October 2010 Newsletter
Surviving The Tax Season- Article #1
Let The Games Begin
By Cheryl Leitschuh, Ed.D., RCC
You can feel it in the air! Is it the holiday season? Is it the New Year’s Celebration? NO, it’s the tax season!
Like runners waiting at the starting line, you can feel the anticipation of waiting for the guns to sound. Will the race be tougher this time? Will you and your team be ready? Is your spirit up to the task? Will anyone be on the sidelines to cheer you on?
This series of articles is designed to help you not just survive the tax season but THRIVE the tax marathon ahead of you. No matter how much technology you have, without YOU the key outputs do not happen. You ARE the tool that causes the success or failure of the race!
If you had a tool that was the foundation of success, what would you do? Would you neglect and abuse the tool? Would you let it overheat and lock up? OR would you do everything you could to enhance its performance?
Let’s assume you would chose to enhance performance. Following are three key tips to having this occur.
Performance Enhancement #1: EAT RIGHT!
Garbage in – garbage out. Believe it or not, your body does not have natural chemical receptors for chocolate, Coca-Cola and donuts. It seems that CPA professionals under pressure to win the race tend to fuel their body with things counter to improved performance.
Tip from the Coach: Use strategic snacking throughout the day to keep your performance energy flowing. Keep a stock of the following in your desk or encourage your firm to keep these supplies in your office/kitchen:
Low-fat cheese, fresh fruit, pretzels, peanut butter, bagels, nuts, sunflower seeds, crackers with cheese spreads and dips.
Performance Enhancement #2: EAT OFTEN!
If you are driving down the road and your fuel light goes on, how long do you wait until you run out of gas? Unfortunately, if you wait until your body tells you it is out of gas, you are hours past empty. Be proactive in refueling your body, which will increase your stamina, energy and concentration.
Tip from the Coach: Set regular intervals to refuel. Every two to three hours would be ideal. Set the alarm on your computer or palm pilot as a reminder. Take five minutes to refuel with both food and water. And as a bonus…don’t be surprised if you follow this refueling guide and actually lose weight in the process.
Performance Enhancement #3: MOVE
A great way to enhance your energy and concentration is to move. Changing positions gets the blood flowing. A one to two minute break every hour should do the trick.
Tip from the Coach: Keep your food energy snacks in a spot where you have to walk to get them. Better yet, walk to the food, walk to the water cooler and back to your desk. You already have your alarm set for enhancement #2 so combine tip #2 with tip #3 for effective time management.
Upcoming articles:
“Keeping The Pace” - Powerful Time Management
“Have The Endorphins Kicked In Yet”
“Reaching the Finish Line” – Tax Season After Care
For additional resources or to contact Cheryl Leitschuh, visit www.FromStaffToPartner.com
Upcoming Events
Webinar - Get the Latest IRS and SSA Employment Tax Updates – Various Dates
The Internal Revenue Service and the Social Security Administration invite payroll and tax professionals to attend a FREE Webinar on the latest employment tax filing information. The U.S. Small Business Administration will host the webinar.
Representatives from SSA and IRS will present information on the following topics:
- Electronic filing of W-2s
- Verifying employee SSNs online
- Verifying SSNs/EINs for information return (1099) filing
- IRS employment tax updates, including the HIRE Act, Affordable Care Act and Return Preparer Initiative
- Navigating the IRS and SSA web sites to find information payroll professionals need
Choice of Dates and Times (all times are Pacific Time)
Wednesday, November 17 – 1:00pm–3:00pm
To register, click here: https://cc.readytalk.com/r/a254wsla9klp
Wednesday, December 8 – 10:00am–12:00pm
To register, click here: https://cc.readytalk.com/r/iz83y92kbxs3
Enrolled Agents are entitled to 2 CPE Credits; other payroll and tax professionals may qualify depending on the requirements of their organizations.
Webinar - Indoor Tanning Excise Tax - October 6, 2010
Learn:
• New Excise tax regulations for indoor tanning services
• Who is liable for the Excise tax?
• Collecting and remitting the indoor tanning tax
• Determining taxability of tanning service purchased in a bundled package
• Tax forms and due dates for filing your return
Register on-line at: http://www.visualwebcaster.com/IRS/72128/reg.asp?id=72128
IRS Updates and News Releases
IRS Issues Guidance Explaining 2011 Changes to Flexible Spending Arrangements
The Internal Revenue Service issued guidance reflecting statutory changes regarding the use of certain tax-favored arrangements, such as flexible spending arrangements (FSAs), to pay for over-the-counter medicines and drugs.
