- Income limits for excluding education savings bond interest increased – Your modified adjusted gross income (MAGI) must be less than $87,850 if you’re a single filer or less than $139,250 if you’re married filing jointly or a qualifying widow(er) in order to exclude education savings bond interest.
- Foreign earned income exclusion – The maximum exclusion is now $95,100.
- Standard mileage rates – The deductible costs of using your automobile for business have increased to 55.5 cents/mile and for getting medical care or moving to 23 cents/mile. The rate for charitable use has remained the same at 14 cents/mile.
- Personal exemption increased – The personal exemption is now $3,800.
- Standard deduction increased - The standard deduction is now $5,950 for single filers and $11,900 for married filing jointly.
- Alternative minimum tax (AMT) exemption amount decreased – The new AMT exemption amounts are $33,750 if single, $45,000 if married filing jointly or a qualifying widow(er), and $22,500 if married filing separately.
- Lifetime learning credit income limits decreased – Your modified adjusted gross income must be less than $52,000 if single or $104,000 if married filing jointly in order to claim the lifetime learning credit.
- Retirement savings contribution credit income limits increased – Your modified adjusted gross income (MAGI) must be less than $28,750 if single, $57,500 if married filing jointly, and $43,125 if head of household in order to claim the retirement savings contribution credit.
- Adoption credit or exclusion – The maximum amount of the adoption credit you can receive, or the maximum amount of employer-provided adoption benefits that you can exclude, has decreased to $12,650. Note that your modified adjusted gross income (MAGI) must be less than $229,710 in order to take advantage of it.
- Adoption credit no longer refundable – The adoption credit is no longer refundable starting in 2012.
- Earned Income Credit (EIC)- The income thresholds for claiming the EIC have changed slightly for 2012.
- If three or more children lived with you, single filers must earn less than $45,060 and married couples filing jointly less than $50,270.
- If two children lived with you, single filers must earn less than $41,592 and married couples filing jointly less than $47,162.
- If one child lived with you, single filers must earn less than $36,920 and married couples filing jointly less than $42,130.
- If a child did not live with you, single filers must earn less than $13,980 and married couples filing jointly less than $19,190.
- Also note that you cannot have more than $3,200 in investment income and still claim the credit.
Thursday, December 27, 2012
2012 Tax Changes
It seems that much of the focus has been on the upcoming changes to the 2013 tax year, you know the fiscal cliff, it still is important to remember that IRS tweaks the tax code each year based on expiring provisions and items required to adjusted for inflation. We have outlined some of the major changes that will affect your tax return this year according to Rapid Tax Blog.
Wednesday, December 19, 2012
S Corporation Fact Sheet
Saving Business Taxes with an S Corporation: A Short Primer
S corporations, or Sub chapter S corporations, produce several tax benefits as compared to sole proprietorships, partnerships, and C corporations.
The big benefit--and the one that people usually talk about--is the payroll tax savings.
To understand how this works, let me compare two alternatives: A sole proprietor making $90,000 a year and an S Corporation making $90,000 a year.
Of course, the taxes that a sole proprietor pays depends on his or her filing status, itemized deductions and family size, but typically such a person might pay about $12,000 in federal income taxes. The person might also pay another chunk in state income taxes.
In addition to these income taxes, the proprietor also pays a 15.3% self-employment tax on the $90,000 of business profits. Roughly, this self-employment tax (which is equivalent to Social security and Medicare tax) equals $13,000.
Things usually work differently for the S corporation, however. To make calculations easy, assume the S corporation is owned by a single shareholder. In this case, the S corporation must break the $90,000 of profit into two buckets: wages and the leftover (which is called a distributive share). If the wages equal $40,000 and the leftover distributive share equals $50,000, the business pays Social Security and Medicare taxes (equivalent to self-employment tax) equal to roughly $6,000.
In this case, even though the two businesses make the exact same amount of money, the S corporation pays roughly $7,000 less in tax each year.
By the way, in addition to the big benefit of self-employment tax reduction, S Corporations also provide two other useful benefits--benefits which are a little more difficult to quantify but still important nonetheless.
One such benefit is that S corporation losses (such as those that often occur in the early start-up years) can be used as tax deductions on the shareholder's personal income tax returns.
Another such benefit is that the S corporation isn't taxed on S corporation profits--at least by the federal government.
Once you've made the decision to structure your business as a corporation (most likely for the liability protection a corporation offers), you still have a decision to make: Will you form a C Corporation or an S Corporation?
Tax concerns often play a major role in this decision. Like the partnership business structure, S Corporations do not pay any federal income taxes. Instead, the business's profits and losses are passed through to the shareholders, who must then report the income and losses on their personal tax returns. Referred to as "single taxation," this process differs from C Corporations, which face "double taxation." That means C Corporations pay federal income tax, and any dividends paid to shareholders are taxed as well.
Although tax concerns are important, they don't tell the whole story. The advantages of forming an S
Corporation include:
- Eliminating double taxation: In an S corporation, profits and losses are passed through to shareholders, and taxes are only paid once. Check with your state to see how it handles S Corporations. Some states do not recognize S Corporations and will tax such businesses as a regular C Corporation. Some states charge S Corporations a state tax, although the corporation will not have to pay federal tax.
- Protection from liability: As the owner of an S Corporation, your personal assets are separate from the business's assets and are therefore protected in case any judgments occur against the business.
- More room for investors: S Corporations can have up to 100 shareholders.
- Easier accounting rules: S Corporations without any inventory can use the cash method of accounting, which is much simpler than the accrual method. Check with your accountant about which option makes sense for your business.
Here are some disadvantages of forming an S Corporation:
- Rules and fees: Like a C Corporation, S Corporations are required to file a number of official state and federal documents, including Articles of Incorporation and corporate minutes. They must also hold regular shareholder meetings and pay the required government fees.
- Shareholder restrictions: Realize that if an S Corporation has shareholders, the shareholders will be taxed for any income the company has, even if they did not receive any portion of that income. (In a C Corporation, shareholders are taxed only if they receive dividends.) In addition, S Corporations are only allowed to issue one class of stock, which may discourage some investors.
- Salary requirements: The Internal Revenue Service requires all officers and owners of an S Corporation to make a salary, even if the company is not yet making a profit. This could be problematic for new businesses struggling to make payroll. A "reasonable salary" is what a person with the appropriate skills needed for the position would be paid on the free market.
