The old GM stock (more recently being traded as MTLQQ) stopped trading on the pink sheets in 2011, so now investors are allowed to take the loss on their 2011 tax returns.

If you have already filed your return but have a loss you would like to take, we can certainly help you amend that return.

Call us today!

Written by: Paul B. Murray, CPA, ABV, CFF

Unscrupulous tax preparers are luring unsuspecting senior citizens into filing claims for fraudulent tax refunds the IRS announced. The scam involves convincing both tax filers and those with little or no income who are not required to file that they are entitled to federal refunds. Their claims are based on false and misleading information often citing nonexistent rules and regulations or “buzz words” that may sound convincing to someone with limited knowledge of the tax code. It’s understandable with the numerous tax rebates, refundable credits, stimulus programs and the ever changing tax laws that an individual may be confused and susceptible to such scams. The IRS provided a list of situations that should be considered an immediate red flag warning to individuals, including the following:

• Fictitious claims for refunds or rebates based on false statements of entitlement to tax credits.
• Unfamiliar for-profit tax services selling refund and credit schemes to the membership of local churches.
• Internet solicitations that direct individuals to toll-free numbers and then solicit social security numbers.
• Homemade flyers and brochures implying credits or refunds are available without proof of eligibility.
• Offers of free money with no documentation required.
• Promises of refunds for “Low Income – No Documents Tax Returns.”
• Claims for the expired Economic Recovery Credit Program or for economic stimulus payments. 
• Unsolicited offers to prepare a return and split the refund. 
• Unfamiliar return preparation firms soliciting business from cities outside of the normal business or commuting area.

The IRS cautions taxpayers to choose wisely when selecting a tax preparer. Ask friends and family for a referral, check web sites, community activity and how long the firm has been in business.

We realize that most of our readers wouldn’t fall prey to such scams but if you have elderly friends, family or neighbors remind them:

When It Sounds Too Good To Be True……………..

Written by: Annette Clark, CPA

A new year brings new payroll tax changes that you need to be aware of if you are preparing your own payroll. If you need assistance or have any questions please contact us.

•  Michigan unemployment wage base has increased from $9,000 per employee to $9,500 for 2012. 
• The Federal Unemployment tax rate for 2012 will be 1.8% on the first $7,000 earned by each employee. That rate is made up of the base rate of .6% plus 1.2% credit reduction tax.  The additional 1.2% is considered a 4^th quarter liability. As long as the State of Michigan fails to repay the federal government for federal unemployment benefits this amount will increase by .3% each year. This will be the 4^th year for Michigan.   If your UIA “actual reserve” is positive figure you should complete Form UIA 1110 to receive a credit for a portion of this excess tax on your Michigan unemployment return.
• The Social Security wage base has increased from $106,800 in 2011 to $110,100 in 2012.
• For wages paid from January 1, 2012 to February 29, 2012 the social security rate used to calculate employee’s withholding is 4.2%. The company match is still at 6.2%.  Unless the government extends this tax provision it return to 6.2% for the remained of the year.  We will keep you posted.
• The elective deferral limit for employees who participate in 401(k), 403(b) and most 457 plans increased from $16,500 to $17,000 for 2012.

The Michigan Department of Treasury has issued the 2012 pension withholding guide for personal income withholding tax purposes. Effective January 1, 2012, administrators of pension and retirement benefits are required to withhold income tax on taxable payments. Qualified pension and retirement benefits include most payments reported on Form 1099-R for federal tax purposes. For example, defined benefit pensions, IRA distributions, and most payments from defined contribution plans are included. However, on the other hand, payments received before the recipient could retire under plan provisions or benefits from 401(k), 457, or 403(b) plans attributable to employee contributions alone are not considered pension and retirement benefits.
Taxpayers are required to complete Form MI W-4P (Withholding Certificate for Michigan Pension or Annuity Payments) for each pension or annuity.

View complete article: http://www.edkisscorni.com/blog/view/537

Here is a great KIP TIP from Cameron Huddleston, Contributing Editor, Kiplinger.com, regarding monitoring your elderly parents’ mail.

Financial scams are everywhere we turn. Elderly people are bombarded with donation solicitations in the mail. Now mind you, the majority of these solicitations are legitimate organizations, lobbying groups and political parties, but it can be very overwhelming with the volume that elderly people receive.

