IRS Releases Form to Help Small Businesses Claim New Health Care Tax Credit

IRS Also Announces How Tax-Exempt Organizations Will Claim Credit

WASHINGTON –– The Internal Revenue Service today released a draft version of the form that small businesses and tax-exempt organizations will use to calculate the small business health care tax credit when they file income tax returns next year. The IRS also announced how eligible tax-exempt organizations –– which do not generally file income tax returns –– will claim the credit during the 2011 filing season.

The IRS has posted a draft of Form 8941 on IRS.gov. Both small businesses and tax-exempt organizations will use the form to calculate the credit. A small business will then include the amount of the credit as part of the general business credit on its income tax return.

Tax-exempt organizations will instead claim the small business health care tax credit on a revised Form 990-T. The Form 990-T is currently used by tax-exempt organizations to report and pay the tax on unrelated business income. Form 990-T will be revised for the 2011 filing season to enable eligible tax-exempt organizations –– even those that owe no tax on unrelated business income –– also to claim the small business health care tax credit.

The final version of Form 8941 and its instructions will be available later this year.

The small business health care tax credit was included in the Affordable Care Act signed by the President in March and is effective this year. The credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.

In 2010, the credit is generally available to small employers that contribute an amount equivalent to at least half the cost of single coverage towards buying health insurance for their employees. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ moderate- and lower-income workers.

For tax years 2010 to 2013, the maximum credit is 35 percent of premiums paid by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. Beginning in 2014, the maximum tax credit will go up to 50 percent of premiums paid by eligible small business employers and 35 percent of premiums paid by eligible, tax-exempt organizations for two years.  The maximum credit goes to smaller employers ¬¬–– those with 10 or fewer full-time equivalent (FTE) employees ––¬¬ paying annual average wages of $25,000 or less.

The credit is completely phased out for employers that have 25 FTEs or more or that pay average wages of $50,000 per year or more. Because the eligibility rules are based in part on the number of FTEs, and not simply the number of employees, businesses that use part-time help may qualify even if they employ more than 25 individuals.

More information about the credit, including a step-by-step guide and answers to frequently asked questions, is available on the Affordable Care Act page on the IRS website.

Calculate Health Care Tax Credit

IRS Releases Form to Help Small Employers Calculate New Health Care Tax Credit, Announces How Tax-Exempts Will Claim Refundable Credit

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The IRS today announced the release of a draft version of the Form 8941 that both small businesses and tax-exempt organizations will use to calculate the small business health care tax credit during the 2011 tax season.  The credit is designed to encourage small employers to offer health insurance coverage or maintain the coverage they currently offer their employees.

While small businesses will include the amount of the credit as part of the general business credit on their tax returns, tax-exempt organizations eligible for the refundable credit will claim the credit on a revised Form 990-T. The revised Form 990-T will enable eligible tax-exempt organizations to claim the tax credit even though they owe no tax on unrelated business income.

Five Tax Tips for Recently Married Taxpayers

Are you getting married this summer?  If you recently got married or are planning a wedding, the last thing on your mind is taxes.  However, there are some important steps you need to take to avoid stress at tax time. Here are five tips from the IRS for newlyweds to keep in mind.

1. Notify the Social Security Administration Report any name change to the Social Security Administration, so your name and Social Security Number will match when you file your next tax return. Informing the SSA of a name change is quite simple. File a Form SS-5, Application for a Social Security Card, at your local SSA office. The form is available on SSA’s website at www.socialsecurity.gov, by calling 800-772-1213 or at local offices.
2. Notify the IRS If you have a new address you should notify the IRS by sending Form 8822, Change of Address. You may download Form 8822 from IRS.gov or order it by calling 800–TAX–FORM (800–829–3676).
3. Notify the U.S.Postal Service You should also notify the U.S. Postal Service when you move so it can forward any IRS correspondence.
4. Notify Your Employer Report any name and address changes to your employer(s) to make sure you receive your Form W-2, Wage and Tax Statement, after the end of the year.
5. Check Your Withholding If both you and your spouse work, your combined income may place you in a higher tax bracket. You can use the IRS Withholding Calculator available on IRS.gov to assist you in determining the correct amount of withholding needed for your new filing status. The IRS Withholding Calculator will even provide you with a new Form W-4, Employee's Withholding Allowance Certificate, you can print out and give to your employer so they can withhold the correct amount from your pay.

Keeping Good Records Reduces Stress at Tax Time

You may not be thinking about your tax return right now, but summer is a great time to start planning for next year and to make sure your records are organized.  Maintaining good records now can make filing your return a lot easier and it will help you remember transactions you made during the year.

Here are a few things the IRS wants you to know about recordkeeping.

Keeping well-organized records also ensures you can answer questions if your return is selected for examination or prepare a response if you receive an IRS notice. In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, you should keep any and all documents that may have an impact on your federal tax return.

