Weirding Word®

12 Tax Deductions That Will Disappear This Year

A guest blog by Brian Wendroff

To address the budget and other issues, Congress is enacting more and more tax provisions on a temporary basis. Some become permanent while others expire by the end of the year. While CPA firms strive to stay on top of ever change in the Tax Code, it's almost impossible for the individual taxpayer.

So check out the following list of 12 last-chance opportunities for personal tax savings in 2009. Or see the complete list of 21 last-chance opportunities for business and personal tax deductions. That way you can at least say you saw it coming. Or going, as it were.

1. Income. Up to $2,400 of unemployment compensation is excluded from the gross income of the recipient. However, this exclusion will not be available for benefits received in tax years beginning after 2009 [IRC Sec. 85(c)].


2. Personal deductions. You can claim a deduction (whether you itemize or claim the standard deduction) for sales or excises taxes paid on the purchase of a new vehicle. The deduction (phased out at higher income levels) does not apply to purchases after December 31, 2009 [IRC Sec. 164(b)(6)(G)].


3. Personal deductions. If you claim the standard deduction, take an additional deduction for state and local property taxes, up to a maximum of $500 ($1,000 for joint return filers). The deduction is not available for tax years beginning after 2009 [IRC Sec. 63(c)(7)].


4. Personal deductions. You can elect to take an itemized deduction for state and local general sales taxes instead of an itemized deduction for state and local income taxes, but the election is available only for tax years beginning before Jan. 1, 2010 [IRC Sec. 164(b)(5)(I)].


5. Personal deductions. You can claim an above-the- line deduction for "qualified tuition and related expenses" paid for the enrollment or attendance of yourself, your spouse or a dependent at an eligible institution of higher education. The deduction cannot exceed $4,000 (phased out at higher income levels) and applies only to tax years beginning before January 1, 2010 [IRC Sec. 222(e)].


6. Personal deductions. The maximum deduction allowed annually for charitable donations is increased in the case of "qualified conservation contributions." The increased deduction is not available for donations after December 31, 2009 [IRC Sec. 170(b)(1)(E)].


7. Personal tax credits. If you haven't owned a home in the previous three years, you can claim a first-time homebuyer credit of up to $8,000 (phased out at higher income levels) for the purchase of a principal residence. The credit can be claimed only for homes purchased before December 1, 2009. It is rumored that this credit may rise to $15,000 in 2010, but that's still just a rumor. [IRC Sec. 36].


8. Alternative minimum tax. You can offset nonrefundable personal tax credits, such as the child and dependent care credit and the Lifetime Learning credit, against their alternative minimum liability. The offset will not be available for tax years beginning after 2009 [IRC Sec. 26(a)(2)].


9. Alternative minimum tax. In 2010, the exemption amounts used in calculating a client's alternative minimum taxable income of $70,950 for married couples filing a joint return and $46,700 for singles and heads of households are scheduled to drop to $45,000 and $33,750, respectively [IRC Sec. 55(d)(1)].


10. Retirement plans. The requirement that an IRA owner age 70 ½ or over must receive a minimum distribution annually is suspended for 2009, but will be reinstated in 2010 [IRC Sec. 401(a)(9)(H)].


11. Retirement plans. An IRA may exclude from income distributions of up to $100,000 annually if paid directly by the IRA trustee to charitable organization. The exclusion expires in tax years beginning after 2009 [IRC Sec. 408(d)(8)].


12. Employee benefits. If you are covered by employer- sponsored health plans and are laid off before January 1, 2010, you can qualify for subsidized plan continuation (COBRA) coverage for up to nine months. Employers can claim a credit against employment taxes for the subsidies provided to employees [IRC Sec. 6432]. This might change after 2010, so now's the time to get fired (just kidding).

Wendroff & Associates, LLC is a CPA firm that specializes in individual and business tax preparation, strategic financial consulting and outsourcing.

