Form 8863 Education Credits Delayed

IRS announced on Monday, January 28^th that they will NOT be processing Form 8863 Education Credits beginning on January 30^th.  Instead, it becomes one of the forms that is being delayed until late February or early March.  This is a fairly common form that will impact many taxpayers.  We have already processed some returns with this form.  We anticipate these taxes to be rejected and held until the IRS approoves e-filing the return.

IRS begins processing 2012 tax returns Wednesday, January 30, 2013.

For a lot of our clients expecting refunds the very good news is that IRS will now finally begin processing returns. This means the time frame for issuing refunds will not begin before January 30. The IRS issues most refunds in less than 21 days from the day they receive your tax return for processing. Even though the IRS issues most refunds in less than 21 days, it’s possible your tax return may require additional review and take longer. Beginning January 30, you can use the improved Where’s My Refund? tool, which this year will provide personalized information about your own tax return.

Dan Kennedy lists the five behaviors to avoid if you want to be successful

Dan Kennedy is one our favorite small business marketing gurus.  I have read a bunch of his books and have even followed some of his advice go figure. 


In his companies' blog Dave Dee writes:


We are always talking about what to do to be successful, but we don’t always talk about the behaviors that lead to failure. And part of becoming successful is eliminating the bad behaviors. Of course, if you don’t know what those are, it’s hard to get rid of them, right?

Here are some of the top behaviors that lead people to frustration, struggle and even failure:

1) Not investing in lead generation. Dan Kennedy says, “A business without a mailing list isn’t a business.” EVERY business should have a strategy for capturing names—not just from people who have purchased your products or services, but for prospects as well. Each new name acquired is a “gateway” to new business, repeat business, and referrals you wouldn’t otherwise have. You can create the greatest marketing campaign in the world, but if you don’t have a list of prospects to send it to or are unwilling to spend money to build a list, you are dead in the water.
 
2) Investing too heavily in one strategy. Too often I see business owners use only the Internet for all of their advertising. Even worse, is using just one Internet strategy—like only sending emails, or only using Pay Per Click to drive traffic to their site. This is an error of EPIC proportions. I admit I’ve even fallen into only using the Internet myself, but I guarantee you it’s not a trap I will fall into again.
In Dan Kennedy’s book, No B.S. Business Success In The New Economy, he says, “One is a very bad number, anywhere you find it…if one media produces a disproportionate percentage of your customers, you are subject to being summarily put out of business.” Even the biggest Internet marketers on the planet know they must integrate online and offline strategies…and that the marriage of these two is where their riches lie.

3) Not knowing who your ideal target market is. At Dan Kennedy’s Mailbox Millionaire seminar, Dan said, “At least half of the battle is won via selection, not ‘creative’ message, copy, offer, etc.” Mediocre marketing aimed at a very well selected target market will get superior results. However the best marketing message in the world aimed at a poorly selected target market will get you mediocre results at best. You can’t expect to effectively craft a powerful marketing message to attract your ideal customer, client or patient, if you don’t first have a very clear picture of who that person is. Clearly define who it is you are catering to, first. Then craft your message.

4) Not knowing how to sell. The most successful people I know are also master salespeople. If you don’t know how to sell, you are going to continue to struggle. In fact, in Sales and Persuasion Strategies, Dan discusses the ONE thing you must never do that incredibly 99% of all business owners do that creates a huge obstacle to selling. Once people remove their selling obstacles, not only do they see their profits soar, but they speed up the sale and stop competing for business too.

5) Not taking action. The one thing you will hear over and over and over again from our most successful members—and members who have transformed their business in what seems like overnight is to take “massive action.” You can think about getting rich all day long, but unless you DO something, customers are not going to magically appear and start giving you money. Worry less about failure and just get moving. The reality is the men and women of ACTION are the ones who are the wealthiest.

 Read more by clicking on this link.

IRS Offers Simpler Option For Calculating Your Office In the Home Deduction

From Tax Pro Today


Small business owners and employees who work from home and who maintain a qualifying home office will be able to deduct up to $1,500 per year. The new option allows qualified taxpayers to deduct annually $5 per square foot of home office space on up to 300 square feet, for as much as $1,500 in deductions. To take advantage of the new option, taxpayers will complete a much simpler version of the current 43-line form.