Individual taxpayers should usually keep the following records supporting items on their tax returns for at least three years:

• Bills
• Credit card and other receipts
• Invoices
• Mileage logs
• Canceled, imaged or substitute checks or any other proof of payment
• Any other records to support deductions or credits you claim on your return

You should normally keep records relating to property until at least three years after you sell or otherwise dispose of the property. Examples include:

• A home purchase or improvement
• Stocks and other investments
• Individual Retirement Arrangement transactions
• Rental property records

If you are a small business owner, you must keep all your employment tax records for at least four years after the tax becomes due or is paid, whichever is later. Examples of important documents business owners should keep Include:

• Gross receipts: Cash register tapes, bank deposit slips, receipt books, invoices, credit card charge slips and Forms 1099-MISC
• Proof of purchases: Canceled checks, cash register tape receipts, credit card sales slips and invoices
• Expense documents: Canceled checks, cash register tapes, account statements, credit card sales slips, invoices and petty cash slips for small cash payments
• Documents to verify your assets: Purchase and sales invoices, real estate closing statements and canceled checks

For more information about recordkeeping, check out IRS Publications 552, Recordkeeping for Individuals, 583, Starting a Business and Keeping Records, and Publication 463, Travel, Entertainment, Gift, and Car Expenses. These publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Keeping Good Records Reduces Stress at Tax Time

You may not be thinking about your tax return right now, but summer is a great time to start planning for next year and to make sure your records are organized.  Maintaining good records now can make filing your return a lot easier and it will help you remember transactions you made during the year.

Here are a few things the IRS wants you to know about recordkeeping.

Keeping well-organized records also ensures you can answer questions if your return is selected for examination or prepare a response if you receive an IRS notice. In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, you should keep any and all documents that may have an impact on your federal tax return.

Individual taxpayers should usually keep the following records supporting items on their tax returns for at least three years:

• Bills
• Credit card and other receipts
• Invoices
• Mileage logs
• Canceled, imaged or substitute checks or any other proof of payment
• Any other records to support deductions or credits you claim on your return

You should normally keep records relating to property until at least three years after you sell or otherwise dispose of the property. Examples include:

• A home purchase or improvement
• Stocks and other investments
• Individual Retirement Arrangement transactions
• Rental property records

If you are a small business owner, you must keep all your employment tax records for at least four years after the tax becomes due or is paid, whichever is later. Examples of important documents business owners should keep Include:

• Gross receipts: Cash register tapes, bank deposit slips, receipt books, invoices, credit card charge slips and Forms 1099-MISC
• Proof of purchases: Canceled checks, cash register tape receipts, credit card sales slips and invoices
• Expense documents: Canceled checks, cash register tapes, account statements, credit card sales slips, invoices and petty cash slips for small cash payments
• Documents to verify your assets: Purchase and sales invoices, real estate closing statements and canceled checks

For more information about recordkeeping, check out IRS Publications 552, Recordkeeping for Individuals, 583, Starting a Business and Keeping Records, and Publication 463, Travel, Entertainment, Gift, and Car Expenses. These publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Do you need to Amend your Return?

 

IRS Summertime Tax Tip 2010-12

If you forgot to include some income or to take a deduction on your tax return – you can correct it by amending your tax return.

In some cases, you do not need to amend your tax return. The Internal Revenue Service usually corrects math errors or requests missing forms – such as W-2s or schedules – when processing an original return. In these instances, do not amend your return.

However, you should file an amended return if any of the following were reported incorrectly:

• Your filing status
• Your dependents
• Your total income
• Your deductions or credits

You may also elect to amend your 2009 return if you are eligible to claim the first-time homebuyer credit for a qualified 2010 home purchase. The amended tax return will allow you to claim the homebuyer credit on your 2009 return without waiting until next year to claim it on the 2010 return.

Use Form 1040X, Amended U.S. Individual Income Tax Return, to correct a previously filed Form 1040, 1040A or 1040EZ. Be sure to check the box for the year of the return you are amending on the Form 1040X, Line B. If you are amending more than one tax return, prepare a 1040X for each return and mail them in separate envelopes to the appropriate IRS processing center. The 1040X instructions list the addresses for the centers.

The newly revised Form 1040X (Rev. January 2010) now has only one column used to show the corrected figures. There is an area on the front of the form where you explain why you are filing Form 1040X.

If the changes involve other schedules or forms, attach them to the Form 1040X. For example, if you are filing a 1040X because you have a qualifying child and now want to claim the Earned Income Credit, you must attach a Schedule EIC, Earned Income Credit to show the qualifying person's name, year of birth and Social Security number.

If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund. If you owe additional tax for 2009, you should file Form 1040X and pay the tax as soon as possible to limit interest and penalty charges. Interest is charged on any tax not paid by the due date of the original return, without regard to extensions.

Generally, to claim a refund, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later.

Form 1040X and instructions are available at IRS.gov or by calling 800-TAX-FORM    800-829-3676

Links:

Form 1040X, Amended U.S. Individual Income Tax Return

Thinking About Making Some Energy Saving Improvements to Your Home This Summer?

Seven Facts about the Nonbusiness Energy Property Credit

Thinking about making some energy saving improvements to your home this summer? Taking some energy saving steps now may lead to bigger tax savings next year. The Nonbusiness Energy Property Credit, a tax credit for making energy efficient improvements to homes was increased as part of the American Recovery and Reinvestment Act of 2009.

Here are seven things the IRS wants you to know about the Nonbusiness Energy Property Credit:

1. The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 claimed for 2009 and 2010 combined.

2. The credit applies to improvements such as adding insulation, energy-efficient exterior windows and energy-efficient heating and air conditioning systems.