Source: all business.com
“You must pay taxes. But there’s no law that says you gotta leave a tip.” can’t quite remember who said it but I sure remember the quote.
S Corporations are a no brainer.
- The most popular form of business structure in America today. 60% of all corporation tax returns filed this year are S Corporations.
- Limited liability.
- Limited IRS exposure.
- Significant tax savings.
Now that you are incorporated there are three things you absolutely must do....or risk IRS problems
- Open a corporate checking account. Paying all corporate (business) bills from that checking account.
- Avoid paying any personal bills from that checking account.
- Pay yourself a salary. Mainly used to pay your personal income tax salary. The John Edwards tax loophole.
Donald C. Fuener E.A.
S Corporation Fact Sheet updated December 19, 2012
December 1, 2012 Client Newsletter
I
was talking with a long time client yesterday. Frankly I was venting.
Way back in December 2007 the law changed concerning the late filing of
S Corporation returns. Until 2008 if you filed your S Corporation late
there was no problem as long as the shareholders reported the correct
amount of taxable income or loss on their returns. Things have changed
dramatically. A late penalty revenue raiser was created in 2007. The
easiest way to explain why this very Draconian, extremely unfair
penalty, is to provide an example of what happens if a corporation
accidentally files a late return.
Here is the problem. An S Corporation return is in reality an information return. Similar to a W2 or 1099 form. No tax is owed on the S Corporation return. All income flows to the individual shareholders and is paid on their individual return. Since most taxpayers pay the tax owed with their return on a timely basis, there seems little point in assessing such a large penalty. It is overkill. Some of our clients have been assessed this late payment penalty in the past couple of years. In many cases the late filing penalty exceeded their total federal income tax liability. We have successfully gotten the penalty abated in all but one case...and that case is an extreme exception since the client somehow felt the need to represent themselves with IRS Appeals and got taken to the woodshed financially. But that is another story.
But there appears to be some good news. In researching the current status of S Corporation penalty I found a recent tax court case in which the tax court recently overruled the IRS (Ensyc Technologies, TC Summ. OP. 2012-55) and stated that forgetting to mail the return can be a “reasonable cause” for filing late and having the penalty waived.
The case revolved around an accountant who, each year, prepared the tax return for an S Corporation and mailed it to the company’s president to sign and mail to the IRS. One year he thought he had mailed the return to the company’s president to sign and mail to the IRS, but he had mistakenly filed it away instead. He did mail the K-1s to the shareholders, who used the data on their timely filed 1040s. Six months later, he mailed the corporate tax return, and the IRS assessed a penalty for late filing.
Keep in mind that each case is unique, and must be carefully evaluated. But if you’re faced with large penalties and an IRS fight, it pays to first review your case carefully rather than just “paying the penalty.” Call us we are here to help. We can only wish with all the political talk about tax fairness and fiscal cliffs maybe just maybe we will see a change in this penalty.
An S corporation cannot deduct health, dental, and other medical premiums for a shareholder who owns more than 2 percent. Their premiums should be tracked separately in the accounting system throughout the year.
This month you will be receiving a change in rate for your Illinois unemployment tax for 2013. Please help us to help you avoid paying late penalties and interest. Please forward the notice of rate that you receive from IDES to us right away.
As we get ready for the upcoming tax season we are asking you for a few comments about what you like about us and our service. I appreciate all the great comments from our clients so far. We are upgrading our marketing for the new tax season and real life clients with real life recommendations are great. Thanks for your help.
An
S-corporation with a calendar-year end (Jan 1-Dec 31) is required to
file the 1120S annual tax return on the 15th day of the third month
following the close of the tax year—or March 15th of the following year.
If the corporation has 3 shareholders, no extension of time to file was
submitted and the return was filed on July 16th, the late filing
penalty is calculated as follows:
Number of shareholders during the year = 3
Months late = 5 (March 16th – July 16th)
*if submitted on July 15th it’s only 4 months late
$195 penalty x (3 shareholders) x (5 months late) = $2,835
or $567 per month
Here is the problem. An S Corporation return is in reality an information return. Similar to a W2 or 1099 form. No tax is owed on the S Corporation return. All income flows to the individual shareholders and is paid on their individual return. Since most taxpayers pay the tax owed with their return on a timely basis, there seems little point in assessing such a large penalty. It is overkill. Some of our clients have been assessed this late payment penalty in the past couple of years. In many cases the late filing penalty exceeded their total federal income tax liability. We have successfully gotten the penalty abated in all but one case...and that case is an extreme exception since the client somehow felt the need to represent themselves with IRS Appeals and got taken to the woodshed financially. But that is another story.
But there appears to be some good news. In researching the current status of S Corporation penalty I found a recent tax court case in which the tax court recently overruled the IRS (Ensyc Technologies, TC Summ. OP. 2012-55) and stated that forgetting to mail the return can be a “reasonable cause” for filing late and having the penalty waived.
The case revolved around an accountant who, each year, prepared the tax return for an S Corporation and mailed it to the company’s president to sign and mail to the IRS. One year he thought he had mailed the return to the company’s president to sign and mail to the IRS, but he had mistakenly filed it away instead. He did mail the K-1s to the shareholders, who used the data on their timely filed 1040s. Six months later, he mailed the corporate tax return, and the IRS assessed a penalty for late filing.
Keep in mind that each case is unique, and must be carefully evaluated. But if you’re faced with large penalties and an IRS fight, it pays to first review your case carefully rather than just “paying the penalty.” Call us we are here to help. We can only wish with all the political talk about tax fairness and fiscal cliffs maybe just maybe we will see a change in this penalty.
An S corporation cannot deduct health, dental, and other medical premiums for a shareholder who owns more than 2 percent. Their premiums should be tracked separately in the accounting system throughout the year.
- If your corporation did not pay the health insurance premiums during the year, make sure the corporation reimburses you, write a check , before the end of the year.
- Before the final payroll run next month, we will calculate the total shareholder health, dental, and other medical insurance premiums paid or reimbursed by your corporation as this figure will be needed for the final payroll and the shareholder’s W-2.
- The amount of premiums for the year is paid to shareholder as payroll, but there is special payroll tax treatment for this payment. The amount is subject to Federal and State withholding, but it is not subject to social security or Medicare tax.