IRS Circular 230 Disclosure: Please be advised that the tax advice contained herein (including any attachments) is not intended or written by the practitioner to be used and cannot be used by the taxpayer for the purpose of avoiding any U.S. tax- related penalties that may be imposed on the taxpayer.

Weirding Word®, a division of G.L. Honeycutt Consulting, LLC, is a virtual publication department that provides editing, freelance writing, and publication and web design services.

Copyright 2007-2009 Gaea L. Honeycutt. All rights reserved.

Don't Use Twitter, Facebook, LinkedIn? Claim the Real Estate!

Out of a half-dozen presentations on social networking the last couple of months only one of the groups was trying to harness Web 2.0.  Some of the entrepreneurs in this group were doing more than others.  Some didn't really use the Twitter account they'd created, or the Facebook profile or the LinkedIn profile, but they'd developed an Internet presence and claimed the real estate.

Excuses I heard . . . "I don't have time for all of that."  "What am I supposed to do with it?"  "My clients don't use it."

Just because you can't imagine why you'd use a social networking site doesn't mean you shouldn't get on it.  Frankly, if you have time for a coffee run, then you have time to create a social networking account or two.  And, whenever was networking about only being where your current clients spend their time?

But, let's get down to the main point.  It's your brand!  Do you want someone else to control part of your brand?  Claim your real estate by creating accounts with your name and/or business name before other people use them.

For example, I'm always surprised to see how many Honeycutts there are in the world.  Because there are so many on the Internet, I was especially surprised that Honeycutt was available on Twitter.  Remembering how I lost out on the honeycuttconsulting.com domain a few years ago and ended up with honeycuttconsulting.us, I immediately swooped that sucker up.  Any search for a Honeycutt on Twitter brings me up. (Yes, I have Weirding Word®, too.)

Not only do you get to protect your brand by preventing others from using the name, you also increase your search engine optimization (SEO) -- you make it easier for people to find you in web searches.  And you get to list your website, blog, key words, and much more.  If that's not worth spending a little time on social networks, then I don't know what is.

Gaea Honeycutt
blog@weirdingword.com

Weirding Word®, a division of G.L. Honeycutt Consulting, LLC, is a virtual publication department that provides editing, freelance writing, and publication and web design services.

Copyright 2007-2009 Gaea L. Honeycutt. All rights reserved.

Obfuscate at Your Own Peril: Deliver Information People Can Understand

A guest blog by Sally Strackbein

Has this ever happened to you?

You're listening to a high powered speaker give an impressive presentation. But at times it's like you are hearing a foreign language. You have a good vocabulary, but you feel like you should have brought a dictionary. You find yourself jotting down words to look up later, and discover that you've missed key parts of the presentation.

You've been bamboozled by an obfuscator.

Obfuscation: "The activity of obscuring people's understanding, leaving them baffled or bewildered. To make so confused or opaque as to be difficult to perceive or understand." (www.Dictionary.com)

Beware of obfuscators. They sound brilliant. They must be brilliant because their vocabularies are so superior. Their incomprehensible erudite commentary must be important because no one can understand it.

I first learned the "value" of obfuscation when I decided to major in philosophy in college. I was searching for the meaning of life. I began with introductory classes. I read the assigned readings and wrote papers analyzing what I had read. My papers were clear, easy to understand and to the point. I received grades of "C" or "B-". Those grades confused me. What was I missing? I thought I understood what I was reading. I was not accustomed to getting poor grades. I was upset.

I decided to try an experiment. I used my thesaurus to find obscure words to replace my clear ones. I obfuscated everything I said. I replaced my easy to understand paragraphs with cognitive opaqueness yielding professorial accolades: grades of B+ and A.

I learned to communicate at a college level, using the most opaque words I could find in my thesaurus. My professors were impressed. Many business journals are written in this academic style as well. When I began to write computer user manuals and train people, I discovered that my language needed to be more accessible. I had to unlearn my college lessons and use language people could readily take in and remember.

As a communicator, is your goal to sound impressive? Or is it to deliver information that people can understand and use?