3. To qualify as “energy efficient” for purposes of this tax credit, products generally must meet higher standards than the standards for the credit that was available in 2007.

4. Manufacturers must certify that their products meet new standards and they must provide a written statement to the taxpayer such as with the packaging of the product or in a printable format on the manufacturers’ Website.

5. Qualifying improvements must be placed into service after December 31, 2008, and before January 1, 2011.

6. The improvements must be made to the taxpayer’s principal residence located in the United States.

7. To claim the credit, attach Form 5695, Residential Energy Credits to either the 2009 or 2010 tax return. Taxpayers must claim the credit on the tax return for the year that the improvements are made.

Homeowners who have been considering some energy efficient home improvements may find these tax credits will get them bigger tax savings next year.

For more information on this and other key tax provisions of the Recovery Act, visit IRS.gov/recovery.

Links:

Form 5695, Residential Energy Credits ( PDF)

Brief History of IRS

 

Origin
The roots of IRS go back to the Civil War when President Lincoln and Congress, in 1862, created the position of commissioner of Internal Revenue and enacted an income tax to pay war expenses. The income tax was repealed 10 years later. Congress revived the income tax in 1894, but the Supreme Court ruled it unconstitutional the following year.

16th Amendment
In 1913, Wyoming ratified the 16^th Amendment, providing the three-quarter majority of states necessary to amend the Constitution. The 16^th Amendment gave Congress the authority to enact an income tax. That same year, the first Form 1040 appeared after Congress levied a 1 percent tax on net personal incomes above $3,000 with a 6 percent surtax on incomes of more than $500,000.

In 1918, during World War I, the top rate of the income tax rose to 77 percent to help finance the war effort. It dropped sharply in the post-war years, down to 24 percent in 1929, and rose again during the Depression. During World War II, Congress introduced payroll withholding and quarterly tax payments.

• 1913 Form 1040 (PDF 126KB, 4 pages, including instructions)

A New Name
In the 50s, the agency was reorganized to replace a patronage system with career, professional employees. The Bureau of Internal Revenue name was changed to the Internal Revenue Service. Only the IRS commissioner and chief counsel are selected by the president and confirmed by the Senate.

Today’s IRS Organization
The IRS Restructuring and Reform Act of 1998 prompted the most comprehensive reorganization and modernization of IRS in nearly half a century. The IRS reorganized itself to closely resemble the private sector model of organizing around customers with similar needs.

Nine Tips for Taxpayers Who Owe Money to the IRS

Did you end up owing taxes this year? The vast majority of Americans get a tax refund from the IRS each spring, but those who receive a bill may not know that the IRS has a number of ways for people to pay. Here are nine tips for taxpayers who owe money to the IRS.

ONE.  If you get a bill this summer for late taxes, you are expected to promptly pay the tax owed including any penalties and interest. If you are unable to pay the amount due, it is often in your best interest to get a loan to pay the bill in full rather than to make installment payments to the IRS.

TWO.  You can also pay the bill with your credit card. The interest rate on a credit card or bank loan may be lower than the combination of interest and penalties imposed by the Internal Revenue Code. To pay by credit card contact one of the following processing companies: Official Payments Corporation at 888-UPAY-TAX (also www.officialpayments.com/fed) or Link2Gov at 888-PAY-1040 (also www.pay1040.com) or RBS WorldPay, Inc at 888-9PAY-TAX (also www.payUSAtax.com).

THREE.  You can pay the balance owed by electronic funds transfer, check, money order, cashier’s check or cash. To pay using electronic funds transfer you can take advantage of the Electronic Federal Tax Payment System by calling 800-555-4477 or online at www.eftps.gov.

FOUR.  An installment agreement may be requested if you cannot pay the liability in full. This is an agreement between you and the IRS to pay the amount due in monthly installment payments. You must first file all returns that are required and be current with estimated tax payments.

FIVE.  If you owe $25,000 or less in combined tax, penalties and interest, you can request an installment agreement using the Online Payment Agreement application at IRS.gov.

SIX.  You can also complete and mail an IRS Form 9465, Installment Agreement Request, along with your bill in the envelope that you have received from the IRS.  The IRS will inform you usually within 30 days whether your request is approved, denied, or if additional information is needed. If the amount you owe is $25,000 or less, provide the highest monthly amount you can pay with your request.

SEVEN.  You may still qualify for an installment agreement if you owe more than $25,000, but a Form 433F, Collection Information Statement, is required to be completed before an installment agreement can be considered. If your balance is over $25,000, consider your financial situation and propose the highest amount possible, as that is how the IRS will arrive at your payment amount based upon your financial information.

EIGHT.  If an agreement is approved, a one-time user fee will be charged.  The user fee for a new agreement is $105 or $52 for agreements where payments are deducted directly from your bank account.  For eligible individuals with incomes at or below certain levels, a reduced fee of $43 will be charged.

NINE.  Taxpayers who have a balance due, may want to consider changing their W-4, Employee’s Withholding Allowance Certificate, with their employer. There is a withholding calculator available on IRS.gov to help taxpayers determine the amount that should be withheld.