To help your parents, start by asking them which organizations matter most to them and try to develop a giving plan for only those groups. The next step is to register your parents with the Direct Marketing Association and removing their names from its national mailing list. This is free if you register on-line. This will not stop all solicitations, but at least slow it down a bit.

http://www.kiplinger.com/columns/kiptips/archives/why-you-should-monitor-your-elderly-parents-mail.html

Ever wonder why some tax returns are audited by the IRS while most are ignored? Well, there’s a whole host of reasons to this age-old question. The IRS audits only about 1% of all individual tax returns annually. The agency doesn’t have enough personnel and resources to examine each and every tax return filed during a year. So the odds are pretty low that your return will be picked for an audit. And of course, the only reason filers should worry about an audit is if they are cheating on their taxes.

1. Failure to report all taxable income.
2. Returns claiming the home-buyer credit.
3. Claiming large charitable deductions.
4. Home office deduction.
5. Business meals, travel and entertainment.
6. Claiming 100% business use of vehicle.
7. Claiming a loss for a hobby activity.
8. Cash businesses.
9. Failure to report a foreign bank account.
10. Engaging in currency transactions.
11. Math errors.
12. Taking higher-than-average deductions.

Have you ever commented on a person’s status on Facebook or sent out a Tweet that was a tad unprofessional? In today’s technological age, your snide comment or inappropriate picture on Facebook, Twitter or any other social media site could cause you to not be hired for a new position, or could potentially harm your current employment. More mature users of social media are more aware of how this can affect them, the main concern are your children or grandchildren, the up and coming high school and college age kids that are not thinking clearly when they post. More and more employers are doing a virtual background check before they hire new employees. What would they find if they did a background check on you?

There is an excellent article from Bloomberg regarding this topic. Click here to read the full article.

Be sure to get the most out of your FSA before it expires.  Watch this video from CBS News to learn how.

The IRS has noted an increase in tax-return-related scams, frequently involving unsuspecting taxpayers who normally do not have a filing requirement in the first place. These taxpayers are led to believe they should file a return with the IRS for tax credits, refunds or rebates for which they are not really entitled. Many of these recent scams have been targeted in the South and Midwest.

Most paid tax return preparers provide honest and professional service, but there are some who engage in fraud and other illegal activities.   Unscrupulous promoters deceive people into paying for advice on how to file false claims. Some promoters may charge unreasonable amounts for preparing legitimate returns that could have been prepared for free by the IRS or IRS sponsored Volunteer Income Tax Assistance partners. In other situations, identity theft is involved.

Taxpayers should be wary of any of the following:

• Fictitious claims for refunds or rebates based on excess or withheld Social Security benefits.
• Claims that Treasury Form 1080 can be used to transfer funds from the Social Security Administration to the IRS enabling a payout from the IRS.
• Unfamiliar for-profit tax services teaming up with local churches.
• Home-made flyers and brochures implying credits or refunds are available without proof of eligibility.
• Offers of free money with no documentation required.
• Promises of refunds for “Low Income – No Documents Tax Returns.”
• Claims for the expired Economic Recovery Credit Program or Recovery Rebate Credit. 
• Advice on claiming the Earned Income Tax Credit based on exaggerated reports of self-employment income.

In some cases non-existent Social Security refunds or rebates have been the bait used by the con artists.  In other situations, taxpayers deserve the tax credits they are promised but the preparer uses fictitious or inflated information on the return which results in a fraudulent return.

Flyers and advertisements for free money from the IRS, suggesting that the taxpayer can file with little or no documentation, have been appearing in community churches around the country. Promoters are targeting church congregations, exploiting their good intentions and credibility. These schemes also often spread by word of mouth among unsuspecting and well-intentioned people telling their friends and relatives. 
Promoters of these scams often prey upon low income individuals and the elderly. 

They build false hopes and charge people good money for bad advice.  In the end, the victims discover their claims are rejected or the refund barely exceeds what they paid the promoter.  Meanwhile, their money and the promoters are long gone.

Unsuspecting individuals are most likely to get caught up in scams and the IRS is warning all taxpayers, and those that help others prepare returns, to remain vigilant. If it sounds too good to be true, it probably is.

Anyone with questions about a tax credit or program should contact us for accurate information!

http://www.irs.gov/newsroom/article/0,,id=241789,00.html