- On the W-2, we will record the amount of the premiums in box 1 wages, in the state wages, and in box 14 as “S/H Health Ins” or a similar description.
- Finally, on your individual tax return, the amount of shareholder health insurance is deducted as self-employed health insurance on the front of Form 1040
This month you will be receiving a change in rate for your Illinois unemployment tax for 2013. Please help us to help you avoid paying late penalties and interest. Please forward the notice of rate that you receive from IDES to us right away.
As we get ready for the upcoming tax season we are asking you for a few comments about what you like about us and our service. I appreciate all the great comments from our clients so far. We are upgrading our marketing for the new tax season and real life clients with real life recommendations are great. Thanks for your help.
Friday, November 30, 2012
IRS updates its 1099 K matching program
Accounting Today reports the IRS is taking a soft touch to matching busienss income:
The Internal Revenue Service has always been able to match individual tax returns against information statements and propose under-reporter adjustments that come in the form of CP2000 notices.
In September, the IRS started its first information return-matching program for business return Forms 1120, 1120S and 1065. This program matched business return incomes to the total amounts reported on all information returns.
This year, business taxpayers also started receiving Form 1099-K, Merchant Card and Third-party Network Payments, reporting amounts received from payment settlement entities (from debit/credit cards and third-party network payers such as PayPal). To avoid taxpayer burden, the IRS stated in a letter to the National Federation of Independent Business on February 9 that it will not require taxpayers to separately report amounts from Forms 1099-K on returns, and has no plans to do so in the future.
On November 16, the IRS announced that it will start questioning businesses with smaller-than-expected income, based on its analysis of Forms 1099-K reported to the business. Interestingly, the IRS cannot propose specific adjustments to the return because it can’t match Forms 1099-K directly to line items on 2011 business returns. However, the IRS is contacting taxpayers when it thinks that there is a discrepancy. The IRS determines this probability based on the taxpayer’s line of business and a perceived disproportionate share of credit/debit card and third-party network payments reported on Forms 1099-K, compared with gross receipts from other sources reported on the tax return.
In November, as reported by the National Association of Tax Professionals, the IRS indicated that it is starting three compliance initiatives:
>>>>>Read more by clicking here.
The Internal Revenue Service has always been able to match individual tax returns against information statements and propose under-reporter adjustments that come in the form of CP2000 notices.
In September, the IRS started its first information return-matching program for business return Forms 1120, 1120S and 1065. This program matched business return incomes to the total amounts reported on all information returns.
This year, business taxpayers also started receiving Form 1099-K, Merchant Card and Third-party Network Payments, reporting amounts received from payment settlement entities (from debit/credit cards and third-party network payers such as PayPal). To avoid taxpayer burden, the IRS stated in a letter to the National Federation of Independent Business on February 9 that it will not require taxpayers to separately report amounts from Forms 1099-K on returns, and has no plans to do so in the future.
On November 16, the IRS announced that it will start questioning businesses with smaller-than-expected income, based on its analysis of Forms 1099-K reported to the business. Interestingly, the IRS cannot propose specific adjustments to the return because it can’t match Forms 1099-K directly to line items on 2011 business returns. However, the IRS is contacting taxpayers when it thinks that there is a discrepancy. The IRS determines this probability based on the taxpayer’s line of business and a perceived disproportionate share of credit/debit card and third-party network payments reported on Forms 1099-K, compared with gross receipts from other sources reported on the tax return.
In November, as reported by the National Association of Tax Professionals, the IRS indicated that it is starting three compliance initiatives:
- A soft-touch inquiry that asks taxpayers to review their returns more closely;
- A correspondence audit; and
- An under-reporter notice and assessment, similar to the CP2000 automated under-reporter program used for individual income discrepancy adjustments.
>>>>>Read more by clicking here.
Monday, November 19, 2012
“Black Friday” Tax Planning Puts Taxes on Sale!
The
holidays are here, and millions of Americans kicked off the season with
“Black Friday” shopping. Braving the crowds and the cold, facing scorn
from family they’ve left behind, they line up at obscenely early hours
(or duck out of Thanksgiving dinner before the pumpkin pie is even
served) to save $20 on a DVD player or $40 on a flat-screen television.
It’s sad, but true, that most Americans spend more time planning their “Black Friday” shopping than they spend planning their taxes. But that can be an expensive mistake!
What if the IRS had a sale? What if the IRS let you discount your taxes by thousands of dollars, this year and every year to come? And what if they let you do it from the comfort of your home or your office, without lining up in the pre-dawn hours of a chilly November morning? Would you give thanks for a sale like that?
You’re probably not holding your breath for the scrooges at the IRS to hold a “sale.” The good news is, you don’t have to wait for that to happen. You just need a plan. Tax planning is the key to paying the legal minimum, especially with the “fiscal cliff” looming on the horizon. And a good tax plan can pay for a holiday season full of gifts and fun.
Call me today at (217) 241-4597 for your free Tax Analysis. We’ll find the mistakes and missed opportunities that may be costing you thousands today, and show you how “Black Friday” tax planning can save thousands more tomorrow. We guarantee you’ll give thanks for the savings, or we’ll donate $50 to your favorite soup kitchen. So call now to schedule your Analysis.
It’s sad, but true, that most Americans spend more time planning their “Black Friday” shopping than they spend planning their taxes. But that can be an expensive mistake!
What if the IRS had a sale? What if the IRS let you discount your taxes by thousands of dollars, this year and every year to come? And what if they let you do it from the comfort of your home or your office, without lining up in the pre-dawn hours of a chilly November morning? Would you give thanks for a sale like that?
You’re probably not holding your breath for the scrooges at the IRS to hold a “sale.” The good news is, you don’t have to wait for that to happen. You just need a plan. Tax planning is the key to paying the legal minimum, especially with the “fiscal cliff” looming on the horizon. And a good tax plan can pay for a holiday season full of gifts and fun.
Call me today at (217) 241-4597 for your free Tax Analysis. We’ll find the mistakes and missed opportunities that may be costing you thousands today, and show you how “Black Friday” tax planning can save thousands more tomorrow. We guarantee you’ll give thanks for the savings, or we’ll donate $50 to your favorite soup kitchen. So call now to schedule your Analysis.
