Surroundings by Phuc Ly

Alpha B — Wed, 16 Feb 2011 04:15:34 +0000

[box type="shadow"]A big part of who you are is who is around you. As a child, and even up until now, I have surrounded myself around people who I have admired and those who I would like to be like. While my childhood friend would have report cards that showed nothing but O’s (outstanding), my report card would be filled with S’s (satisfactory) and a whole lot of N’s (needs improvement). In high school, my friends were in the National Honors Society, Advance Placement classes, and did well on their SATs. I, on the other hand, maintained a 2.75 GPA (I once got a 3.14 GPA and was pretty stoked about it). My point is that I was not smart enough to get the grades that my mom hoped for me to earn, but I was smart enough to surround myself with those smarter than me. If it were not for my friends in high school, I might not have taken the SATs or attended San Jose State University. In my junior year of high school, I would usually meet up with my friend, Tu, for lunch. One day, as we were walking to get lunch (or so I thought), he made a sudden turn away from the cafeteria. When I asked him where he was going, he replied reluctantly to sign-up for the SATs. So, thinking about my smart friend, I just followed him to the sign-up booth. I figured, since I was here already and I did not want to look like someone who slacks off, I would just sign up with him. Well, after that test, I scored just high enough to get into San Jose State University and ended up attending college. If it were not for Tu, I would most likely not have taken the SATs and maybe not even completing college. Again, my point is that usually students with C grade averages would surround themselves with other C grade average friends, and B with B, and A with A. But, I was the C with the A friends.

Even today, I surround myself around with people that are not like me. I have friends that are interested in the stock market, friends that are engineers, and friends that are big sports fanatics. From each one of my friends, I have learned something new. One of the basic rules in business is to be surrounded by those who are smarter than you. I am fortunate to say that I have been doing that all my life and plan to continue to do that. In my business, I cannot possibly know everything in the field of taxes. I have a group of other tax experts that I can regularly consult with if I have a situation that I am not too familiar with. I have a mentor who has been doing this business for over 25 years. I have friends who can explain the stock market to me, and other friends who can explain how to network my computers. All of these people are making me better in one way or another. It is ok to say, “I don’t know.” You just need to put your ego aside and admit it, then have the motivation to learn go learn about it from someone out there and then execute that knowledge. [/box]

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Top 5 tips for filing a clean tax return

Alpha B — Sat, 12 Feb 2011 21:04:36 +0000

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Tax Benefits for Parents

Alpha B — Fri, 04 Feb 2011 20:29:47 +0000

[box type="shadow"]Reflect on the following tax benefits that your child (dependent) may help you qualify for when filing your tax returns this year.

1. Child Tax Credit: For each child under the age of 17, take this credit on your tax return. There is also the Additional Child Tax Credit if you do not qualify for the full amount. Refer to IRS Publication 972, Child Tax Credit.

2. Child & Dependent Care Credit: For payments you made to someone who cares for each child under the age of 13 so that you can work or look for work, this is a credit you can claim. Refer to IRS Publication 503, Child and Dependent Care Expenses.

3. Earned Income Tax Credit: This reduces the amount of tax you owe and benefits those who work and have earned income from wages. Refer to IRS Publication 596, Earned Income Credit.

4. Adoption Credit: If you adopted a child last year, you may qualify for a tax credit for qualifying expenses paid to adopt that child. There is a separate form that requires adoption-related documents. Refer to IRS Form 8839, Qualified Adoption Expenses.

5. Children with Earned Income: If your child has income earned from working, they may be required to file a tax return. Refer to IRS Publication 501.

6. Children with Investment Income: Your child’s investment income may be taxed at the parent’s tax rate. Refer to IRS Publication 929, Tax Rules for Children and Dependents.

7. Higher Education Credits Education: This tax credit can help with the cost of education by reducing taxable income. Refer to IRS Publication 970, Tax Benefits for Education.

8. Student Loan Interest: For qualified student loans, you may deduct interest you paid as an adjustment to your income. You do not need to itemize your deduction. Refer to IRS Publication 970.