If you really want people to understand you, if you really want to make your point, don't force people to reach for a dictionary when you speak or write.

Weirding Word®, a division of G.L. Honeycutt Consulting, LLC, is a virtual publication department that provides editing, freelance writing, and publication and web design services.

Copyright 2007-2009 Gaea L. Honeycutt. All rights reserved.

CBC Foundation Guide to Stimulus Funds

Is the whole Stimulus Thing making your head spin? Everyone knows that there are large capital disbursements, discretionary funds in each Federal agency, pending grants and contracts in Federal agencies, and massive amounts of funds that will be distributed by states as the Recovery Act is implemented. But how do you access those funds for your own business or nonprofit?

The Congressional Black Caucus Foundation has published a guide, The American Recovery & Reinvestment Act of 2009:  A Resource Guide for African Americans. Drawing on information from an Obama-Biden Administration briefing for small business and other materials and resources, CBCF has highlighted critical issues and identified agencies responsible for administering funds and programs.  It includes targeted programs by topic/issue area, a description about how funding is determined, and a listing of where jobs can be created or saved.

The introduction emphasizes, "One of the most important components of this legislation is that it is designed to provide funding quickly . . . the funding will also go to projects and programs that demonstrate that the funding can be utilized quickly and effectively to improve communities."

In a NCBCP Black Women's Roundtable meeting yesterday, CBCF CEO Dr. Elsie L. Scott and Senior Research and Policy Analyst Dr. Alana C. Hackshaw reminded participants to monitor grants.gov, fedbizopps.gov and recovery.gov, as well as individual agency and state Recovery Act websites to stay abreast of developments and opportunities.

Download a copy from the CBCF website.

Gaea Honeycutt
blog@weirdingword.com

Weirding Word®, a division of G.L. Honeycutt Consulting, LLC, is a virtual publication department that provides editing, freelance writing, and publication and web design services.

Copyright 2007-2009 Gaea L. Honeycutt. All rights reserved.

Government Contracting: Opportunities and Trends

The Northern Virginia Black Chamber of Commerce convened a timely seminar on the keys to successful government contracting, the 8A program and the BRAC transition at the McLean Community Center. The expert panelists were Christopher Jones, a Business Development Specialist with the U.S. Small Business Administration; Dr. Andrea Y. Morris, Coordinator of Arlington's BRAC Transition Center; and William Welch, an attorney at General Counsel PC who specializes in government contracting and Federal procurement.

The main lessons emphasized for all business owners were:

• Understand the basics of starting your business

• Register with the Federal government through CCR (linked through the SBA site), and be sure to register with governments in the jurisdictions where you do business, including Virginia's eVA
• Obtain every minority, woman, and small business certification you can for the jurisdictions where you do business

Mr. Jones stressed the importance of marketing to contracting officers and hunting for the work, telling attendees, "Apply for anything on FedBizOps that you have the capacity to do." He also encouraged businesses to request a debriefing when they don't win a contract. And, Mr. Jones outlined some of the standards for obtaining an 8A certification.

Dr. Morris emphasized the opportunities available through BRAC, "One-third of the market is affected in just Crystal City, not to mention the rest of Arlington County." The mos ted affected industries right now are construction, plumbing, electric, furniture, research and technology, security, and geospatial. She told attendees to get on the websites every day to keep track of new opportunities.

"Form your business entity properly, get all of your licenses, and be clear on the steps and forms needed to operate in each jurisdiction," said Mr. Welch. A business owner needs to establish strong foundations and make sure she hires an attorney and an accountant who each know the specific industry.

With so much to cover, NVBCC will be holding more sessions this summer.

Gaea Honeycutt
blog@weirdingword.com

Weirding Word®, a division of G.L. Honeycutt Consulting, LLC, is a virtual publication department that provides editing, freelance writing, and publication and web design services.

Copyright 2007-2009 Gaea L. Honeycutt. All rights reserved.