Tuesday, November 13, 2012
Hurricane Sandy Charitable Relief Donations Reminder
While
many of us have been consumed by news of the 2012 election, we're all
sobered by the devastation of Hurricane Sandy. If you plan to help out,
keep in mind some of these tips for making the most of your storm relief
donations.
- You can deduct up to 50% of your adjusted gross income for cash gifts to "501(c)(3) organizations" or public charities working on behalf of storm victims.
- If you give more than $250, you'll need a written receipt dated no later than the filing date of your return.
- Gifts of clothing, furniture, electronics, and household items are deductible at fair-market value, such as the price they would bring at a resale shop. Consider buying software, available at any office-supply store, for tracking your gifts and their value. You might be surprised how much you save!
- Congress and the IRS have cracked down on inflated car and truck deductions. If you give away a vehicle, you can deduct its fair market value only if the charity uses it for "exempt" purposes (such as a church using a van to drive parishioners). If the charity sells the vehicle, your deduction is limited to the charity's actual proceeds. If you claim more than $500, you'll generally have to attach a certification to your return that states the vehicle was sold in an arm's-length sale and includes the gross proceeds from the sale.
Friday, October 26, 2012
11-01-12 End of the year tax planning client newsletter
When
you read this our long national nightmare....the presidential
election... will be nearly or finally over. Depending on whoever wins
the newly elected or re-elected president will have a very full plate.
Especially in our imaginary tax world. As you are probably aware
December 31, 2012 is the date many tax cuts and deductions are scheduled
to expire. Some call it Taxmageddon. Federal Reserve Chairman Bernanke
labeled it the financial cliff. I just published on our blog a long
discussion about what is happening. Unless Congress and our president
do something. Just something. It is worth taking a look at.
Meanwhile time to get back to business. With October 15 behind us and April 15 still comfortably far away, it’s a good time to start boning up on ways to save money since things are starting to get serious. The end of the year is less than two months away.
Version 31 of the same story.
Sally Smith, was a smart businessperson, she knew the basics of year-end tax planning.
1. Postpone income to next year.
2. Pay as many expenses as possible this year.
3. Keep inventory level low.
4. If you are going to make a capital investment, do so before the end of the year.
5. Double check for missing deductions.
6. Invest in an IRA for similar type account.
Sally owns a retail store and faced the year end with her eyes wide open. Sally knew that a few strategies would pay big dividends on April 15. Here is what she did to reduce her tax liability:
Since Sally was operating her business on a cash basis and relied upon cash sales through her cash register, she did not have the opportunity to postpone much income. She has established a policy for many years to close her books on December 28, which gave her opportunity to defer three days of sales to next year.
Sally then reviewed her bills. She started to write out checks for her expenses. She wrote checks for all expenses due, even if some expenses were due in January. She dated her checks for December 28, 2012 to be sure that the expenses were recorded for this year on December's bookkeeping. Her checks written totaled to almost $10,000. Her one simple strategy, accelerating expenses meant that Sally saved over $4,000.00 in income tax this year.
Since you pay tax on your inventory at the end of the year, Sally knew that reducing her inventory to the lowest amount possible was important for her. First, she decided to review her inventory to see if she had things that have been gathering dust. She found items that in fact had been sitting around for more than three years. She decided to mark those items down and immediately started an inventory reduction sale for those items. She knew that the value of her inventory was based upon her costs of the items, not the selling price. She also knew that items that were partially used or supplies not for resale did not count as part of her inventory.
Sally had been debating whether to purchase a new computer for her business. The local computer store was offering a "six-months same as cash" financing offer for the purchase of new computers. Sally decided to purchase the computer now, electing to take advantage of the special financing offer. She knew that she could deduct the full purchase price of the computer on her tax return, even though she did not pay for it right away. When you purchase something using a credit card or borrow the money, as Sally did, you get to deduct the amount when you purchase the item. The $3,000 computer saved Sally $1,200 in income tax.
As part of her year-end review Sally took a minute to see if perhaps she has recorded all her business expenses as part of her monthly record keeping. She knew that the credit card that she had been using exclusively for business had some interest payments that were not included. She made a note to record her year-end statement from her credit card company to make sure that it was included as interest paid on her year-end documents to her accountant. In addition, she decided to review her automobile mileage and other receipts for expenses that she might not have had for her business and had a chance to record in her monthly record keeping.
Surprisingly Sally read last month’s newsletter to all corporate clients and decided to go online. She took our advice and subscribed to Wave accounting. She took advantage of downloading her bank account and discovered how easy it was to enter her data. She really liked it and is recommending it to other small business owners she knows.
Sally also knew that she had time to make her annual IRA contribution until April 15 of next year. She decided not to make it till next April. She also made a note to talk to us about Roth IRA accounts and analyze the different options available to her. One of her options was a self-employed Pension Plan commonly called a SEP. IRA's. SEP. IRA's do not have to be opened or funded until the due date of your return. That means that Sally doesn't have to open or make a contribution to a SEP. IRA for the 2011 tax year until April 15, 2013. She can also contribute a larger amount to her SEP. IRA than she could to her regular IRA. However, she was reluctant to open one because she also knew that she would have to contribute an amount to her full time employees. She made a note to ask her accountant what that contribution would be and what her resultant tax savings would equal. She also thought her accountant might have ideas on how to "cushion" the employee's contribution issue.
Sally knew that her year end review of her tax situation saved her almost $7,000 this year. She made a note to review her year end information before we prepared her tax return in 2013.
SAVE TAXES...REMEMBER BEFORE JANUARY 1, 2013
1) Postpone income to next year.
2) Pay as many expenses as possible this year, even if you do not send the checks off till January, be sure to write the checks for the expenses.
3) Keep inventory at a low level.
4) If you are going to make a capital investment, do so before the end of the year.
5) Double check for missing deductions.
6) Invest in an IRA or similar type account.
Meanwhile time to get back to business. With October 15 behind us and April 15 still comfortably far away, it’s a good time to start boning up on ways to save money since things are starting to get serious. The end of the year is less than two months away.
Version 31 of the same story.
Sally Smith, was a smart businessperson, she knew the basics of year-end tax planning.