For more information about installment agreements and other payment options visit IRS.gov.  IRS Publications 594, The IRS Collection Process and 966, Electronic Choices to Pay All Your Federal Taxes also provide additional information regarding your payment options.  These publications and Form 9465 can be obtained from IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Links:
Publication 594, The IRS Collection Process ( PDF)
Publication 966, Electronic Choices to Pay All Your Federal Taxes ( PDF)
Form 9465, Installment Agreement ( PDF)

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Nine Tips on the 10 Percent Tax on Tanning Services

Starting July 1, 2010, many businesses offering tanning services must collect a 10 percent excise tax on the tanning services they provide. This excise tax requirement is part of the Affordable Care Act that was enacted in March 2010.

Here are nine tips on the tanning excise tax that providers must collect.
Businesses providing ultraviolet tanning services must collect the 10 percent excise tax at the time the customer pays for the tanning services.
If the customer fails to pay the excise tax, the tanning service provider is liable for the tax.

The tax does not apply to phototherapy services performed by a licensed medical professional on his or her premises.

The tax does not apply to spray-on tanning services.

If a payment covers charges for tanning services along with other goods and services, the other goods and services may be excluded from the tax if they are separately stated and the charges do not exceed the fair market value for those other goods and services.

If the customer purchases bundled services and the charges are not separately stated, the tax applies to the portion of the payment that can be reasonably attributed to the indoor tanning services.

The tax does not have to be paid on membership fees for certain qualified physical fitness facilities that offer indoor tanning services as an incidental service to members without a separately identifiable fee.

Tanning service providers must report and pay the excise tax on a quarterly basis.

To pay the tax, businesses must file IRS Form 720, Quarterly Federal Excise Tax Return using an Employer Identification Number assigned by the IRS. Businesses that don’t already have one can apply for an EIN online at IRS.gov.

Find more information about the excise tax on tanning services, IRS Form 720 and other tax provisions of the Affordable Care Act at IRS.gov.
Links:
IR-2010-73, IRS Issues Regulations on 10-Percent Tax on Tanning Services Effective July 1
Excise Tax on Indoor Tanning Services Frequently Asked Questions
Affordable Care Act Tax Provisions

YouTube Video:

Tanning Services Excise Tax: English | ASL

Recent Legislation Offers Special Tax Incentives for Small Businesses to Provide Health Care, Hire New Workers

WASHINGTON — In recognition of National Small Business Week, the Internal Revenue Service encourages small businesses to take advantage of tax-saving opportunities included in recently enacted federal legislation.

A variety of business tax deductions and credits were created, extended and expanded by the American Recovery and Reinvestment Act of 2009 (ARRA), this year’s Hiring Incentives to Restore Employment (HIRE) Act and the Affordable Care Act. Because some of these changes are only available this year, eligible businesses only have a few months to take action and save on their taxes. Here is a rundown of some of the key provisions.

New Health Care Tax Credit Helps Small Employers

The small business health care tax credit, created under the Affordable Care Act, is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.

The credit takes effect this year and is generally available to small employers that pay at least half the cost of single coverage for their employees in 2010. The credit is specifically targeted to help small employers that primarily employ low- and moderate-income workers.

For tax years 2010 to 2013, the maximum credit is 35 percent of premiums paid by eligible small business employers. The maximum credit goes to smaller employers ­­–– those with 10 or fewer full-time equivalent (FTE) employees ––­­ paying annual average wages of $25,000 or less. The credit is completely phased out for employers with more than 25 FTEs or with average wages of more than $50,000.

Because the eligibility rules are based in part on the number of FTEs, not the number of employees, businesses that use part-time help may qualify even if they employ more than 25 individuals. More information about the credit, including a step-by-step guide and answers to frequently asked questions, is available on the IRS website.

Two New Benefits for Employers that Hire and Retain Recently Unemployed

Employers who hire unemployed workers this year (after Feb. 3, 2010, and before Jan. 1, 2011) may qualify for a 6.2-percent payroll tax incentive, in effect exempting them from the employer’s share of Social Security tax on wages paid to these workers after March 18. In addition, for each qualified employee retained for at least a year whose wages did not significantly decrease in the second half of the year, businesses may claim a new hire retention credit of up to $1,000 per worker on their income tax return.

These tax benefits are especially helpful to employers who are adding positions to their payrolls. New hires filling existing positions also qualify but only if the workers they are replacing left voluntarily or for cause. Family members and other relatives generally do not qualify.

Employers must get a signed statement from each eligible new hire, certifying under penalties of perjury, that he or she was not employed for more than 40 hours during the 60 days before beginning employment with that employer. IRS Form W-11 can be used to meet this requirement. Further details, including answers to frequently asked questions, are posted on IRS.gov.

Work Opportunity Tax Credit Aids Employers That Hire Certain Workers

The work opportunity tax credit (WOTC) offers tax savings to businesses that hire employees belonging to various targeted groups. These groups include people ages 18 to 39 living in designated communities in 43 states and the District of Columbia, recipients of various types of public assistance, certain veterans, ex-felons and certain youth workers. The instructions for Form 8850 detail the requirements for each of these groups.

Certification by the state workforce agency is generally required. Normally, a business must file Form 8850 with the state workforce agency within 28 days after the eligible worker begins work.

