Kahan Roger A

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ROGER A. KAHAN, CPA Tax and Business Consultant Serving the tax and financial needs of individuals and small to medium businesses almost anywhere in the USA

Thanks to the WebCPA Staff for this information
Proposed legislation would make it easier for small businesses to qualify for the home office tax deduction.
The bipartisan bill, introduced in both the House and Senate, would direct the Treasury Secretary to create an optional, easy-to-use standard deduction to encourage greater use of the home office tax incentive. In addition to instituting an optional home office tax deduction, the “Home Office Tax Deduction Simplification and Improvement Act of 2009” would require the IRS to streamline its reporting requirements to clearly identify the portion of the deduction devoted to real estate taxes, mortgage interest and depreciation in order to further reduce the burden on the taxpayer.
Under current law, a home office tax deduction can be claimed by qualified individuals who use a portion of their home as a principal place of business or as a space to meet with patients or clients. Recent research from the U.S. Small Business Administration indicates that roughly 53 percent of America’s small businesses are home-based, but few home businesses actually take advantage of the tax incentive because of the complex, rigid reporting requirements.
The bill, introduced by Senators Olympia J. Snowe, R-Maine, and Kent Conrad, D-N.D., along with Rep. Charles A. Gonzalez, D-Texas, would also update the Tax Code to ease the burden of proof in claiming the deduction. Specifically, it would allow the home office deduction to be taken if taxpayers use part of their home to meet or deal with clients regardless of whether the clients are physically present. The bill would also allow for de minimis use of business space for personal activities so that taxpayers would not lose the ability to claim the deduction if they make a personal call or pay a bill online.
“With a morass of paperwork attributable to the home office deduction, the time-consuming process of navigating the tangled web of rules and regulations makes it unsurprising that so many small-business owners forego the home office deduction,” said Snowe, who is ranking member of the Senate Committee on Small Business and Entrepreneurship. “By simplifying this vital tax incentive, our bill will give small firms much-needed relief from burdensome tax rules, which, in turn, will allow them to focus their efforts on developing new, cutting-edge 21st century products and services and creating new jobs.”
The Snowe-Conrad-Gonzalez initiative has already attracted strong support from the National Federation of Independent Business, the IRS National Taxpayer Advocate Service, and the SBA’s Office of Advocacy.

The IRS has provided a reminder to taxpayers of the various tax breaks made available by the American Recovery and Reinvestment Tax Act of 2009 (P.L. 111-5). In many cases, taxpayers must take action within the 2009 or 2010 calendar years in order to take advantage of the tax benefits.

The deduction for the local sales and excise taxes of qualified new vehicle purchases (up to $49,500 in cost) under Code Sec. 164 requires the purchase of the vehicle before January 1, 2010.
The 30-percent credit for energy-efficient home improvements under Code Sec. 25C applies to improvements placed into service in 2009 and 2010.
The expanded Hope scholarship credit under Code Sec. 25A, temporarily applicable to the first four years of college rather than only the first two, applies to tax years 2009 and 2010.
The expansion of education savings plans under Code Sec. 529 to allow for the purchase of computer technology, Internet access and related services applies to 2009 and 2010.
Finally, the making work pay credit under Code Sec. 36A provides taxpayers with lower withholding rates in 2009.

However, families in which both spouses work or taxpayers with multiple jobs may need to adjust their withholding in order to avoid lower refunds or tax liabilities for 2009.

If you changed your home or business address, you'll want to remember these six tips to ensure you receive any refunds or correspondence from the IRS.

Write the new address in the appropriate boxes on your tax return
Use Form 8822, Change of Address, to submit an address or name change any time during the year
Give the IRS written notification of your new address by writing to the IRS center where you file your return. Include your full name, old and new addresses, Social Security Number or Employer Identification Number and signature. If you filed a joint return, be sure to include the information for both taxpayers. If you filed a joint return and have since established separate residences, both taxpayers should notify the IRS of your new addresses
Should an IRS employee contact you about your account, you may be able to verbally provide a change of address

Be sure to also notify your employer of your new address so you get your W-2 forms on time.

If you change your address after you've filed your return, don't forget to notify the post office at your old address so your mail can be forwarded.

Taxpayers who make estimated payments throughout the year should mail a completed Form 8822, Change of Address, or write the IRS center where you file your return. You may continue to use your old pre-printed payment vouchers until the IRS sends you new ones with your new address. However, do not correct the address on the old voucher.

The IRS does use the Postal Service's change of address files to update taxpayer addresses, but it's still a good idea to notify the IRS directly.

Visit IRS.gov for more information about changing your address. You can find the address of the IRS center where you file your tax return or download Form 8822, Change of Address. The form is also available by calling 800-TAX-FORM (800-829-3676).

OR, if you are currently one of our clients, you can notify this office and we will prepare the necessary notices for the Internal Revenue Service and your current resident state. This is a complimentary service provided by your "Trusted Advisor."

If you’re like many of us, your car sometimes becomes an extension of your house or office, and you tend to stash “stuff” on the seats or on the floors. Now this stuff can be valuable - gifts, store purchases, purses, and the like; or it can be what you and I consider junk.
However, what we think of as junk may be another person’s “gold” and ripe for the taking. Items left in cars can be tempting to others.
To avoid loss, a good rule of thumb at anytime and especially as we move toward the winter holidays, is to stop and look around before exiting your car. If you have “stuff” that’s visible to someone outside the car, it is best to stash it in the trunk or out of sight before locking and leaving your vehicle.
That way you know your items will be waiting for you when you return.
Our thanks for this fine advice go to the monthly employee bulletin produced by the public relations department of the New England Sinai Hospital of Stoughton, Massachusetts.

Despite some decreases in 2008, the IRS’s overall level of compliance activities remains higher than in the years immediately after implementation of the IRS Restructuring and Reform Act of 1998.
A new report by the Treasury Inspector General for Tax Administration found, however, that some IRS collection function activities and results declined during 2008 after several years of improved results. The use of liens continued to increase, but the use of levies and seizures decreased during the year. Enforcement revenue collected also decreased, and the total dollar amount of uncollected liabilities increased.
“Continued effort to improve compliance is important for reducing the estimated $345 billion tax gap and maintaining the integrity of the voluntary compliance system,” said TIGTA Inspector General J. Russell George in a statement.
The overall percentage of tax returns examined decreased by almost 3 percent; however, the overall percentage of tax returns examined was almost 12 percent higher than in 1999.
The number of tax returns of individuals examined increased, with almost 82 percent conducted via correspondence examinations. The number of corporate tax returns examined increased by just over 1 percent, a decline of almost 23 percent since 1999.

Roger A. Kahan is a Certified Public Accountant, a Tax and Business Consultant serving the tax and financial needs of individuals and small to medium sized businesses primarily in eastern Massachusetts (as well as almost anywhere in the United States). Roger is always seeking additional clients and other professionals clients to advise and improve their personal or business life. Do you know of someone that could use our professional services? Please let us know if we can use your name in an introductory letter or phone call. We do offer a referral fee to those that join our ever-increasing list of tax clients. Call for more details. Thank you.

The Massachusetts Society of CPAs represents over 8,800 Certified Public Accountants working in public accounting, industry and business, or in government and education.

Did you know I do more than just prepare, compile and crunch numbers? I am not just a bean-counter. I can also advise you on estate and business planning and offer financial strategies to meet your goals. As your TRUSTED ADVISOR, I know your financial needs better than many other professionals you may be working with.

Planning for the future is a lot like planting a tree. Youve got to do it today if you want your family to enjoy it tomorrow.