1. Postpone income to next year.
2. Pay as many expenses as possible this year.
3. Keep inventory level low.
4. If you are going to make a capital investment, do so before the end of the year.
5. Double check for missing deductions.
6. Invest in an IRA for similar type account.
Sally owns a retail store and faced the year end with her eyes wide open. Sally knew that a few strategies would pay big dividends on April 15. Here is what she did to reduce her tax liability:
Since Sally was operating her business on a cash basis and relied upon cash sales through her cash register, she did not have the opportunity to postpone much income. She has established a policy for many years to close her books on December 28, which gave her opportunity to defer three days of sales to next year.
Sally then reviewed her bills. She started to write out checks for her expenses. She wrote checks for all expenses due, even if some expenses were due in January. She dated her checks for December 28, 2012 to be sure that the expenses were recorded for this year on December's bookkeeping. Her checks written totaled to almost $10,000. Her one simple strategy, accelerating expenses meant that Sally saved over $4,000.00 in income tax this year.
Since you pay tax on your inventory at the end of the year, Sally knew that reducing her inventory to the lowest amount possible was important for her. First, she decided to review her inventory to see if she had things that have been gathering dust. She found items that in fact had been sitting around for more than three years. She decided to mark those items down and immediately started an inventory reduction sale for those items. She knew that the value of her inventory was based upon her costs of the items, not the selling price. She also knew that items that were partially used or supplies not for resale did not count as part of her inventory.
Sally had been debating whether to purchase a new computer for her business. The local computer store was offering a "six-months same as cash" financing offer for the purchase of new computers. Sally decided to purchase the computer now, electing to take advantage of the special financing offer. She knew that she could deduct the full purchase price of the computer on her tax return, even though she did not pay for it right away. When you purchase something using a credit card or borrow the money, as Sally did, you get to deduct the amount when you purchase the item. The $3,000 computer saved Sally $1,200 in income tax.
As part of her year-end review Sally took a minute to see if perhaps she has recorded all her business expenses as part of her monthly record keeping. She knew that the credit card that she had been using exclusively for business had some interest payments that were not included. She made a note to record her year-end statement from her credit card company to make sure that it was included as interest paid on her year-end documents to her accountant. In addition, she decided to review her automobile mileage and other receipts for expenses that she might not have had for her business and had a chance to record in her monthly record keeping.
Surprisingly Sally read last month’s newsletter to all corporate clients and decided to go online. She took our advice and subscribed to Wave accounting. She took advantage of downloading her bank account and discovered how easy it was to enter her data. She really liked it and is recommending it to other small business owners she knows.
Sally also knew that she had time to make her annual IRA contribution until April 15 of next year. She decided not to make it till next April. She also made a note to talk to us about Roth IRA accounts and analyze the different options available to her. One of her options was a self-employed Pension Plan commonly called a SEP. IRA's. SEP. IRA's do not have to be opened or funded until the due date of your return. That means that Sally doesn't have to open or make a contribution to a SEP. IRA for the 2011 tax year until April 15, 2013. She can also contribute a larger amount to her SEP. IRA than she could to her regular IRA. However, she was reluctant to open one because she also knew that she would have to contribute an amount to her full time employees. She made a note to ask her accountant what that contribution would be and what her resultant tax savings would equal. She also thought her accountant might have ideas on how to "cushion" the employee's contribution issue.
Sally knew that her year end review of her tax situation saved her almost $7,000 this year. She made a note to review her year end information before we prepared her tax return in 2013.
SAVE TAXES...REMEMBER BEFORE JANUARY 1, 2013
1) Postpone income to next year.
2) Pay as many expenses as possible this year, even if you do not send the checks off till January, be sure to write the checks for the expenses.
3) Keep inventory at a low level.
4) If you are going to make a capital investment, do so before the end of the year.
5) Double check for missing deductions.
6) Invest in an IRA or similar type account.
The upcoming "Taxmageddon" and three simple ideas to help with this years taxes
October
15 is the official end of the tax filing season for 2011 income tax
returns. We made it almost. Can’t stop thinking here did 2012 go? I
starting writing this email to you last week while the presidential
debate was on the television in the background. Of course there was
much discussion, about what is going to happen to tax rates and who was
lying about it. What I found striking was no mention of the coming
“Taxmageddon” – the date the largest tax hikes in the history of America
will take effect. I don’t recall it if there was. This impending tax
increase is mostly the result of the expiration of many long-standing
policies that all expire at the end of 2012.
It is estimated the the combined effect of these apparently unprecedented tax hikes will be $494 billion in one year. They will affect families and small businesses in several waves on January 1, 2013.
I have summarized the first wave below my source being the Americans for Tax Reform website:
First Wave: Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for small business owners, families, and investors (later re-upped by President Obama and in 2010). The following tax hikes will occur on January 1, 2013:
Personal income tax rates will rise on January 1, 2013. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which the majority of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:
It is estimated the the combined effect of these apparently unprecedented tax hikes will be $494 billion in one year. They will affect families and small businesses in several waves on January 1, 2013.
I have summarized the first wave below my source being the Americans for Tax Reform website:
First Wave: Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for small business owners, families, and investors (later re-upped by President Obama and in 2010). The following tax hikes will occur on January 1, 2013:
Personal income tax rates will rise on January 1, 2013. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which the majority of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:
-The 10% bracket rises to a new and expanded 15%
-The 25% bracket rises to 28%
-The 28% bracket rises to 31%
-The 33% bracket rises to 36%
-The 35% bracket rises to 39.6%
Higher taxes on marriage and family coming on January 1, 2013. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of taxable income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples relative to the single level.
Middle Class Death Tax returns on January 1, 2013. The death tax is currently 35% with an exemption of $5 million ($10 million for married couples). For those dying on or after January 1 2013, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones.
Higher tax rates on savers and investors on January 1, 2013. The capital gains tax will rise from 15 percent this year to 23.8 percent in 2013. The top dividends tax will rise from 15 percent this year to 43.4 percent in 2013. This is because of scheduled rate hikes plus Obamacare’s investment surtax.
Mark Steber writes in the Huffington Post:
Taxmageddon means different things to different people, and it's potentially not good for anybody. For some it may mean lower paychecks starting the first of the year. For others it may be a smaller tax refund when they file tax returns in 2013. Finally, it may mean a delay to filing tax returns this year if new legislation is passed late.
