If you live on the east coast, the last two weeks have been an experience to say the least. High winds and copious amounts of water inadvertently created moats around and throughout many homes. As the victims of Hurricane Irene dry out their basements, the IRS recently announced tax relief for the victims of Hurricane Irene.

For those who are unaware, corporations and partnerships that extended the due date of their tax return filings from March 15th & April 17th to September 15th have been given more time to file their tax returns.

Here’s an overview:

1. Certain taxpayers in North Carolina, New Jersey, New York, Vermont and Puerto Rico will receive tax relief, and other locations added by FEMA.

2. The IRS postponed certain tax filings and payment deadlines to Oct. 31, 2011, instead of September 15th.

3. The relief is for corporations and businesses that previously extended the due date of their 2010 tax returns until Sept. 15, 2011, in addition to individuals and businesses that received a similar extension until Oct. 17.

Tax Relief Disaster Situations –

http://www.irs.gov/newsroom/article/0,,id=108362,00.html

The relief is great but the IRS should consider going one step further by allowing the victims of Hurricane Irene the ability to increase the casualty losses as a result of the hurricane. Individuals are generally limited to a loss of $3,000…and in most cases, that could only be the cost of an appliance!

Regardless, we’ll be busy preparing corporate and partnership tax returns but send us an email if you have any questions, thoughts or comments!

Email:
info(at)EbongEka.com
or
info(at)EricorpConsulting.com

Comedian Seth Myers recently said “(The) Debt Showdown is like a chess match where both sides think the goal is to throw the most chess pieces out the window”. The debt ceiling debate has some obvious ramifications. For one, the debt limit uncertainty is handcuffing the financial markets, as investors and small business owners stand on the sideline waiting for the inevitable. State and Local governments will also suffer from the debt ceiling uncertainty due to a potential downgrade on credit ratings.

Here’s how a credit downgrade affects state and local governments:

State and local governments that are planning to finance public works projects are afraid that a US Government default will greatly affect those projects. If the federal rating is downgraded, credit rating agencies (like Moody’s) will assess whether the state and local jurisdictions under review deserve better credit than the US government does. Downgrades on state and local jurisdictions could cost state and local jurisdictions hundreds of millions of dollars in higher interest rates and expensive financing options.

Problems with financing of Public works projects can lead to:
a. Higher unemployment due to public works projects stopping,
b. Higher state and local taxes to make up the shortfall,
c. Lower levels of adequate government services.

The debt crisis is debilitating and not only affects small business, but can also have a direct effect on your county or city’s ability to build that new road, fix your existing highway and create new jobs!

Let’s hope they get their act together!

Let’s face it…Audits of any kind aren’t enjoyable, especially audits from the Internal Revenue Service (IRS).

It’s been two months since April 18th and you’ve hopefully submitted your tax returns. If you owe the IRS money, chances are you’ve already received an invoice. Instead of an invoice, some other people have received ‘audit’ inquiry letters.

Plenty of small businesses have been audited…it’s the nature of the beast! Small businesses have a lot more access to tax deductions than employees do. Therefore, there is a greater threat for tax cheating. This increases the chances of an audit.

Even I have experienced and survived an IRS audit! More importantly, I used the same techniques that I use with my clients to resolve the issues. I recently received a “No Change Letter”.

Once the IRS is satisfied with the records that have been submitted, he/she will letter stating that there won’t be any changes to the tax return.

You may receive an IRS letter for the following reasons:

1. You owe more in taxes but need a payment plan because you can’t afford to pay it immediately.
2. You’re under audit.

Here are a few tips to help you if you’ve received a letter from the IRS:

a. Don’t panic – The issue can generally be resolved with the proper strategy.

b. Consult a professional – There are three types of professionals that can represent your interests in front of the IRS: Enrolled Agent, Attorney and a Certified Public Accountant (CPA). The professional you hire will help you conduct a strategy that increases the chances of success.

c. Tighten Up Your Books – Get your books and accounting records in good shape! That will be your saving grace and not to mention, you’re audit defense.