The Affordable Care Act, enacted in March, established a new uniform standard that, effective Jan. 1, 2011, applies to FSAs and health reimbursement arrangements (HRAs). Under the new standard, the cost of an over-the-counter medicine or drug cannot be reimbursed from the account unless a prescription is obtained. The change does not affect insulin, even if purchased without a prescription, or other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles. The new standard applies only to purchases made on or after Jan. 1, 2011, so claims for medicines or drugs purchased without a prescription in 2010 can still be reimbursed in 2011, if allowed by the employer’s plan.
A similar rule goes into effect on Jan. 1, 2011 for Health Savings Accounts (HSAs), and Archer Medical Savings Accounts (Archer MSAs). Employers and employees should take these changes into account as they make health benefit decisions for 2011. For details on current rules, see Publication 969 , Health Savings Accounts and Other Tax-Favored Health Plans.
IRS Releases Form to Help Small Businesses Claim New Health Care Tax Credit
The Internal Revenue Service released a draft version of the form that small businesses and tax-exempt organizations will use to calculate the small business health care tax credit when they file income tax returns next year. The IRS also announced how eligible tax-exempt organizations –– which do not generally file income tax returns –– will claim the credit during the 2011 filing season. The IRS has posted a draft of Form 8941 on IRS.gov. Both small businesses and tax-exempt organizations will use the form to calculate the credit. A small business will then include the amount of the credit as part of the general business credit on its income tax return.
Tax-exempt organizations will instead claim the small business health care tax credit on a revised Form 990-T. The Form 990-T is currently used by tax-exempt organizations to report and pay the tax on unrelated business income. Form 990-T will be revised for the 2011 filing season to enable eligible tax-exempt organizations –– even those that owe no tax on unrelated business income –– also to claim the small business health care tax credit.
The final version of Form 8941 and its instructions will be available later this year. More information about the credit, including a step-by-step guide and answers to frequently asked questions, is available on the Affordable Care Act page on the IRS website.
IRS YouTube Videos
Check out this IRS video on YouTube: Preparing for Disasters. Watch this and other videos on the IRS’s YouTube Channel.
New Video Explains IRS Audit Process
A new video “Your Guide to an IRS Audit” follows three hypothetical small business taxpayers step-by-step through the audit process. The 10-lesson series looks at correspondence, office and field examinations.
List of Charities in Danger of Losing Tax Exempt Status – October 15, 2010 Deadline
It's easy to find out whether your organization or an organization that serves those in need in your community is one of the 300,000 charities at risk of losing its tax exemption because it hasn't filed a return for 3 years. Simply go to www.irs.gov/thelist and check the list for those at risk! Many small organizations can take advantage of the IRS one-time filing relief program and avoid losing their tax-exempt status. Go to IRS.gov for more information before it's too late.
Don't Forget the Sept. 30 Deadline for Eligible Homebuyer Credit Purchases
Eligible taxpayers who contracted to buy a home, qualifying for the first-time homebuyer credit, before the end of April have until Sept. 30, 2010, to close the deal. See IRS news release IR-2010-80 from July 2 for more.
Technical Guidance
Notice 2010-59 provides guidance on new section 106(f) of the Internal Revenue Code, added by section 9003 of the Affordable Care Act. That section sets forth a new standard, effective Jan. 1, 2011, for reimbursement of expenses for over-the-counter drugs from all workplace health plans, including flexible spending arrangements (FSA), health reimbursement arrangements (HRA), Health Savings Accounts (HSA) and Archer Medical Savings Accounts (Archer MSA). As a result of new section 106(f), the cost of over-the-counter medicines cannot be reimbursed from any of these tax-free arrangements unless the medicine is prescribed. This standard applies to purchases made on Jan. 1, 2011, or later -- even if the funds were set aside in 2010.
Revenue Ruling 2010-23 is also being released that obsoletes Rev. Rul. 2003-102, prior guidance on reimbursing expenses for over-the-counter drugs from employer health plans.
Notice 2010-61 provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code. It also provides guidance on the corporate bond monthly yield curve (and the corresponding spot segment rates), the 24-month average segment rates, and the funding transitional segment rates under § 430(h)(2). In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008, and the minimum present value segment rates under § 417(e)(3)(D) as in effect for plan years beginning after 2007.
REG-146893-02, REG-115037-00 withdraws proposed regulations published in the Federal Register on September 10, 2003 (68 FR 53448), related to the treatment of controlled services transactions under section 482 and the allocation of income from intangibles, in particular with respect to contributions by a controlled party to the value of an intangible that is owned by another controlled party. The IRS and Treasury Department are withdrawing those proposed regulations because they have been superseded.
Notice 2010-62 provides interim guidance regarding the codification of the economic substance doctrine under section 7701(o) and the related amendments to the penalties under sections 6662, 6662A, 6664, and 6676 by section 1409 of the Health Care Education Reconciliation Act of 2010.