An eligible employer can claim both the WOTC and the new hire retention credit for the same employee. However, an employer may not claim both the payroll tax exemption and the WOTC for the same employee. Therefore, any employer that chooses to apply the exemption to wages paid to a qualified employee may not receive the WOTC on any wages paid to that employee during the one-year period beginning on the employee’s hiring date.

Exclusion of Gain on the Sale of Certain Small Business Stock

An extra incentive is now available to individuals who invest in small businesses. Investors in qualified small business stock can exclude 75 percent of the gain upon sale of the stock. This increased exclusion applies only if the qualified small business stock is acquired after Feb. 17, 2009, and before Jan. 1, 2011, and held for more than five years. For previously-acquired stock, the exclusion rate remains at 50 percent in most cases.

COBRA Credit

Employers that provide the 65 percent COBRA premium subsidy to eligible former employees can claim credit for this subsidy on their quarterly or annual payroll tax returns. To help avoid imposing an unnecessary cash-flow burden, affected employers can reduce their payroll tax deposits by the amount of the credit. For details, see the instructions for Form 941.

Small business owners can find a variety of helpful on-line resources in the Small Business and Self-Employed Tax Center on IRS.gov.

Health Insurance Update from Capitol Hill as of May 14, 2010

News from the Blues for Prroducers - Blue Cross and Blue Shield of Texas



May 19, 2010

Capitol Update

Read about what is happening on the federal legislative front (as of May 14, 2010).

Group Unveils Bipartisan Anti-Obesity Legislation
Recently authored bipartisan legislation, the Healthy CHOICES Act (Healthy Communities through Helping to Offer Incentives and Choices to Everyone in Society Act), H.R. 5209, was unveiled during an event on Capitol Hill. Sponsored by Representative Ron Kind (D-WI), the legislation takes a comprehensive approach to combating obesity.

The Act includes provisions to address factors that contribute to unhealthy lifestyles, such as:

* Increasing access to the tools and education to make healthy choices
* Updating nutrition guidelines for child and adult care food programs
* Increasing access to nutritional information and healthy, affordable foods in rural and low-income urban areas
* Improving access to and opportunity for physical activity for adults and children
* Providing more opportunities to participate in outdoor physical activities, including as a means of transportation

The bill’s original co-sponsors include Representatives Mary Bono Mack (R-CA), Earl Blumenauer (D-OR) and Marcia Fudge (D-OH). Due to the expansive nature of this legislation, it has been referred to numerous committees: House Education and Labor, House Energy and Commerce, House Natural Resources, House Transportation and Infrastructure, and the House Ways and Means.

“Making the healthy choice the easy choice for our families is essential to ensuring our quality of life,” said Representative Kind. “Easier access to the tools and education to prevent and treat obesity; affordable, nutritious food to promote a balanced diet; and an increased emphasis on physical activity to maintain our overall health is critical to achieving a healthy lifestyle. I am pleased to work on legislation that helps provide the opportunities that meet the needs of busy American families.”

The Act’s table of contents is:

1. Improving prevention and treatment of obesity in adults and children
2. Improving childhood nutrition
3. Improving access to and opportunity for physical activity for adults and children
4. Improving access to nutritional information and healthy foods
5. Realigning transportation policy to help promote healthy lifestyles
6. Research and assessment tools

“Rising obesity in our country is threatening the health and quality of life of far too many Americans and is costing our health care system billions of dollars,” said Representative Bono Mack. “It is time we take a stand that will help educate our young people and their families and make it easier to make informed, healthy choices, which will reduce health care costs in the future. I am proud to join my colleagues Congressman Kind, Congressman Blumenauer and Congresswoman Fudge in this important effort that will promote wellness education and encourage physical activity that will help Americans of all ages be more productive in school and in the work place and live healthier, happier lives.”

According to the Centers for Disease Control and Prevention, 73 percent of adults and 43 percent of children in this country are overweight, obese or severely obese. And in 2008, 32 states reported obesity rates of 25 percent or more. The Healthy CHOICES Act’s authors state that it is the first legislation of its kind that brings together the grocery industry, the health care industry and government to comprehensively fight the obesity epidemic.

This legislation comes at a time when First Lady Michelle Obama has unveiled her Let’s Move campaign’s action plan. The campaign’s goal is to end the epidemic of childhood obesity in a generation.

Read more about the Let’s Move campaign.
Read more about the Healthy CHOICE Act.

CBO Adds Billions of Dollars for Discretionary Spending Cost Estimate
On May 11, the Congressional Budget Office (CBO) released a report with additional information about the potential effects of the new health reform law, the Patient Protection and Affordable Care Act (PPACA), on discretionary spending that the CBO initially provided on March 13, prior to the legislation being passed.

The updated analysis adds a minimum of $115 billion over 10 years – more than twice the initial estimate released before President Barack Obama signed the bill into law. This new estimate brings the cost of the new law to well over $1 trillion.

CBO Director Douglas Elmendorf stated that while the CBO does not have a comprehensive estimate of all the potential discretionary costs, they provided information on the major components broken down into three general categories:

1. Costs incurred by federal agencies to implement the new policies
2. Explicit authorizations for grant and program spending for one or more years
3. Explicit authorizations for grant and program spending for which no specific funding levels are specified

Minority Leader John Boehner (R-OH) immediately released a statement admonishing the Administration, saying that the new estimate “provides ample cause for alarm,” and nearly wipes out “the purported deficit reduction in the law.”