Congress and the president have developed a habit of waiting until the very last minute to act on pressing tax legislation. I don’t think there is a chance that 2012 will be any different. We are crossing our fingers that something is going to be done before as Federal Reserve chairman Ben Bernanke called it a “massive fiscal cliff” takes effect.
Turning to this year are some ideas to help with your current taxes.
Adjust your tax withholding
Did you get a big refund this year? Or did you owe the IRS a lot? Either way, adjust your payroll withholding. Your goal is to get the Goldilocks "just right" amount of income taxes taken out of your paychecks so that it's as close as possible to your eventual tax bill.
Make a charitable deduction now.
Instead of waiting until December 31 to donate to your favorite nonprofit organization, give now. Your charity will be thrilled to get your money or unwanted household items now. And if you itemize, you've got an entry on the charities section of Schedule A. Just remember to get a receipt!
Contribute to your retirement plan now.
Don't forget to give to yourself! The sooner you put money into your retirement plans, the longer it has to grow to the amount that will ensure the type of post-work lifestyle you want. Put the maximum into your IRA, Roth or traditional. Don't forget your company's 401(k) plan.
Thanks for your trust and being a client.
Don’t forget to use your $50.00 vacation gift certificate from our sister company Planet Travel. You can use it to book your next cruise or vacation package. Lost it? Just tell us to make sure you apply your client gift certificate when you call 217-241-0180.
Monday, October 1, 2012
October 1, 2012 Client Newsletter
This is probably the most important letter I will write to you this year. There
is no doubt that you, as an S Corporation owner, have made very good
tax move. The popularity of S Corporations is growing each year. More
than six million S Corporation returns will be filed this year. They
offer more advantages than any other choice of business entity today.
You have chosen wisely.
However, there is one rather large S Corporation pitfall that I am required by IRS Circular 230 to warn you about.
The number one IRS audit risk for S Corporations is salary and wages paid to officers of the corporation.
Here is what the IRS says about wages and salary paid to officers of Subchapter S Corporations:
Although this IRS interpretation of reasonable salary was updated in October 2011, it is somewhat arbitrary, it is extremely important not to overlook paying yourself a salary before the end of the year.
The IRS can collect payroll taxes on officer compensation, and the penalty for failing to pay payroll taxes is 100% of the taxes owed. S-Corporations will avoid this payroll tax penalty by paying shareholder-employees a reasonable compensation.
What should you do? Don’t panic. Call us. We can help. There is still time to fix any oversights.
Remember what Ben Franklin said an ounce of prevention is worth a pound of cure. He also said that there are only two certain things in life: death and taxes.
Start keeping records now not next September.
Corporate extensions ended last month and I spent the last few weeks preparing and filing returns for the remaining stragglers. I have to tell you how amazed I was to find people starting to organize last years’ figures, some that were incurred more than 19 months ago. I don’t think I can remember what I spent last week let alone more than a whole year and an half ago. In the old days we built our business on bookkeeping....an era before desktop computers and the internet. Nowadays the computer has revolutionized your small business recordkeeping. Here are three options, all involving computers, you can try to make things a little easier. Don’t struggle. Don’t miss out valuable deductions. Make record keeping part of your daily routine.
1. Go online. Free advertiser supported online accounting software is available. Probably the most popular software online is Wave. Here is a link to there website http://waveaccounting.com/. It is easy. Fairly comprehensive. Working with your tax guy is easy, too. Just invite us as a Guest Collaborator and we can both see your data, securely, in real time. Perhaps the best part is the automatic download your bank account into your accounting records limiting the amount of data input you have to do. Advantages? Iit is free. It is intuitive. No need to change the way you are doing business today. We like wave accounting so much we became a Wave accounting pro advisor.
2. Consider a stand alone accounting software. We recommend the Quickbooks clone Avanquest Bookkeeper 2012. This program offers more bang for the bucks than the 800 pound elephant Quickbooks. It is $39.95. What do you get for your money? A fully functioning accounting software that includes credit card processing for no additional charge.
3. The ubiquitous Quickbooks. It is expensive. Requires yearly updates. And it seems that you are constantly bombarded with additional add-ons to buy. However, the accounting community has embraced it as the defacto standard that our client’s are using to keep track of their records. We work every day with Quickbooks.
I know that there are other methods and systems. I have always taken the position that what works for you works for me. However, I suggest that you give the Wave accounting folks a try first and help you not miss all those deductions next year.
One of the most puzzling aspects of S corporation taxation is how 2% shareholders, that’s you, treat their health insurance on their tax return.
The general rule is that the health insurance of a greater than 2 percent S corporation shareholder is a taxable fringe benefit. In other words, you can claim health insurance deductions for all your employees but not for your own family at the corporate level. While this sounds unfair, it all washes out on your individual tax return.
Now is the time to make sure that you have reported your health insurance correctly in order to get the best deduction. Even though the law was enacted and clarified late in 2007 (IRS Notice 2008-1), we are still seeing errors on Forms K-1 and W-2s coming from payroll companies and our fellow accountants – and those errors are expensive to fix after December 31. Please note - if you have been purchasing health insurance coverage for your employees, the expense is deductible as health insurance and is generally not taxable to your employees.
The problem addressed by IRS Notice 2008-1 is the “more-than-2%-shareholder-employee’s” expense. Here are the steps to ensure deductibility at both the corporation and personal levels:
THE ACTUAL DEDUCTION IS TAKEN AT THE COMPANY LEVEL ONLY, so your total ordinary income reportable on your K-1 will be reduced by the health insurance deduction. If this seems like a complicated way to take a deduction, we agree with you! We have no idea why Congress and the IRS made this so difficult, but we do know that if you follow these procedures, your health insurance payments receive a good deduction and if you DO NOT follow these procedures, you are limited to a Schedule A Itemized Deduction—generally not a good deduction.
We all know that car and truck expenses for trips on behalf of your trade or business are a deductible business expense. Since I am in the mood this month to cover the three toughest tax topics that small business corporation owners face let’s explore the crazy tax world of correctly deducting your vehicle expenses. This discussion is courtesy of our Tax Coach software system.
