We are receiving a lot of questions regarding the GOAL scholarship tax credit. If you would like to learn more about how you can redirect taxes you are already paying the state of Georgia and receive a $2500 Georgia Tax Credit for joint filers or $1000 for individual filers, you can attend the free luncheon below. It’s an opportunity to learn about the credit and see how it is benefitting our local kids and community.

The free luncheon will be on Wednesday, February 15, 2012 at 12:00 noon at the Heritage Academy located at 333 Green Street, Augusta, GA. If you plan to attend please email Darlene Walters at dwalters@heritageaugusta.org or call 706-821-0034 to RSVP by Monday.

Heritage is one of the six local private schools for which this credit can be used. The state of Georgia has set a fifty million dollar cap for this program and funds were claimed by the first week of November last year. Local schools are expecting the cap to be reached earlier than that this year so if you are interested in the program you will need to contribute early in the year. The presenters are Bill Cleveland, CPA, CFP, PFS and Linda Tucciarone, Executive Director. Lunch will be provided by Fireside Outdoor Kitchens & Grills.

You can also see more details at http://www.goalscholarship.org/ .

Get tips and guidelines from experts who help nonprofit organizations make the most of their budgets, marketing, and management.  Through this series you will learn ways to help your nonprofit save money, make smart business decisions, and work efficiently with auditors.

Topics for December Session

• Board governance
• Navigating the seas of an audit
• Fearing the 990? Don’t!
• Basic accounting for grants

Future Topics will include

• Facts & myths on preventing fraud
• Migrating IT to the Cloud
• How to run a nonprofit like a for profit business
• Social media & marketing strategy

Who Should Attend
Executive directors or other financial officers; Nonprofit board members; CFOs; Treasurers; Audit, Finance or Budget committee chairs

Where
The Cleveland Group, CPAs on Davis Road in Martinez, GA
3740 Executive Center Drive, Martinez, GA 30907

When
Friday, December 16, 2011 from 9:00am to 11:00 am

Cost
Complimentary

RSVP
Contact our office for a registration form.
Forms must be submitted by Monday, December 12th by fax 706.288.2820 or email to ttrowell@clevelandgroup.net.

Limited space available.

Read further for an update of some of the changes.

Personal and Dependent Exemption – The personal and dependent exemption for most taxpayers is $3,800, up $100 from 2011.

 Standard Deduction – The new standard deduction is $11,900 for married couples with a joint return. This figure is up by $300 from the prior tax year. For singles and married people filing separately, the new figure is $5,950, representing a $150 increase from 2011. Heads of households have a standard deduction of $8,700, up from $200 in the prior tax year.

Tax-Bracket Thresholds – The IRS is increasing the tax-bracket thresholds for each filing status. For example, married couples filing a joint return will have a new taxable-income threshold marking the 15-percent bracket from the 25-percent bracket, now set at $70,700 in 2012. It was $69,000 in 2011.

Qualified Transportation Fringe Benefit - The fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass goes down to $125 for 2012 unless Congress takes action to increase it. (For 2011, it was temporarily increased to $230) The amount for qualified parking is $240 monthly for 2012, up $10 from 2011.

Contributions to 401(k) and 403(b) Plans - Taxpayers can contribute up to $17,000 for 2012, up $500 from 2011. The catch-up contribution amount for those age 50 and older remains $5,500.

Foreign Earned Income Deduction – The foreign earned income deduction will be $95,100 in 2012, representing an increase of $2,200 from the maximum deduction for tax year 2011.

Kiddie Tax - The amount used to reduce the net unearned income reported on a child’s return that is subject to the “kiddie tax” is $950.

Student Loan Interest – The $2,500 maximum deduction for interest paid on student loans begins to phase out for married taxpayers filing joint returns at $125,000. It phases out completely at $155,000. This is an increase of $5,000 from the phase out limits for tax year 2011. The phase out ranges for single taxpayers is the same as the prior tax year.

Estate and Gift Taxes – For an individual dying in 2012, the basic exclusion from federal estate tax will be $5.12 million, representing an increase from the $5 million amount for calendar year 2011. Also, if the executor opts to use the special use valuation method for qualified real property, the aggregate decrease in the value of the property resulting from the choice cannot exceed $1.04 million. This figure is up from $1.02 million for 2011.

The exclusion for gifts remains the same, set at $13,000 per individual for the year.

Earned Income Tax Credit – For tax year 2012, the maximum earned income tax credit for low- and moderate- income workers and working families increases to $5,891 vs. $5,751 in 2011. The maximum income limit for the earned income tax credit increases to $50,270, up from $49,078 in 2011. (The credit can change depending on the family size, filing status and other conditions.)

If you have questions about these or other tax issues, contact us!

1. Adjust Price of Items by % – You can now adjust the price of items by a percentage in a certain time period.

• For example, if you want to increase the price of hammers by 3% each year, you can have QuickBooks automatically update that for you at the click of a button.

2. Create Batch Timecards – If you have several employees working the same hours at the same location/on the same job/etc., you can now enter the information once, choose which employees have this information, and QuickBooks will fill in the rest!

3. Custom Reporting – My favorite update! Now, when you make a change after exporting a report to Excel, there is a new tab in Excel that will allow you to update the changes from QuickBooks. So, you no longer have to delete the report and create a new one. Genius!

4. Find and Select Items – When invoicing a customer for items, you can now “find and select” items by name.

• For example, say you want to invoice for every item that had the word “anchor” in the description. You can “find and select” anchor and all items will pop up.

