Many were not ready to think about taxes when I originally pubished this newsletter in December. I hope you find it helpful now.
** A personal referral from me - For 16 years, each December, my CPA sends to her client base an annual tax newsletter and each year I share this newsletter with my friends, neighbors and family. I have published this year's newsletter below.
CERTIFIED PUBLIC ACCOUNTANT
P.O. Box 769
Montclair, New Jersey 07042
Tel 973-746-9609
Fax 973-352-6074
kryshall12@verizon.net
chall1249@yahoo.com
December 2009
This is my annual “newsletter” to get you ready for the 2010 tax season. Yes, it is that time of the year when it is necessary to plan for it.
There are several changes worth noting. First, the taxable gross wages for the 2010 social security tax is $108,600, the same as 2009, while the rate remains 6.20%. The taxable 2010 gross wages for Medicare remains unlimited, the rate remains 1.45%, the same as 2009. Because there is no Cost of Living Adjustment (COLA) for 2010, the gross wage for Social Security and Medicare limits will remain the same. Second, there are several tax credits still available for the 2009 tax year. For example the first-time homebuyer credit, the first $2,400 of unemployment is tax free, credit for sales taxes paid on a new 2009 automobile purchase and many more. You can get more information on The IRS website http://www.irs.gov/ .
December is the month for planning for your health insurance and retirement plans. Many employers have open enrollment and you may make any adjustments to your plans at this time. In addition this is an excellent time to check your withholding. Are you withholding enough? If you have to pay the taxing authorities, the federal government, more than $1,200 on April 15th then your withholding is incorrect. You can check your withholding by going to http://www.irs.gov/ and see Pub 15T. Self employed individuals need to make sure the correct amount of estimated taxes have been paid in by January 15, 2010. The states are a bit more difficult to calculate so the best solution would be to make sure your state withholding is equal to 100% of what you paid in the prior year. The same would hold true for estimated state taxes.
A note on non-cash charitable contributions, The Salvation Army now has a valuation guide available on its web site, http://www.salvationarmyusa.org/. You can use this guide to determine the value of your non cash donations. For automobiles, The IRS no longer accepts valuations stated in The Blue Book. The value of the automobile will be based on the money the charitable organization receives from selling it. It is best for you to sell your automobile and then donate the cash to the charity. Automobile donations are now a red flag.
In NJ there will be an increase in taxes. NJ Dept of Labor has increased its rate base to $29,700 up from $28,600 in 2009. The rate for the Family Leave Act is .12% up from .09% in 2009. Another example of tax increases in the State of NJ is if you have gross income (not taxable income) of $150,000 to $250,000 your property tax deduction will be limited to $5,000. If it is over $250,000 your property tax deduction will be zero. I expect that to change with the new incoming NJ governor.
NY has several new taxes; the tax affecting the most individuals will be the taxi surcharge. The second tax will be the metropolitan commuter transportation mobility tax. It is imposed on certain employers and self-employed individuals. See www.tax.state.ny.us/ for more information for NY. There are no other increases in taxes as of this writing.
A reminder to let your family and friends know about my accounting and tax service. In addition to preparing taxes I train individuals how to use Quickbooks and am an excellent bookkeeper. I can represent my clients before the Internal Revenue Service if necessary.
Please make your appointments early. If you have any questions please contact me.
Happy Holidays,
Krys Hall, CPA
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