Your first step involves calculating your Business Use Percentage (BUP) for your vehicle. The IRS divides mileage into three categories: 1) business; 2) commuting; and 3) personal. Ordinary commuting and personal trips are nondeductible. Trips from home to your first business stop and trips from your last business stop to home are personal. (Daily trips to the bank, post office, and similar stops where you perform no service don’t qualify.)
Travel between temporary business stops is deductible. So, for example, if you leave home, make six business stops, meet a prospect for dinner, then drive home, your mileage between your first stop and the restaurant is deductible. However, if you have a regular business stop (one that you make at least 8 to 10 times in a six-month period) that you expect to last less than a year, you can count those as business miles, too. If home is your principal place of business, then all business trips are deductible.
Once you’ve calculated your BUP, you have two ways to calculate your deduction:
Don’t assume that easier record keeping justifies settling for the “one size fits all” allowance. It’s the same for every vehicle, no matter how big or expensive. And the wrong choice can cost you thousands. The American Automobile Association ("AAA") estimates that in 2010 actual costs per mile exceed the IRS flat rate in almost all categories of vehicles and driving habits, at a gasoline cost of $2.88/gallon remember those days.
If you own rather than lease your car, you can switch from the allowance to actual expenses. You'll have to use straight-line, rather than accelerated depreciation. You can’t go the other direction, switching from actual expenses to the allowance, if you’ve claimed any first-year expensing or accelerated depreciation.
The IRS approves four methods to track business miles. All of them require “adequate records or other sufficient evidence” to support business use. This means logging mileage at least weekly and keeping receipts for all expenses over $75.
Clear as mud. We advocate a third system that seems to work for most clients. Actual expenses with a clear policy that states that personal use of the vehicle is not allowed with the exception of commuting to and from your place of business. You will have to pay taxes on the “implied income” derived for the commuting portion of the vehicle. This system only works if you have another vehicle for personal use.
I strongly encourage you to contact me to discuss your current situation one on one. In fact I will buy you lunch if you want.
However, there is one rather large S Corporation pitfall that I am required by IRS Circular 230 to warn you about.
The number one IRS audit risk for S Corporations is salary and wages paid to officers of the corporation.
Here is what the IRS says about wages and salary paid to officers of Subchapter S Corporations:
Corporate
officers are specifically included within the definition of employee
for FICA (Federal Insurance Contributions Act), FUTA (Federal
Unemployment Tax Act) and federal income tax withholding under the
Internal Revenue Code. When corporate officers perform services for the
corporation, and receive or are entitled to receive payments, their
compensation is generally considered wages. Subchapter S corporations
should treat payments for services to officers as wages and not as
distributions of cash and property or loans to shareholders.
S
corporations are corporations that elect to pass corporate income,
losses, deductions, and credits through to their shareholders for
federal tax purposes. Shareholders of S corporations report the
flow-through of income and losses on their personal tax returns and are
assessed tax at their individual income tax rates.
The
Internal Revenue Code establishes that any officer of a corporation,
including S corporations, is an employee of the corporation for federal
employment tax purposes. S corporations should not attempt to avoid
paying employment taxes by having their officers treat their
compensation as cash distributions, payments of personal expenses,
and/or loans rather than as wages.
Although this IRS interpretation of reasonable salary was updated in October 2011, it is somewhat arbitrary, it is extremely important not to overlook paying yourself a salary before the end of the year.
The IRS can collect payroll taxes on officer compensation, and the penalty for failing to pay payroll taxes is 100% of the taxes owed. S-Corporations will avoid this payroll tax penalty by paying shareholder-employees a reasonable compensation.
What should you do? Don’t panic. Call us. We can help. There is still time to fix any oversights.
Remember what Ben Franklin said an ounce of prevention is worth a pound of cure. He also said that there are only two certain things in life: death and taxes.
Start keeping records now not next September.
Corporate extensions ended last month and I spent the last few weeks preparing and filing returns for the remaining stragglers. I have to tell you how amazed I was to find people starting to organize last years’ figures, some that were incurred more than 19 months ago. I don’t think I can remember what I spent last week let alone more than a whole year and an half ago. In the old days we built our business on bookkeeping....an era before desktop computers and the internet. Nowadays the computer has revolutionized your small business recordkeeping. Here are three options, all involving computers, you can try to make things a little easier. Don’t struggle. Don’t miss out valuable deductions. Make record keeping part of your daily routine.
1. Go online. Free advertiser supported online accounting software is available. Probably the most popular software online is Wave. Here is a link to there website http://waveaccounting.com/. It is easy. Fairly comprehensive. Working with your tax guy is easy, too. Just invite us as a Guest Collaborator and we can both see your data, securely, in real time. Perhaps the best part is the automatic download your bank account into your accounting records limiting the amount of data input you have to do. Advantages? Iit is free. It is intuitive. No need to change the way you are doing business today. We like wave accounting so much we became a Wave accounting pro advisor.
2. Consider a stand alone accounting software. We recommend the Quickbooks clone Avanquest Bookkeeper 2012. This program offers more bang for the bucks than the 800 pound elephant Quickbooks. It is $39.95. What do you get for your money? A fully functioning accounting software that includes credit card processing for no additional charge.
3. The ubiquitous Quickbooks. It is expensive. Requires yearly updates. And it seems that you are constantly bombarded with additional add-ons to buy. However, the accounting community has embraced it as the defacto standard that our client’s are using to keep track of their records. We work every day with Quickbooks.
I know that there are other methods and systems. I have always taken the position that what works for you works for me. However, I suggest that you give the Wave accounting folks a try first and help you not miss all those deductions next year.
One of the most puzzling aspects of S corporation taxation is how 2% shareholders, that’s you, treat their health insurance on their tax return.
The general rule is that the health insurance of a greater than 2 percent S corporation shareholder is a taxable fringe benefit. In other words, you can claim health insurance deductions for all your employees but not for your own family at the corporate level. While this sounds unfair, it all washes out on your individual tax return.
Now is the time to make sure that you have reported your health insurance correctly in order to get the best deduction. Even though the law was enacted and clarified late in 2007 (IRS Notice 2008-1), we are still seeing errors on Forms K-1 and W-2s coming from payroll companies and our fellow accountants – and those errors are expensive to fix after December 31. Please note - if you have been purchasing health insurance coverage for your employees, the expense is deductible as health insurance and is generally not taxable to your employees.