A Senate Finance Committee Democratic aide said, “The bulk of discretionary spending referenced in the report is for programs – like the Indian Health Service, the National Health Service Corps and Federally Qualified Health Centers – that were not created under health care reform and would have been funded through the appropriations process, like they have for decades, with or without health care reform.”

Read the CBO’s full report.

Tax Extenders Bill Still in Play in the House
The House is expected to take up the American Workers, State and Business Relief Act of 2010, H.R. 4213, more commonly referred to as the “tax extenders” legislation, the week of May 17. House leaders want to bring legislation to the floor that will extend long-term unemployment insurance and the 65 percent COBRA health insurance subsidies for unemployed Americans, as well as dozens of tax credits for individuals and businesses that both the House and Senate supported in previous months, through the end of 2010. Currently, the legislation extends these benefits through May 31, 2010.

The bill would also delay a scheduled 21 percent payment reduction for physicians who treat Medicare patients – more commonly known as the “doc fix” – as mandated by the sustainable growth rate formula.




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an Independent Licensee of the Blue Cross and Blue Shield Association.

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Common Mistakes - To Outsource Life

To outsource life, one must understand why you would want to outsource life. Outsource the things in your life you do not want to do, you put off constantly, or the things that pile up due to time constraints. By outsourcing this life you leave time for the good life you want. To outsource life many common mistakes are made. Let us review a few of these mistakes when you outsource life.

A common mistake you might make before you begin to outsource is hiring an assistant without the skills you know you will be needing. It will not help to outsource life, especially the one you want to outsource if it takes longer to get them to a point they can do the tasks you need. This will be frustrating and fruitless.

A very common mistake made when you outsource life to a virtual assistant is that you assume the assistant knows as much about the task you are requesting to be done as yourself. Big mistake! Make your instructions for the task you want to outsource detailed, simple and understandable to a child. Simple, simple, simple. I cannot say it enough.

When you outsource tasks to be accomplished assume your assistant has no skills. You will need to explain everything, each step in detail in simple English. This is especially true if you outsource to an assistant from a foreign country. What is a basic skill to you may not be to the foreign assistant.

Another mistake made when you outsource is that you need to know how to delegate tasks. Most of us understand how to delegate to ourselves but to others we may not be as comfortable. Before you begin to delegate, define what you need done and establish its importance. By doing this, you will eliminate unimportant tasks or duties that are inefficient. Remember if you delegate unimportant or poorly defined tasks it costs you money. A goal to outsource life is to get processes and tasks streamlined, more efficient, while freeing up your time.

When delegating your outsourcing, instructions need to be laid out very clearly with all the decision points explained. Points like the type of results you expect, the format of documents, due dates, response rates to you, etc should be specified in advance so that the assistant knows from beginning to ending what the process is.

To outsource life you need to be informed of progress on a regular basis. What that regular basis is will be your decision. However, communicate this expectation to your assistant very clearly. Do not assume since you have not heard from your assistant that "silence is golden". This silence can be an indicator that your assistant may be clueless as to how to even ask questions about the task you have communicated. The thing you do not want to happen is for the due date to arrive and your assistant has not done anything you have requested.

Ask the assistant you outsource tasks to to contact you within say 6 hours of beginning the task to assure they are doing what you are expecting. This is a cautionary follow up but a good one to follow until you know your assistant can meet your expectations satisfactorily. Encourage your assistant to ask for better directions if you are not giving them.

To outsource life tasks you do not enjoy completing or do not have time for is the best way to get the life you really want. The goal to outsource life is for you to be free to focus on bigger and better things. By outsourcing life you can live the ideal lifestyle you crave. Outsource life to make a better life!

Rob Murgatroyd is the creator of Jet Set Money. To find out exactly how to outsource life and live the Tim Ferriss Four Hour Work Week visit his website here http://jetsetlife.tv/jet-set-money

Article Source: http://EzineArticles.com/?expert=Robert_Murgatroyd

The Importance of Keeping Proper Business Records - The Whys and Hows

The Importance of Keeping Proper Business Records - The Whys and Hows
By Leo Thomas

The importance of keeping proper business records cannot be overstated. Businesses amass a great deal of records, from incoming supplies to outgoing sales, from employee records to business contracts, from repair and expense receipts to revenues from business operations, there are records for everything. Keeping track of records and knowing what to save and for how long can be a daunting prospect. Saving documents can be both a time and storage space consuming issue for businesses. In general, records pertaining to financial transactions and employee records should be kept for a minimum of six years.

Governmental reporting for taxes and regulations regarding employees are generally the first instances illustrated when discussing the importance of keeping proper business records. These are very valid reasons for keeping records. Income (revenues) and expenses must be recorded for tax purposes and those records may be required several years after the year in which they occur and taxes were paid. Governmental regulators and agencies meant to serve employees can request documentation on a specific employee years after the period the record covers. As such, accurate documentation on pay and pertinent hiring information should be tracked and recorded.

