Free Tough Times Seminar Invitation

We know that times are tough…we know that it is harder to make a profit in today’s economy than ever before, and that attracting and keeping customers is more difficult as they have less to spend.  We also know that you opened your business to pursue a dream, and that, even though it may be challenging right now, you still have what it takes to turn your dream into a success.

That’s why we’re offering business owners like you the opportunity to meet with some of the area’s top tax and business accounting professionals to share some of their tips with you.   Over the years, we have noticed that business owners in particular do not always take advantage of some of the tax breaks that are available.  These tax breaks are not “loopholes”; they are incentives built into the tax code to allow you to keep more of your income so that you can continue to grow your business.

Please join us at one of our FREE upcoming seminars so that we can help your business succeed and grow.  Our February seminars are scheduled for:

              Wednesday February 3^rd at 5:30 PM

              Thursday February 11^th at 5:30 PM

              Saturday February 20^th at 10:00 AM

In addition to offering tax planning and preparation, we can help in other areas of your business operations including:

-         Payroll services: Tax Partners’ payroll services are far less expensive than other providers and less time-consuming and frustrating for business owners than doing it themselves.  We ensure that your payroll and paperwork is done right and on time.

-         Marketing services: ALM Direct Marketing Solutions offers free evaluations of your sales and recommends marketing that fits your budget and achieves the desired results.  We are in the business of connecting companies to customers and can help you reach new customers or communicate more effectively with the ones you already have.

We will also be prepared to discuss these areas and more during our time together!  We hope that you’ll have time to join us for an informative, idea-filled session that will help you achieve your goals and dreams.  Space is limited, so please RSVP today by calling 217-241-4597 or emailing us at taxpartner@gmail.com

If you are interested in learning more about how we might help you, but can’t attend any of the seminars listed above, please call us to schedule a free personal consultation at a time that is convenient for you!  We’d be happy to help!

Why we had second thoughts and finally said no to refund anticipation loans.

A client came into the office last week and wanted us to prepare his taxes again this year.  Good news.  However, he said he didn't want to go the refund anticipation loan route like he did last year.  Why?  He couldn't cash his refund loan check.  So the allure of getting his money quicker...approximately seven days...after paying a hefty bank fee, turned into a real problem.

"Nobody would cash my check without paying an additional fee" he said.  " So I finally deposited the money into my bank and waited five business days until they released the funds.  I wasn't really ahead of the game.  I lost money."

Refund anticipation loans (RAL) are bank loans secured by taxpayer's refunds.  They are marketed to moderate and low income consumers, those who we believe can least afford it.  They have proven to be huge source of revenue to the largest tax preparation firms in American. Hundreds of millions of dollars for H & R Block.  Never popular with consumer groups, the IRS, or state regulators because of their high costs, refund anticipation loans are generally filed by those taxpayers elgible to received earned income credit. Earned income credit is designed to assist low income working families by supplementing their refund based on family size and income earned.  The Consumer Federation of America estimated that various fees and charges drained $2.1 billion from the earned income credit program last year. 

This year the refund anticipation loan world became even dicier.

Panic struck the tax preparation industry on Christmas Eve 2009 after it was revealed that just weeks away from the beginning of the tax season rush, California-based Pacific Capital Bancorp, a major player in the lucrative refund anticipation loan business, was ordered by federal banking regulators to halt its RAL origination services.


The announcement was a shock to the tax prep industry, which includes big names such as Jackson-Hewitt Tax Service, Liberty Tax and H&R Block, all of which rely on RALs for a healthy percentage of their income.
A troubled bank these days isn't catastrophic except for the fact that fewer than a handful of banks fund RALs, loans sold to customers in advance of their government tax refund. Such a small number of RAL originators leaves little wiggle room should one find itself in trouble, as is the case with PCB's Santa Barbara Bank & Trust.


Now we learn that Illinois, Gov. Pat Quinn has barred currency-exchange stores from offering the loans without state permission. Is more regulation on the way?

This month, the IRS said  it would review RAL practices and its own Debt Indicator program and refund delivery service as part of its efforts to protect taxpayers using tax-prep services.  

And finally we learn that some lenders are now saying it will take two to three weeks before some taxpayers to get their refund anticipation loan because of new scrutiny by the remaining lenders.  So what is the point when you can get your refund in about ten days electronically filing your tax return with a direct deposit.

So does this mean an end to the refund anticipation loan program?

Probably.  But the current recession has seen somewhat of a resurgence in popularity of the program with some tax preparers.

We weighed the possibility of losing some billing by opting out of the program this year versus the long term client good will by saying don't spend all that money to get your refund back this year.  We landed on the side of our clients.

January 24, 2010 Client Update

We have finished virtually all W-2 forms and have turned our attention to 1099 forms for your non-employees.  Remember that all forms have to be mailed no later than February 16, 2010 to avoid any IRS inquiry. We will mail any necessary copies to the IRS and the Social Security Administration on your behalf. We do strive for perfection but occasionally we miss.  Please let us know if there is a problem or any questions about your employees W-2 forms.

Interestingly the IRS changed the deadline last year for mailing 1099 brokerage and retirement accounts to February 15th or later if the 15th falls on a weekend.  Congress in 2008 changed the law, requiring brokers to include cost basis statements for securities sold when they send their annual 1099 forms to their customers. This later due date has frustrated some clients expecting refunds when it came time to file their taxes, no 1099, no filing, delayed refund.

Speaking of delays, the Illinois Department of Revenue has yet to release, as of today, the final version of its 1040 and schedules to mail/file your 2009 income tax return.  Although you can efile the Illinois return, you cannot mail it in. Unbelievable.     

If the IRS Commissioner has his way, Congress may legislatively fix the Internal Revenue Code to match the modern-day use of employer-provided cell phones. Currently, when an employee engages in personal use of an employer-provided cell phone, the employer is required to report that personal usage as income to the employee. For many employers, such as you and me, distinguishing between business and personal use is so burdensome that they simply have neglected to comply with the law; risking the consequences if audited by the IRS.

However, IRS Commissioner Doug Shulman recently issued an announcement declaring that the current law is so obsolete, the IRS has asked Congress to enact legislation so that the personal use of employer-provided cell phones will no longer be taxable. Importantly, the Commissioner’s announcement does not suggest that the IRS will not enforce the current law.  Indeed, last June, the IRS issued Notice 2009-46 seeking comments on three suggested approaches for determining the amount of personal cell phone usage to be included in employee income:  minimal personal use requiring an employee to keep track, safe harbor percentage method, perhaps 75 %, or statistical sampling of the employee's usage.    It should be mentioned that the aforementioned Notice and its three methodologies was not well-received by the general public, let alone employers and their tax advisers.

Remember the due date for your corporate return is March 15, 2010.  If you do not want us to apply for an automatic six month extension for filing your income tax return, please let us know.