9. Self-Employed Health Insurance: Being self-employed and paying your health insurance may earn you a deduction on any premiums you paid for after March 29, 2010 and for any children under the age of 27 (even if they are not your dependent).

Source: IRS.gov[/box]

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Starting a New Business?

Alpha B — Wed, 02 Feb 2011 00:26:38 +0000

[box type="shadow"]Starting a business is a big step that involves making financial decisions and going through many legal activities. Some steps and tips to help you plan, prepare, and start your own business:

1. Determine which business entity you want to form:

a. Sole proprietorship – an individual who owns an unincorporated business by himself/herself.

b. Partnership – a relationship where two or more persons join together to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business.
c. Corporation – a relationship where prospective shareholders exchange money, property, or both, for the corporation’s capital stock. Profits are taxed to the corporation when earned and then taxed to the shareholders when distributed as dividends.

d. S corporation – a corporation, meeting certain criteria, that elects to be treated as an S corporation. Generally an S corporation is exempt from income tax; the shareholders report the S corporation’s income, deductions, loss and credits on their individual tax returns.

e. Limited Liability Corporation – an entity — statutorily authorized in certain states — that is characterized by limited liability for debts similar to that of a corporation, management by members or managers, and pass-through taxation similar to that of a partnership.

2. Register for an Employer Identification Number (EIN), also known as a Federal Tax Identification Number, and is used to identify a business entity.

3. Register your fictitious business name. This is needed to open a business checking account. To obtain a fictitious business name, go to your county’s website. Each county is different when it comes to paperwork and fees.

4. Move forward with licenses and permits. There will be local, state, and federal licenses and permits. Remember, a local and state tax includes workers’ compensation, unemployment and disability insurance. Each city has its own business licenses procedure. For retail seller’s permit, you will need this for those who buy wholesale.

5. Remember your business insurance and learn your employer’s responsibility to hire employees. Hiring employees requires IRS Form I-9 and IRS Form W-4.

6. There are many ways to pay yourself and your employees: traditional paycheck, direct deposit or debit card. Payroll processing is important to running your business. If you are not comfortable to withhold payroll taxes and deductions from paychecks, another alternative to having a reliable and accurate paycheck is the right payroll service.

7. Manage your books and accounting with bookkeeping services such as Alpha B Group Tax & Bookkeeping Services or hire an account manager who you trust and can get the job done. Managing your account is crucial to a successful.
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For Business Profit, Low Tax is Essential

Alpha B — Wed, 02 Feb 2011 00:06:29 +0000

[box type="shadow"]Corporate income tax is strange. For every dollar a company makes, they pay a certain tax percentage. For some, it is a big lost but for other companies, it is a big gain. Instead of focusing on the company themselves, some companies use the tax system to increase their profits. Some companies move their income overseas to pay fewer taxes than other competitors. Some companies have low effective tax rates while others face limited reductions on taxes. It takes an average of three years for companies to present their tax rates in annual reports.

Because the corporate taxes in the United States of America are among the highest in the world, it is also the highest among industrialized countries. According to Roberto Williams of the Tax Policy Center in Washington, “If you look at the effective tax rate — the actual tax rate that companies pay after all the adjustments they make — we’re much closer to the center of the pack.” Some companies do not face the full 35% corporate tax rate. Different tax write-offs and tax breaks range differently with each company.

During President Barack Obama’s State of the Union, he emphasized his idea of limit loopholes so that everyone can be treated fairly. Keeping watching our news feed for these updates.

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Listen/read to the entire article here: NPR.org

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President Obama Wants Changes to the Tax Code and Lower Corporate Tax Rates

Alpha B — Fri, 28 Jan 2011 18:28:25 +0000

[box type="shadow"]During President Obama’s State of the Union Address on January 25, he called for change in the Tax Code to make it simpler to the public, take out loopholes, and level the competitiveness; he also called for the savings generated from this action to lower the corporate tax rate.
“Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries,” President Obama said. “Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change.” Today, 39.2% is the combined federal and state corporate tax rate. According to the President’s Economic Recovery Advisory Board (PERAB), every percent reduction in the U.S. corporate tax rate would cost the U.S. $120 billion over ten years.
For the next several months, administration officials will be meeting with corporate executives and there will be a series of hearings on comprehensive tax reform. Ways to tackle the budget deficit according to President Obama is to cut “spending through tax breaks and loopholes.” In addition, “if we truly care about our deficit, we simply cannot afford a permanent extension of the tax cuts for the wealthiest 2 percent of Americans,” the President said. President Obama also addressed the controversial Form 1099 information reporting requirements; he stated that Democrats and Republicans are on common ground and that the start of correcting the flaw in this legislation to be less of a burden on small businesses.