Audit letters or IRS correspondence can be scary. The experience is a learning opportunity but with the right strategy you’ll be successful.

Send me an email info(at)EbongEka.com me if you have any questions about taxes and IRS audits!

Watch My Segment with Laura Ingle on FoxNews.com Live

The Senate just shot down the request by banks to delay new rules that would greatly slash the fees that banks charge retailers to process debit card transactions. These are also known as swipe fees. It’s been reported that the banks and these companies have made approximately $13 to $20 billion last year in these swipe fees!

The rules were part of the Dodd-Frank Financial Regulations Law set to be implemented on July 21st, 2011. If you’re a small business and accept debit cards, here’s how the new rules will affect your business:

1. Small Business finally gets a bailout – Your debit card processing fees will drop from 44 cents to a rate between 7 and 12 cents.

2. Stick it to the Big Guy! – This rule affects the big banks. Small banks, banks with $10 billion in assets or less, are exempted from these new rules.

4. Not Every Bank! – Approximately 100 banks and 3 credit unions would be exempt. So contact your bank or debit card processing company to find out if you should expect your fees to drop!

4. Payback from Banks! – Banks that are subject to this rule have threatened making changes (retribution) to their existing customer accounts due to loss revenue. Banks may consider the following: imposing limits on debit cards, increasing checking account fees and implementing different fee structures.

5. Big Isn’t Always Better! – Not every bank will be subject to this rule and community banks/credit unions can offer your business comparable services to big banks at a lower cost.

Tax day is upon us and many people wait until the last minute to file their income tax returns. Regardless of whether you have hired a CPA or prepared the returns yourself, you have enough to worry about.

Before you file your tax returns, here are four last minute tax tips to remember:

1. Extensions: If you can’t file your tax return by April 18th, don’t panic! You can file an extension. But remember the extension ONLY gives you more time to file your tax return. You have to pay any taxes you owe by the due date.

If your return is late you will have the following penalties/interest:

a. Penalty — Failure to File; 5% of the unpaid tax, up to 25%
b. Penalty — Failure to Pay; ½ of 1% of your unpaid tax
c. Interest on the taxes due; the interest rate is adjusted every quarter

Visit msnbc.com for breaking news, world news, and news about the economy

Continued

3. Important Tax Credits & Deductions: Every year, millions of people leave tax breaks that they qualify for on the table.
a. Health Care Premiums for Self Employed: If you’re self-employed and not covered by an employer-paid plan, though, you can deduct 100% your health insurance premiums (to the extent of your net income) “above the line.”
b. Making Work Pay – you can qualify for up to $400 as a tax credit. The credit begins to phase out if your earned is greater than $75,000. The credit is completely eliminated if your earned income is $95,000.

4. IRS Smart Phone App: The IRS recently introduced a new smartphone application. If you’re expecting a tax refund, you can monitor the status of your tax refund via your smart phone. It’s also a great way to get tax updates!

Visit msnbc.com for breaking news, world news, and news about the economy

Jansing & Co. – MSNBC

Tax day is upon us and many people wait until the last minute to file their income tax returns. Regardless of whether you have hired a CPA or prepared the returns yourself, you have enough to worry about. Before you file your tax returns, here are four last minute tax tips to remember:
1. Extensions: If you can’t file your tax return by April 18th, don’t panic! You can file an extension. But remember the extension ONLY gives you more time to file your tax return. You have to pay any taxes you owe by the due date. If your return is late you will have the following penalties/interest:
a. Penalty – Failure to File; 5% of the unpaid tax, up to 25%
b. Penalty – Failure to Pay; ½ of 1% of your unpaid tax
c. Interest on the taxes due; the interest rate is adjusted every quarter

2. Independent Contractors: If you’re an independent contractor, you can offset your income with your business expenses. The key here is to make sure you keep all your receipts. The expenses also have to be “ordinary and necessary”. One example is the home office deduction!