5. Document Management Center – This allows you to scan documents directly into QuickBooks and drag & drop documents into QuickBooks. Access it from the “Doc Center”. There is an additional fee charged for this feature. If you want to go paperless, just give us a call. We can help you with that!

6. Create Credit Memos from the Invoice Screen – Great new feature! Just go into the invoice that you are crediting and click “create credit memo”. This literally eliminates about 5 additional steps that were needed before this feature.

7. Calendar – QuickBooks now has a calendar function built in. This feature does not sync with Outlook…yet. But won’t that be spectacular when it does?

Good business decisions are made with good information which is why it’s important to get it right and use it! If you need more help with your QuickBooks or any of the new features, please give us a call. We would be happy to help!

We have seen rates as low as 3.37% for a 15 year mortgage.  We suggest shopping rates and the fees associated with a refinance.

If you are considering precious metal investing in a taxable account, here are the federal income tax implications. (There are different rules if you want gold in an IRA or other retirement account.)

Physical Ownership of Precious Metal Coins and Bullion

There are no tax-law restrictions on a taxpayer’s direct physical ownership of precious metal coins and bullion. However, these assets are considered collectibles for federal income purposes. As such, when sold by individual taxpayers, any net long-term capital gains are subject to a maximum federal income tax rate of 28 percent, instead of the usual 15 percent rate. (Source: Internal Revenue Code Section 1(h)(4) and (5))

The other big issue with direct physical ownership of precious metal assets is finding a secure place to store them. Using a bank safe deposit box is one possibility, but obtaining insurance coverage could be problematic.

Another option is to have a storage company hold your precious metal assets. Several companies exist for this specific purpose. Depending on the company, you may be able to have your precious metal assets stored on a fully segregated basis – where you continue to hold title to the assets and they are specifically identified and physically separated from everyone else’s assets.

Therefore, you can order your coins or bullion to be delivered to you at any time. The other alternative is so-called allocated storage where the storage company basically acts as a custodian by holding precious metal assets that add up to what its customers collectively own. Your share is mingled with the other customers’ shares, and you only have a piece of paper to show for it. If you demand immediate delivery, it could take some time to convert your share into actual physical coins or bullion that could then be shipped to you. Whether you choose segregated or allocated storage, make sure to ask about insurance coverage.

Indirect Precious Metal Investments via ETFs and Mining Stocks

Direct physical ownership of precious metal assets is not for everyone. For those who are uncomfortable with the idea of physical ownership, an alternative is buying shares of an exchange traded fund (ETF) that tracks the value of particular precious metal.

However, there is a tax downside when compared with other funds. The IRS has ruled that precious metal ETFs held in taxable accounts are considered collectibles for federal income tax purposes. As such, any net long-term capital gains when shares are sold by individual taxpayers are subject to a maximum federal income tax rate of 28 percent, instead of the usual 15 percent rate.

Another indirect way of investing in precious metals is to use your taxable account to invest in a mining company. For example, you could buy shares in a pure gold mining company traded on the New York Stock Exchange. Any long-term capital gains will be eligible for the usual 15 percent maximum federal income tax rate.

This article was in our latest newsletter.  Sign up to receive a bi-weekly update.

For more details regarding the mileage rate for medical, moving expenses, and charitable rates see full article at http://www.irs.gov/newsroom/article/0,,id=240903,00.html .

1. If you do not file by the deadline, you might face a failure-to-file penalty. If you do not pay by the due date, you could face a failure-to-pay penalty.
2. The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return on time and explore other payment options in the meantime. The IRS will work with you.
3. The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of your unpaid taxes.
4. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
5. If you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes.
6. If you timely filed a request for an extension of time to file and you paid at least 90 percent of your actual tax liability by the original due date, you will not be faced with a failure-to-pay penalty if the remaining balance is paid by the extended due date.
7. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax.
8. You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect.

Issue Number:    IRS Tax Tip 2011-74

Work Hard – Play Hard!

 Management, in any industry, should want to encourage exceptional performance. You know and understand the behaviors that generate sucess.  A high-performance culture is critical to the future of a company. But, how do you drive that behavior more often among more of your employees?  How do you inspire employees to associate personal and professional success?  You want employees to be looking for solutions to keep customer service high, seeking opportunities for new business, creating or improving processes that increase work flow, and focusing on the company’s objectives. The lever you need may be a formal Employee Incentive Program – hand-picked to be uniquely meaningful and undeniabley motivating.

An employee incentive program is a formal program used to promote or encourage specific actions or behaviors during a pre-determined time frame. Sounds formal, but it boils down to this…employees like rewards, whether they are in the form of prizes or a good old fashioned pat on the back.  Employee Incentive Programs are designed to reward and motivate employees to exceed targets and add to the overall performance of the company. With many types of programs available, it’s more important than ever to understand your options and choose an employee incentive program style that fits your participants. The program style you choose should take into account who your employees are and what they want.  No matter what type of program you have, the program is about recognizing the achievements and input of employees that are willing to go the extra mile. 

The bottom line is that if an employee feels appreciated, they will work twice as hard as the one that feels as though they go unnoticed. Companies that use recognition programs have found they greatly increase employee engagement; thus, improving performance, customer experience, retention and a wealth of other elements that lead to factors of business success, such as loyalty and ROI.

What can the right incentive program do for your company?  At The Cleveland Group CPAs, we have the tools necessary to build, implement and perfect an optimal program that motivates, engages, excites and inspires the absolute best from your people.  Call us today to get started on a unique and rewarding Employee Incentive Plan!

The Cleveland Group CPAs can help you formalize an Employee Incentive Program!  Contact- Angi Brock at abrock@clevelandgroup.net