Another reason illustrating the importance of keeping proper business records are the requirements of certain lenders and insurers. At some point, nearly every business will need to borrow money or obtain credit. Whether borrowing money to expand or using credit to procure supplies and raw materials, business credit is an important financial asset. As such, lenders will require documentation of past profits. They will use these records to compute future profit and loss projections. Similarly, whether insuring against losses from physical damages, covering liability, or protecting employee heath, insurance companies will often require both financial and/or employee statistics records.

The sale of a business also requires extensive documentation. It is quite possibly the most common illustration of the importance of keeping proper business records. Historical data on company finances plays a large role in determining the sale price of a business. Likewise, supplier and customer records, as well as the results of past marketing activities and expenses are invaluable to a new owner. This helps them prevent previous mistakes and continue achieving successful operations after the sale. For selling owners, financial records ensure an accurate sale price so they get what their business is worth when sold.

Article Source: http://EzineArticles.com/?expert=Leo_Thomas

How to Make QuickBooks Enter Transactions For You

Do you have a lot of transactions that repeat from day to day, week to week, month to month in your business? What about repeating transactions that need to happen once or twice a month? I'm sure you do. After all, if you have to pay rent, or make a car payment, then you have a repeating transaction. But what about invoices or sales receipts? Do you bill any of your customers the same amount monthly, weekly, daily? How about deposits? Do you receive a specific preset amount of money on a timely basis (like an insurance payment, disability, social security, or just a flat fee for services rendered)? What about vendor bills or credit card entries that are charged to your account every month?

All of these things, no matter how big or small, can be "Memorized" by QuickBooks. In other words, you can set them up so that QuickBooks does the data entry for you. It's really easy. All you do is set up the transaction as if you are about to enter it, then "Memorize" it. Once you do, QuickBooks will automatically enter the transaction as a check, bill, invoice, deposit, etc., as soon as the date you preset passes. Then, when you open QuickBooks after that date, you will be notified that the transaction(s) have been entered. This one little step can save hundreds and even thousands of minutes in data entry time.

Here's how to "Memorize" a Transaction in QuickBooks:

1. Create your transaction, but do NOT press "Okay" / "Enter" / "Save and Close." (You can also pull up a transaction you've already saved if you don't want to re-enter the information.)
2. With the transaction open, Press Ctrl M.
3. The screen that pops up should look something like this:
4. Choose "Enter Automatically", then the frequency (weekly, monthly, quarterly, etc.) under the "How Often" section.
5. Choose the next date you want the transaction entered (which is going to be the transaction for the NEXT month - Thus, you would choose February if you are entering January's transaction).
6. Choose the number of transactions remaining (which is useful for items such as car payments that are only paid for three years), and the number of days to enter the transaction in advance if you're going to mail that transaction in the future.
7. Click "OK" to return to the Original Transaction.
8. Press Ctrl Enter to Save That Transaction for THAT MONTH.
9. That's it. The next time that entry needs to be entered, QuickBooks will enter it when you open the program.

Quick Important Note: Once the transaction is Memorized, you can simply Close and then Reopen QuickBooks and QuickBooks will automatically enter ALL of those transaction from the first entry up to TODAY. That means, if you create an entry for January of 2007, but it's May of 2010, this transaction will be entered multiple times until all of the transactions have been entered up until today's date. What this means for anyone who's behind on their bookkeeping is that they only need to memorize one of each transaction and amount, then close and open QuickBooks to become instantly up to date.

Now go forth and take advantage of this fabulous tool. It will save you OODLES of time!

Let me know how it works for you.

QuickBooks PRO 2009

Article Source: http://EzineArticles.com/?expert=E._T._Barton

Bookkeeping 101 Explained

Bookkeeping 101 Explained

By Inessa Khaykin


Bookkeeping is normally performed by a bookkeeper; you shouldn't confuse bookkeeping with accounting - because they are two very different things! Most times, the accounting process itself is done by an accountant - accountants create reports from the records of the company itself. These records are usually prepared by a bookkeeper.

The most common methods of bookkeeping are single entry and double entry systems. These are seen by most people as 'real' methods of bookkeeping, but don't get overwhelmed - any process that involves keeping the records of a business's financial transactions classifies as bookkeeping.

Many small businesses tend to neglect their bookkeeping, feeling that it's more important to be out of the office generating new sales then sitting inside adding credits or debits to a sheet, or setting up what they see as an unnecessarily complex bookkeeping system.

Don't fall into this trap - don't think that bookkeeping is something you can ignore, because it's certainly not. Appreciating how bookkeeping really influence your business can make it more of a priority in the future.

Bookkeeping is simply the recording of your business's financial transactions. Bookkeepers basically keep track of all things dealing with the finances, including receipts. Recording the entries chronologically, they make sure that all cash transactions, sales, purchases, and more go into a journal, or ledger.

This information then goes to an accountant, who usually processes it, analyzes what's there, and produces a monthly financial statement that helps you get a better idea of where you stand.

Bookkeeping doesn't contribute directly to your profits - no one is going to pay you to do your books - there are numerous reasons why you should make bookkeeping a top priority.

- If you're going to be relying heavily on outside financing, you're going to need detailed, and accurate, records of all of your businesses finances. Lenders and investors alike need this information to measure how much risk they're putting into this, and if you don't have the information, you won't get the money.

