about rpa small business tax services retirement planning services & fees contact us email us     Dear Clients: We wish all of you and your families a Merry Christmas and Happy New Year. As we move into 2010, we continue to see large changes in our economy as well as new tax laws with final tax law for 2009 expected to be passed by congress over the next few weeks. Our office in Baxter continues to grow along with the Fort Mill community even in these tough economic times. However, the Baxter area continues to see new changes daily with a good deal of properties up for lease along with several office suites in our close vicinity up for sale. In fact, many of you may have traveled by my office to see a “office for sale” sign out front. Please note this is the office suite directly above me, we are not moving. Recently we have made a change in signage which will be discussed in later newsletters as our internal financial planner has decided to close his office in Fort Mill after three years of success in our local market. We have been planning for the onset of tax season over the past few weeks and are excited about seeing you again this year. Personal organizers will go out to our clients within the next week. As in past years, this is a tool for you to use in collecting the information necessary to complete your tax return as well as a questionnaire to allow us to know more about your personal finances during the past year. Please review this organizer prior to visiting our office and use it to attach the many tax documents you will receive in the next few weeks. Once you have reviewed and collected all of the information necessary, please call our office for an appointment with one of our tax advisors to begin the process of completing your return. We would like to meet with everyone when processing your individual tax returns, but we do understand sometimes that is not possible. As necessary, please drop off the documentation to our office and we will process the information and perform analysis required to complete your return. New for 2009 processing, we will need for you to plan to arrive at the office a few minutes early to review a new procedures document, privacy policy and engagement letter. We look forward to seeing you in person soon. Please make note of the Due Dates below:             + January 15th : Final personal estimated tax payment due             + February 2 : W2s and 1099s must be issued             + February 2 : Year End Payroll Returns due to Federal and State Agencies             + March 15th : Corporation Tax Returns Due             + April 15th : Partnership and Personal Tax Returns Due         Update on our Legislative body: As I have met with many of you and explained, we are in the middle of a game of chess with or legislators regarding new or tax law patches.  As of today, the House has passed a temporary patch bill for the current tax laws which will patch many items back to the way they were patched for 2008.  This means we will see AMT levels remain about the same as in 2008, teacher’s out of pocket deduction, and state sales tax deduction.  We believe many of the items covered by this patch will finally come to an end in 2009 with a push for additional tax revenues to pay off the spending of the current President and congress.  One of the winners this year seems to be Nascar track operations. Additional accelerated depreciation will be allowed on items at the tracks across the country (Est. $45 mil).  A lot more pressure is being put on congress to justify any tax breaks with the amount of people it will assist.  More to come as this new bill moves to the Senate. Update From the IRS: Very recently, I met with an IRS agent and a client regarding back payroll taxes which are owed.  It was interesting to learn the IRS is currently operating at about 78% employment due to the baby boomers retirement plan from the IRS union.  It is estimated the IRS will lose about 34% of their workers to retirement over the next two years.  The Charlotte office alone has 27 job openings.  With penalty rates increasing to cover the “cash for clunkers” program, shortage of agents, and the increase in computerized exams, it is very important every notice is responded to in a timely manner.  Our current experience is averaging 2 hours for a simple request and several follow ups to ensure the correction has been made by the IRS.  As always we recommend contacting your CPA prior to discussing any issue with the IRS.  You want to make sure you are properly represented by a professional in these matters. IRS standard Mileage rate decrease: The IRS has released the standard mileage rates for deducting auto expenses in 2010.  For business use, the mileage rate has decreased to $.50 per mile, down from $.55 used for 2009.  Medical and moving mileage standard rate has decreased to $.165 per mile. Beware, Obama is going to stimulate Small Business: In recent speeches, we hear new incentives to stimulate the small business economy are being worked on by congress.  Ideas include excluding capital gains from small business investments, “cash for caulkers” allowing deductions for consumers who invest in energy efficient weatherizing projects, and credits to expand job creation.  We will begin to see additional details in the news over the next few weeks as congress starts discussions.  Each item will have to be justified by a corresponding increase in taxation in other areas.     Good News: Uncle Sam is offering a generous Federal Tax Credit to those who purchase a qualifying electric low speed vehicle (LSV), on or before December 31, 2009. Although traditional golf carts are not actually covered by the credit, many of the qualifying models available look like golf carts and come equipped with lights and rear view mirrors. The only catch is that you have to make sure that you purchase a qualifying vehicle to get the tax credit. Qualifing vehicles include four-wheeled vehicles that draw propulsion using a rechargeable battery with at least four kilowatt hours of capacity, The actual amount of the tax credit varies depending upon the capacity of the battery. The minimum credit is $2,500.00. The amount of the credit actually issued is equal to the sum of $2,500.00 plus $417.00 for each kilowatt-hour of traction battery capacity in excess of four kilowatt-hours. The maximum credit can range from $ 7,500 to $ 15,000, depending on the gross vehicle weight rating of the vehicle. The credit applies to all new 2008, 2009 and 2010 low speed vehicles “LSV” purchased after January 1, 2009 and before December 31st, 2009.       Bad News: MEDIA ADVISORY (11/18/09) Columbia, SC... As a matter of information, Internal Revenue Code Section 30D provides a federal income  tax credit for certain qualified plug-in electric motor vehicles.  The credit is allowed for certain low speed  vehicles, including some vehicles that may be called "golf carts." (The credit specifically provides that it is  not allowed for vehicles "manufactured primarily for off-road use, such as primarily for use on a golf course,"  so although some vehicles that qualify for the credit may be commonly referred to as golf carts, the low speed  vehicles that qualify for the credit are not considered golf carts used primarily on golf courses.) The Department of Revenue cannot provide any information on what vehicles or types of vehicles qualify for  this federal credit. South Carolina does not adopt Internal Revenue Code Section 30D and has no income tax credit for golf carts  or other low speed electric motor vehicles.   Visit us online. Copyright 2009. All Rights Reserved.     ROBERT PALMER & ASSOCIATES 1171 Market Street, Suite 101, Fort Mill, SC 29708 803.547.7676