Check WithHolding to Avoid a Tax Suprise!

Issue Number: Special Edition Tax Tip 2009-4

Inside This Issue

Check Withholding to Avoid a Tax Surprise

Video: Making Work Pay - Withholding Calculator

Audio: Making Work Pay - Withholding Calculator

With 2009 nearly half over, the Internal Revenue Service reminds individual taxpayers there is no better time to check their 2009 federal income tax withholding levels to make sure they do not face any surprises when returns are due next spring.

The Making Work Pay Credit lowered tax withholding rates this year for 120 million American households. However, particular taxpayers who fall into any of the following groups should review their tax withholding rates to ensure enough tax is withheld: multiple job holders, families in which both spouses work, workers who can be claimed as dependents by other taxpayers and pensioners.

Failure to adjust your withholding could result in potentially smaller refunds or may cause you to owe tax rather than receive a refund next year. So far in 2009, the average refund amount is $2,675 and 79 percent of all returns received a refund.

Because retirees typically have withholding from their pension payments, pension plan administrators or pension payors should be aware of the optional adjustment procedure for pension withholding announced in Notice 1036-P, Additional Withholding for Pensions for 2009.
Social security beneficiaries, supplemental security income recipients, disabled veterans and railroad retirees that receive this year’s one-time $250 economic recovery payment should be aware that the Making Work Pay credit will be reduced by the $250 payment amount. They may also want to review their withholding.

The IRS withholding calculator on IRS.gov can help a taxpayer compute the proper tax withholding. The worksheets in Publication 919, How Do I Adjust My Withholding?, can also be used to do the calculation. If the result suggests an adjustment is necessary, the taxpayer should submit a new Form W-4, Withholding Allowance Certificate, to his or her employer or adjust the amount of quarterly tax paid.

In addition, the IRS reminds unemployed workers that the first $2,400 of unemployment benefits they receive during 2009 are tax-free for federal income tax purposes. People who expect to receive more than that should consider having tax withheld from their benefit payments in excess of $2,400. Use Form W-4V, Voluntary Withholding Request, or the equivalent form provided by the payer to request withholding to begin or end.

Taxpayers should visit IRS.gov for more information about how to adjust federal income tax withholding. The Web site also has details on various tax incentives in the American Recovery and Reinvestment Act as well as downloadable forms and publications. Free tax forms and publications are also available by calling 1-800-TAX-FORM (1-800-829-3676).

Links:
The Making Work Pay Credit
Notice 1036-P, Additional Withholding for Pensions for 2009
IRS withholding calculator
Publication 919, How Do I Adjust My Withholding?
Related News Releases and legal guidance
Publication 4766, Making Work Pay Credit and Form W-4 Withholding Certificate

Prepare for Hurricanes by Safeguarding Tax Records

Issue Number: IR-2009-061
Inside This Issue

Prepare for Hurricanes by Safeguarding Tax Records

Podcast: English Spanish

WASHINGTON — With the 2009 hurricane season now underway, the Internal Revenue Service encourages individuals and businesses to safeguard themselves by taking a few simple steps.

Create a Backup Set of Records Electronically

Taxpayers should keep a set of backup records in a safe place. The backup should be stored away from the original set.

Keeping a backup set of records –– including, for example, bank statements, tax returns, insurance policies home, etc. –– is easier now that many financial institutions provide statements and documents electronically, and much financial information is available on the Internet. Even if the original records are provided only on paper, they can be scanned into an electronic format. With documents in electronic form, taxpayers can download them to a backup storage device, like an external hard drive, or burn them to a CD or DVD.

Document Valuables

Another step a taxpayer can take to prepare for disaster is to photograph or videotape the contents of his or her home, especially items of higher value. The IRS has a disaster loss workbook, Publication 584, which can help taxpayers compile a room-by-room list of belongings.
A photographic record can help an individual prove the market value of items for insurance and casualty loss claims. Photos should be stored with a friend or family member who lives outside the area.

Update Emergency Plans

Emergency plans should be reviewed annually. Personal and business situations change over time as do preparedness needs. When employers hire new employees or when a company or organization changes functions, plans should be updated accordingly and employees should be informed of the changes.

Check on Fiduciary Bonds

Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.

IRS Ready to Help

If disaster strikes, an affected taxpayer can call 1-866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues.

Back copies of tax returns and all attachments, including Forms W-2, can be requested by filing Form 4506, Request for Copy of Tax Return. Likewise, transcripts can be ordered using Form 4506-T, Request for Transcript of Tax Return. Returns or transcripts can also be ordered by calling 1-800-829-1040.

There is no fee for a transcript or tax return copy for a taxpayer located in a federal disaster area qualifying for individual assistance. Taxpayers should put the assigned Disaster Designation in red ink at the top of the request form.

Related Items:

Tax Relief in Disaster Situations
Frequently Asked Questions for Disaster Victims
Publication 552, Recordkeeping for Individuals
Publication 583, Starting a Business and Keeping Records

B Meyer Bookkeeping Services

Welcome to B. Meyer Bookkeeping Solutions


B Meyer Bookkeeping Solutions
www.bmeyerbookkeeping.com


Our goal is to provide our clients with the most up-to-date financial information so that they can make informed business decisions.

Experience is What Sets Us Apart From Our Competition!


B. MEYER BOOKEEPING PROFESSIONAL BIO

Barbara and Martin started B. Meyer Bookkeeping after identifying the need for quality, professional bookkeeping services, at a reasonable cost.
We have over 50 + years of combined experience in bookkeeping, and business management experience.

Barbara Meyer:

Barbara graduated from the University of Houston with a BBA in accounting.
She worked for several small to large corporations in the Houston area, culminating in her last position as a company controller.
In 2006, she established B. Meyer Bookkeeping, which started as a side business, and in 2007 began operating as a full time business.