Read more by clicking on this link

Why Does 20 Minutes of Tax Prepartion Work Cost $300.00?

"We recommend that you locate your office where the household income is $30,000 or less," the Instant Tax manual counsels. Each franchisee attends a week of training sessions where "unbelievable emphasis was put on poor minorities," according to former franchisee Habtom Ghebremichael, who recalls a trainer telling his group, "We cater to the 'hood." His archetypal customer, Ogbazion says, is an assistant manager at a fast-food restaurant earning $19,000 a year. "They've burned the banks," he says. "They've bounced too many checks. They've mismanaged their finances." Experience has taught him that a few amenities (a ficus tree, free coffee, TV in the reception area) go a long way in making customers feel welcome. "At the check-cashing place, they're talking to someone behind bulletproof glass," Ogbazion continues. "The welfare building—you can imagine what that's like. Here, we treat them well, and they want to come back."



Read more secrets of the tax preparation business at Mother Jones by clicking here.

The American Tax Relief Act

Here is a link to a summary and complete text of the American Tax Relief Act passed on January 1, 2013.


Click here to read a summary  or complete text of the American Tax Relief Act.

IRS Announces Later Date For 2013 Tax Season Opening Date

Our earlier post was a little optimistic.  The IRS announced a later date for accepting electronic filing returns. The new date for acceptance of returns has been pushed back to January 30, 2013.

 We encourage you to still file early.  Since returns are processed on a first come first served basis we encourage you to bring your information in before January 30, 2013 in order to be the first in line to receive your refund.


You can read the full text of the IRS announcement by clicking here.
 

Fiscal Cliff May Delay Your Refund

The IRS had previously announced that it would not begin to officially process any tax returns until January 22, which is approximately one week later than has historically been the case. This late start, even if the IRS holds to the January 22 date despite the late-breaking tax changes, could mean delays of federal refunds anywhere from 10-21 days, when compared to prior years. In some cases, the delays for paper tax return filings may exceed those for electronically-filed returns.

Translation you will not receive your refund until February.  The longest wait in the history of modern efiling.
The delay is due in part to the late congressional approval of the American Taxpayer Relief Act of 2012. Many of the changes to tax law affect the forms to be used for 2012 tax returns, and the IRS will need to work at an unprecedented pace in order to get the needed tax forms released to the various tax preparation firms and software companies, as well as to taxpayers.

In addition, approximately 30 states are affected because their tax forms and instructions could not be finalized until the federal issues were resolved. Some states may not release their tax forms until the end of January (including California, Delaware, Mississippi and Vermont), while many other states are expected to release their forms no sooner than the second or third week of January (including Illinois, Maryland, Michigan, Ohio and Virginia).


Click here to read more at Accounting Today.

Congress Passes "Fiscal Cliff" Bill

By now, of course, you've heard that Congress has passed legislation avoiding the tax increases of the "Fiscal Cliff."  Few of us who watched the process would consider it Washington's finest hour.  But we finally have answers to the questions that have made proactive planning so difficult.  Here are the highlights:

•  The Bush tax cuts are restored for income up to $400,000 ($450,000 for joint filers).  Rates for income above those ceilings rise to 39.6% for ordinary income and 20% for qualified corporate dividends and long-term capital gains.

•  The Alternative Minimum Tax is finally indexed for inflation, meaning Washington won't need to "patch" it every year.

•  The estate tax "unified credit" amount that you can bequeath tax-free remains at $5 million, indexed for inflation.  The actual rate rises from 35% to 40%.

•  The 2% payroll tax holiday has expired, most likely for good.

The legislation also extends several popular tax breaks, like higher limits for business equipment expensing, deductions for student loan interest, and tax-free charitable gifts made directly from Individual Retirement Accounts.

We realize you've already heard this news.  But we want you to know we'll be studying the new law in the coming weeks and months to look for every opportunity to help you save.  And of course, if you have any questions, don't hesitate to call us at 217-241-4597.