up as our positions moved higher. We will continue to do so if markets keep moving higher.

The new optional standard mileage rates can be used by taxpayers to calculate the deductible costs of operating an automobile. Taxpayers can still choose to use their actual costs, but must maintain adequate records and be able to substantiate their expenses.

The standard mileage rate is also used as a benchmark by many businesses to reimburse their employees for mileage.  Workers do not have to report mileage reimbursement as income as long as the payments do not exceed the standard mileage rate set by the IRS.

The standard mileage rate for services to charitable organizations is set by statute at 14 cents per mile and remains unchanged.

The former rates (51 cents per mile for business use, 19 cents per mile for medical and moving expenses) will still apply to expenses incurred before July 1, 2011.

Why the Market Worrywarts Are Wrong

by Dave Kansas

The selloff has emboldened bears, but they’re overlooking a number of positive signs.

This week’s market selloff has brought a sloth of bears out of hiding.

All of a sudden, they have plenty of ammunition. The jobs picture, as the May employment report showed, has taken a turn for the worse. The housing market is, remarkably, looking even grimmer. Manufacturing activity, a core area of growth, has slowed. Toss in the euro-zone fiscal follies and the U.S. debate (or lack thereof) on the federal debt limit, and it’s tempting to start stocking up on canned goods.

That kind of thinking is permeating the Treasury market. The benchmark 10-year bond yield, which moves in the opposite direction of its price, has dropped below 3% for the first time since late last year. A yield that low is generally associated with horrible economic prospects and maybe even a whiff of deflation.

Bulls have started talking feverishly about a need for another Federal Reserve bond-purchasing program to kick in after the current program, dubbed QE2, ends later this month. The Fed, however, has signaled it’s not very interested in QE3. In other words, the training wheels are going to start coming off the market.

As is often the case, sentiment has swung sharply, in a thundering, herd-style manner. Just about everything is now getting viewed through a lens of glumness. But the market isn’t emitting universally negative signals. Indeed, there are a number of positive factors getting overlooked.

Growth is indeed slowing. But a number of data points remain positive. Manufacturing, while weaker, continues to expand. Online help-wanted ads jumped 148,000 to 4.5 million in May, according to the Conference Board. The ISM Non-Manufacturing Index for May provided a rare upside surprise Friday.

Those aren’t exactly gaudy figures, but overlooked is the high likelihood that a big portion of the current sluggishness has a temporary flavor. In our quick-to-forget world, investors keep underestimating the impact of the March Japanese earthquake. Supply-chain problems have hit the auto and technology sector, in particular. A Ford Motor executive said this week that the quake reduced U.S. supply by as much as 400,000 vehicles in the second quarter.

But the earthquake issues are steadily getting resolved. Auto companies are moving closer to full production and technology firms are revamping supply lines to get their businesses back on track. The Bank of Japan said early this week that supply issues were improving more quickly than initially expected.

Higher commodity prices are providing a second headwind. But as we’ve seen in the past few weeks, commodity prices retreat when growth slows. As those prices come down, all things being equal, growth prospects improve. It gets cheaper to fuel planes, make shirts and drive trucks. Goldman Sachs Group recently turned bullish on commodities, arguing that the recent downdraft in prices would help reignite growth, which would push commodity prices higher again.

That rebound hasn’t yet fully taken shape, but some commodities have popped off their lows. Copper, for instance, bottomed at $3.91 a pound on May 11. Since then, it has rallied back above $4 and traded at $4.11 on Friday. Economists like to call the base metal Dr. Copper, because of its uncanny ability to forecast growth.

Recent market action also contains kernels of cheeriness. During Wednesday’s selloff, there were 101 new 52-week highs and 39 new 52-week lows. More new highs than new lows is usually a harbinger of better times ahead.

On Thursday and Friday, battered economically sensitive stocks demonstrated surprising resilience. And tech stocks, a crucial leadership group, outperformed. And Friday’s bounce from an early downdraft following the weak May jobs report might hint that the nervous Nellies may not have such a strong case after all.

And thanks to strong corporate profits, stocks have gotten cheaper. The Standard & Poor’s 500-stock index’s forward price/earnings ratio is 16.4, which could be considered cheap in the current low-interest rate environment. One year ago, the P/E was 18.3.

Analysts have solidified their view that the second half will be solid, if not strong. According to Yardeni Research, earnings forecasts for the third and fourth quarters have moved higher in recent weeks. Revenue forecasts for the second, third and fourth quarters have also increased.

Lastly, short-term interest rates — heck, all interest rates — remain exceedingly low. The Fed’s QE2 program may end this month, but short-term rates aren’t expected to start rising until a year from now, at the earliest. Such low rates make the stock market inherently more attractive.

Against the widespread gloom, Union Pacific’s CEO Jim Young, speaking Thursday in New York, offered a jarring view: “I have not seen anything that tells me the economy is slowing down.”

The economic worrywarts won’t like to hear that.

Other forms and schedules affected by the 2010 Tax Relief Act are:

• Educator Expense Deduction
• Casualties and Thefts
• District of Columbia First-Time Homebuyer Credit
• General Business Credit
• First-Time Homebuyer Credit and Repayment of the Credit
• Alcohol and Cellulosic Biofuel Fuels Credit
• Qualified Plug-In Electric and Electric Vehicle Credit
• Alternative Motor Vehicle Credit
• Qualified Plug-In Electric Drive Motor Vehicle Credit

Have questions about filing deadlines that may affect you? Please don’t hesitate to contact us»