The problem addressed by IRS Notice 2008-1 is the “more-than-2%-shareholder-employee’s” expense. Here are the steps to ensure deductibility at both the corporation and personal levels:
- Shareholder-Employee. If your company is profitable, you should be paying yourself “reasonable” compensation – that is the law as we discussed earlier. Compensation is payroll, complete with payroll taxation. In order for health insurance premium expense to be deductible at the company level, it must not exceed your personal earned income. Thus, you must have wages from your company in order to be eligible to have health insurance paid by the company. If your wages are $10,000, then you could have health insurance of $10,000. That makes sense, doesn’t it? If you are not an employee of a company or a dependent of an employee, why on earth would the company pay your insurance for you? If your company is not profitable, you are not required to take payroll, but then your health insurance is not deductible at the company level (you can still take it as a distribution and deduct it on Schedule A Itemized Deductions).
- Who Owns the Accident and Health Plan? Much confusion here was explained in Notice 2008-1. The company can own a group plan or you can own an individual plan. Important: the company must pay for the premiums either directly or as a reimbursement to you, the shareholder, for your personally owned policy. Do not fail to have the company reimburse you if you buy an individual policy. If the company does not reimburse you, the company cannot take the deduction – and you lose. You can, however, still take Schedule A Itemized Deduction.
- Bookkeeping. On your corporation books, you will have expense for health insurance whether you pay it directly or you reimburse yourself. It is a company level expense/deduction. It is NOT a distribution to you. Ultimately, it becomes a payroll expense, deductible ONLY at the corporation level.
- Payroll Reporting. During the year, when you file your payroll quarterly reports (Form 941 and your state unemployment reports), you will report your health insurance premiums as PAYROLL that is NOT subject to Social Security or Medicare. You will also not be subject to federal and generally state withholding ).
- W-2 Year End. Your W-2 will include health insurance premiums in your gross Box 1 wages, but will NOT include the premiums in Box 3 or Box 5 (Social Security and Medicare). You should also see your health insurance premiums in Box 14 as S Corp Health/Medical Insurance. We will not report your health insurance premiums as a K-1 distribution item, because if we do you may ONLY take a Schedule A Itemized Deduction and NOT a page one deduction. It is imperative that your health insurance premium be reported on your W-2 to assure the best tax treatment.
- Your 1040. You will report your total Box 1 wages on your personal tax return. And then you will take a Page One deduction for the health insurance premiums. The result is a wash. This is correct. Bizarre, but correct. It’s not the way we would have done it. But it is what it is. Read on.
THE ACTUAL DEDUCTION IS TAKEN AT THE COMPANY LEVEL ONLY, so your total ordinary income reportable on your K-1 will be reduced by the health insurance deduction. If this seems like a complicated way to take a deduction, we agree with you! We have no idea why Congress and the IRS made this so difficult, but we do know that if you follow these procedures, your health insurance payments receive a good deduction and if you DO NOT follow these procedures, you are limited to a Schedule A Itemized Deduction—generally not a good deduction.
We all know that car and truck expenses for trips on behalf of your trade or business are a deductible business expense. Since I am in the mood this month to cover the three toughest tax topics that small business corporation owners face let’s explore the crazy tax world of correctly deducting your vehicle expenses. This discussion is courtesy of our Tax Coach software system.
Your first step involves calculating your Business Use Percentage (BUP) for your vehicle. The IRS divides mileage into three categories: 1) business; 2) commuting; and 3) personal. Ordinary commuting and personal trips are nondeductible. Trips from home to your first business stop and trips from your last business stop to home are personal. (Daily trips to the bank, post office, and similar stops where you perform no service don’t qualify.)
Travel between temporary business stops is deductible. So, for example, if you leave home, make six business stops, meet a prospect for dinner, then drive home, your mileage between your first stop and the restaurant is deductible. However, if you have a regular business stop (one that you make at least 8 to 10 times in a six-month period) that you expect to last less than a year, you can count those as business miles, too. If home is your principal place of business, then all business trips are deductible.
Once you’ve calculated your BUP, you have two ways to calculate your deduction:
- The mileage allowance is 55.5 cents/mile (2012) plus parking, tolls, and your BUP of interest on your car loan and state and local personal property tax on the vehicle. The allowance for charitable use of the vehicle is capped at just 14 cents/mile, and for medical and moving use, 19 cents/mile.
- With “actual expenses,” deduct your BUP of all expenses:
- Depreciation and interest (purchased vehicles)
- Lease payments (leased vehicles)
- Insurance
- Gasoline, oil, and car washes
- Tires, maintenance, repairs
- Licenses, tags, and personal property tax
- Parking and tolls
Don’t assume that easier record keeping justifies settling for the “one size fits all” allowance. It’s the same for every vehicle, no matter how big or expensive. And the wrong choice can cost you thousands. The American Automobile Association ("AAA") estimates that in 2010 actual costs per mile exceed the IRS flat rate in almost all categories of vehicles and driving habits, at a gasoline cost of $2.88/gallon remember those days.
If you own rather than lease your car, you can switch from the allowance to actual expenses. You'll have to use straight-line, rather than accelerated depreciation. You can’t go the other direction, switching from actual expenses to the allowance, if you’ve claimed any first-year expensing or accelerated depreciation.
The IRS approves four methods to track business miles. All of them require “adequate records or other sufficient evidence” to support business use. This means logging mileage at least weekly and keeping receipts for all expenses over $75.
- “Brute Force.” Record every business mile for the year. Divide by the year’s total miles to calculate BUP. (If you use more than one car for business, this is the method you have to use.)
- “90 days.” Record business miles for a “typical” 90-day period. Calculate BUP for that period, and use it for the entire year.
- “First Week.” Record business miles for the first week of each month. Calculate BUP and use it for the entire year.
- “Simplified.” Record starting and ending mileage for a 90-day period. Record personal and commuting miles for that period, and assume all the rest are for business. Calculate BUP and use it for the entire year.
Clear as mud. We advocate a third system that seems to work for most clients. Actual expenses with a clear policy that states that personal use of the vehicle is not allowed with the exception of commuting to and from your place of business. You will have to pay taxes on the “implied income” derived for the commuting portion of the vehicle. This system only works if you have another vehicle for personal use.
I strongly encourage you to contact me to discuss your current situation one on one. In fact I will buy you lunch if you want.
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