Source: WhiteHouse.gov[/box]

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Looking for Past Tax Information from the IRS?

Alpha B — Wed, 26 Jan 2011 18:10:20 +0000

[box type="shadow"]If you are hunting for a certain prior year’s tax return information and can’t find it in your files, the IRS can help. You can request a free copy of your federal tax return information on the web at IRS.gov, by calling 800-908-9946, or by mail with a complete IRS Form 4506T-EZ. If you are a business, partnership, and/or individual who need transcript information from other forms, you must use the IRS Form 4506T – Request for Transcript of Tax Return. The fee for a transcript is not charged by the IRS; this is available for the current tax year as well as the past three tax years. This transcript shows most line items from your tax return as it was originally filed. This also includes any forms and schedules you may have filed with your tax return. If there was a change made after your initial filing tax return, it will not show. Basic data is known as the tax account transcript; it may show later adjustments either you or the IRS made after the tax return was filed. When ordering online or by phone, you should receive your tax return within 5 to 10 days and by 30 days if you are ordering by mail.
If you still need an actual copy of a prior tax return, it will cost $57 for each tax year. This can be done by completing IRS Form 4506 and by mail directly at the IRS address listed on the form of your respected area. These are generally available for the current year and up to the past six years. Allow up to 60 days.

All forms can be found on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

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Source: IRS.gov

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Social Security Tax Cut 2011

Alpha B — Wed, 26 Jan 2011 09:49:21 +0000

[box type="shadow"]The Social Security tax cut for 2011 is due to the 2010 Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act. This new tax cut will leave a 2% cut in payroll taxes for employees and reduces 2% of the employee contribution to Social Security tax. Please note from IRS Notice 1036:

1. Employer tax rate for Medicare and Social Security will remain 6.2% with a wage limit of $106,800

2. Employee tax rate for Medicare and Social Security will be 4.2%

3. Medicare will be 1.45% for employers and employees with no wage limit

4. Employers should update their systems to reflect these new changes by January 31, 2011

5. Employees should be reimbursed any tax overage made during the transition by March 31, 2011

6. Everyone should review their tax withholdings to make any necessary adjustments

Source: IRS.gov[/box]

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Review of Burdensome Government Regulations Proposed by President Obama

Alpha B — Wed, 26 Jan 2011 09:28:58 +0000

[box type="shadow"]On January 18, 2011, President Barack Obama signed an executive order for a review of regulations and asked federal agencies to take less heavy approaches to rules to support economic growth and create jobs while protecting the public interest. On the Wall Street Journal, Obama says, “rules have gotten out of balance, placing unreasonable burdens on business—burdens that have stifled innovation and have had a chilling effect on growth and jobs.” This review would help bring order to regulations that have become a cover of overlapping rules as a result of lawmakers who have influences of special interests groups. “But we are also making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb.” Many businesses have recognized and commended the president’s intentions but there are still much to see in the future.

Source: WallStreetJournal.com[/box]

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Your Tax Refund in a Debit Card

Alpha B — Mon, 24 Jan 2011 19:09:39 +0000

[box type="shadow"]The U.S. Treasury Department has come up with a cost effective way for people with tax refund checks but no bank accounts. According to NPR.org, nine million U.S. households, 1 out of every 13 households, do not have a bank account. Without waiting for weeks for the tax refund check in the mail and paying a fee to cash the checks, the U.S. Treasury Department will offer 600,000 Americans a non-bank debit card that can receive direct deposits. Some people will have to pay $4.95 a month for the card and it is something that could save money down the line.

Source: NPR.org[/box]

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