- At the end of the tax year, when you go to figure out how much you owe the IRS in taxes, you need to look at an accurate assessment of how much you've made. This can't be done without proper bookkeeping. Moreover, you need to be able to show proper receipts to verify information regarding tax deductions. If you don't have this information and you get audited, you can suffer huge fines.

- Looking at your books is like going to the doctor for a checkup. With an up to date and accurate ledger, you can see who is past due on payments, who has outstanding credit, what is owed to you, and what you owe - right there. The financial reports that come from good bookkeeping help you keep in line with a budget, judge what you're grossing in income, and will help you determine how healthy your business is, financially speaking. Without it, you have no way to anticipate any cash flow issues.


Article Source: http://EzineArticles.com/?expert=Inessa_Khaykin

To Slash Taxes, Buy Assets and Lease Them Back to Your Company

This strategy works especially well with real estate and other assets that are likely to appreciate in value.

It's bad enough when you have to pay tax once to the IRS. But C corporation owners are hit with a double tax whammy: first, when the corporation pays tax and, second, when Uncle Sam taxes them personally on dividends paid out by the company.

Strategy: Buy property and assets personally and lease them back to your company. That way, the company pays you deductible lease payments instead of nondeductible dividends, and you can offset the income with depreciation or amortization deductions.

That technique works particularly well with real estate and other assets that are likely to appreciate in value. In fact, if your company already owns a business building, you can buy it from your company now and then lease it right back.

Example: sale-leaseback deal. Suppose your company bought its building years ago and has since depreciated it down to zero. You estimate that the building and adjacent land are currently worth $1.5 million. Your company needs a quick cash infusion for proposed expansion, but money is tight.

Solution: Buy the building from your company for $1.5 million—using mostly cash you've borrowed—

and lease it back. Then you begin depreciating the building all over again, using a 39-year write-off period. Your company pays the going rate for rentals in your area, but the rental income is offset by the depreciation and other related expenses. Your company now has the cash it needs for expansion and can deduct rental payments for a building that had previously been fully depreciated.

In comparison, your company receives no tax deduction for money paid to you as dividends. The downside is that the company must pay tax on the gain.

Fly under IRS radar. This technique can be perfectly legal, but the IRS often casts a skeptical eye on such deals. To make sure your deal is legit and satisfies IRS standards, meet these five requirements:

1. The property's useful life must exceed the lease term.

2. Any lease renewal is set at a market value.

3. The buyer reasonably expects to profit from the deal.

4. The property is sold at a fair price, and the buyer assumes the risk of losing money.

5. A valid nontax business reason exists for the rental (e.g., leasing assets instead of owning them can release working capital).

- National Institute of Business Management

Tax Deductible Sea Cruise??!!

Make it a tax-deductible sea cruise. The IRS permits you to deduct up to $2,000 when attending a business convention or seminar held aboard a U.S.-flagged cruise ship. To qualify, you must establish that the cruise ship is U.S. registered and all ports of call are in the United States or its possessions. The business meeting must be the trip's primary purpose.

- National Institute of Business Management

Grab 5 Quick Tax Perks: Put Your Spouse on Payroll

Does your business need trustworthy and reliable employees? You may not have to look any further than across the dinner table.

Strategy: Hire your spouse to work as an official employee. Why put your spouse on the payroll? Because you can gain five tax benefits:

1. Build up tax-favored funds for retirement

If you meet the tax-law requirements, your company can deduct contributions made to a qualified retirement plan on your spouse's behalf. The annual limits are quite generous. If your company has a defined contribution plan, you can deduct contributions up to 25% of compensation or $49,000, whichever is less, for 2009.

With a 401(k) plan, another dollar limit applies: Your spouse can defer up to $16,500 to the plan in 2009

(plus an extra $5,500 if he or she is age 50 or older). Your company can match those contributions wholly or partially up to tax-law limits.

2. Shift taxable income away from the company

If you operate a C corporation, any compensation you pay to your spouse would have to stay with the company. Assuming your corporation is in a higher tax bracket than your personal tax bracket, you'll save tax overall if your spouse draws a salary. But don't look for any income-shifting tax benefit—possibly a drawback—if your company falls in a lower tax bracket than your personal bracket.

Note: S corporation owners and sole proprietors don't pay corporate income tax. You report business income on your personal return whether or not you pay your spouse a salary. So this could be a wash

3. Get more tax mileage from business trips

Generally, you can't deduct the travel expenses attributable to your spouse if he or she accompanies you on a business excursion. However, if your spouse is a bona fide company employee and goes for a valid business reason, you may deduct his or her travel costs, including air fare, lodging and 50% of the meal expenses. The benefit also is

tax-free to your spouse.

4. Cure health insurance coverage ills

If you're already paying more to cover your spouse under your company health insurance plan, hiring him or her shifts the expense to your company. Typically, your company can deduct your spouse's full health insurance cost. Even self-employeds can write off 100% of the cost under a so-called Section 105 medical-reimbursement plan.

5. Join the employer-paid life insurance group

Your spouse is entitled to the same group-term life insurance coverage as your other employees.

Key point: The first $50,000 of employer-paid, group-term coverage is tax-free to an employee. However, one catch for S corp owners: Generally, you can't deduct fringe benefits, such as group-term life insurance, for any employee who owns 2% or more of the company. By extension, that rule also applies to an employee-spouse.

- National Institute of Business Management