Martin Meyer:

Martin Meyer is a Certified QuickBooks ProAdvisor, and is accredited by the National Association of Public Bookkeepers as a Certified Public Bookkeeper.
Martin’s father was an entrepreneur, so Martin learned about business early in life. He attended the University of Houston until he enlisted in the Army. Upon his return he entered the scrap metal business, and in 1992 he started his own scrap business, and later sold the business to one of his competitors. He learned while in business for himself how important is was to know the financial position of your company and has taken business and accounting courses to expand his knowledge.

Affiliations:

National Association of Public Bookkeepers
American Institute of Professional Bookkeepers
Better Business Bureau
National Association of Tax Professionals
Houston Networking News
University of Houston Professional Accountants Society
TSCPA-Houston Chapter-Student Auxiliary

PACKAGES OFFERED BY B. MEYER

SILVER PACKAGE

Accounting Strategy and Preparation: Free Consultation:
Initial conference to review your current recordkeeping and bookkeeping practices
Review accounting software
Consultation and guidance of the client’s accounting

Fundamental Bookkeeping Services:

Input Transactions including manually written checks, ATM/debit transactions, posting of cash receipts and deposits
Assign Items to Appropriate Accounts
Reconciliation of Bank Accounts
Financial Statements: Balance Sheet, Profit and Loss, Accounts Payable Aging, Accounts Receivable Aging
Year-End Reports for your CPA

GOLD PACKAGE

Gold Package includes the Silver Package plus the following:
Accounts Payable
Accounts Receivable
Assist with cash management

PLATINUM PACKAGE

Platinum Bookkeeping Services include developing of custom reports that enable you to better analyze your revenue and expenses and quarterly budget reviews. Examples of some of the services you can receive our Platinum Services include the Silver and Gold Packages plus these additional services:

Budgeting
Custom Designed Reports-Samples of some of the reports we can provide include:
Budget vs. Actual
Employee Payroll Reports
Project Analysis
Quarterly Budget Review

OTHER SERVICES OFFERED BY B. MEYER BOOKKEEPING SOLUTIONS
PAYROLL SERVICES:

Payroll Preparation
Direct deposit
Preparation of W-2 and W-3
We sometimes outsource these services if it is in the best interest of the client

INVOICING AND MAILING:

Preparation of Invoices
Mailing of Invoices

ACCOUNTS RECEIVABLE COLLECTION LETTERS:

Preparation of collection
Mailing of collection letters

CHECK PREPARATION:

List of current payables will be presented and must be returned initialed by each check to be cut and signed by person authorized to select checks to be paid
Preparing checks
Check printing (client company will provide check stock for this purpose)
Check signing – Company principal or someone authorize by principal to designate this authority to bookkeeping company
Mailing of checks
Pay bill through bank account must be signed off on by company principal, or other authority designated by company principal

ANY OTHER SERVICES CLIENT MAY REQUETS:

Custom Services will be handled on a case by case basis.
Business Plans

CUSTOM PACKAGES OFFERED BY B. MEYER BOOKKEEPING
CUSTOM DESIGNED PACKAGES

B. Meyer Bookkeeping Solutions recognizes that no two business are exactly alike, and that the needs of each business owner maybe different. This is why we decided to offer customized packages to our clients.

Each package will be designed around you the client and business owner. We will provide just the services that you have requested and the reports you need.
Please do not hesitate to inquiry about our custom packages designed just for you our client.

OTHER CUSTOMIZED SERVICES

Onsite QuickBooks Training
Monthly Review of Accounting Records
Quarterly Review of Accounting Records
Budget Forecasting

Our job is to Partner with You for Your Success!

B. MEYER BOOKKEEPING SOLUTIONS CONTACT INFORMATION

Barbara Meyer and Martin G Meyer, CPB
Certified Professional Bookkeeper
QuickBooks Certified ProAdvisor
B. Meyer Bookkeeping Services
2218 Squire Dobbins Dr
Sugar Land, Texas 77478

281-240-0326

email: mgmeyer@bmeyerbookkeeping.com
email: bmeyer@bmeyerbookkeeping.com

Website:http://www.bmeyerbookkeeping.com

What is Taxable Income?

WHAT IS TAXABLE INCOME?

What Income is Taxable? While most income you receive is generally considered taxable, there are some situations when certain types of income are partially taxed or not taxed at all.

Some common examples of items that are not included in your income are:
• Adoption Expense Reimbursements for qualifying expenses
• Child support payments • Gifts, bequests and inheritances
• Workers' compensation benefits
• Meals and Lodging for the convenience of your employer
• Compensatory Damages awarded for physical injury or physical sickness
• Welfare Benefits
• Cash Rebates from a dealer or manufacturer
• Economic Stimulus Payment received in 2008 Some income may be taxable under certain circumstance, but not taxable in other situations.

Examples of items that may or may not be included in your income are:

• Life Insurance. If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price.

• Scholarship or Fellowship Grant. If you are a candidate for a degree, you can exclude amounts you receive as a qualified scholarship or fellowship. Amounts used for room and board do not qualify. All other items—including income such as wages, salaries and tips—must be included in your income, unless it is specifically excluded by law. Taxable income may be in a form other than cash. One example of this is bartering, which is an exchange of property or services. The fair market value of goods and services exchanged is fully taxable and must be included as income on Form 1040 of both parties.

These examples are not all-inclusive.

For more information, visit the IRS Web site at IRS.gov to view or download Publication 525, Taxable and Nontaxable Income from the Forms and Publications section or call 800-TAX-FORM (800-829-3676). Link • Publication 525, Taxable and Nontaxable Income (PDF 1178.2KB)