Victoria Majors Jones, CPA - Blog

I will answer any tax related questions readers have (so long as I think the answer will be of benefit to others).  Just post your question in the comments section below and I will answer that question on this blog as soon as I can. (Most questions will be answered within 24 hours.) 

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The Senate just passed H.R. 4, which will repeal the expanded Form 1099 information reporting requirements for:

• Business payments of $600 or more made to a corporation;
• Amounts paid in consideration for property and other gross proceeds for both property and services; and
• Payments of $600 or more made to a service provider by recipients of income from rental real estate.

The President is expected to sign the bill. This is very good news for small businesses, as these requirements would be an extreme record keeping burden. 

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When it comes to taxes, reaching age 70-1/2 is an important milestone. That's because you have to start taking minimum annual distributions from your traditional IRAs when you reach age 70-1/2.  If you don't take these minimum distributions when you're supposed to, you could get hit with a 50% penalty tax!

When must these minimum distributions begin? If you reached age 70-1/2 in 2011, you have until April 1, 2012 to take your first year's distribution. However, if you wait until 2012 to take this distribution, you may end up being in a higher tax bracket in 2012. That's because you'll also have to take your second year's annual minimum distribution in 2012, since the extended deadline until April 1 is available only in the first distribution year.

The decision whether or not to accelerate minimum distribution payouts is not an easy one.  Contact our office if you would like any help setting up the right IRA and retirement plan payout strategy for you and your family.

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The Franchise Tax Board (FTB) has announced that California's ReadyReturn program, which provides free completed tax returns, is now available for taxpayers to access. ReadyReturn reduces the tax-filing burden for those with simple tax returns by using existing wage records to complete their returns.

Taxpayers can check to see if they qualify by visiting the FTB's website at ftb.ca.gov, clicking on ReadyReturn, and providing a name and Social Security number.  Taxpayers can accept the tax return as presented, change any information on the return, or disregard it for another filing method. To qualify, taxpayers must have in 2010: earned wages from only one employer; filed either as single or head of household; taken the standard deduction, and claimed no more than five dependents. Taxpayers who are renters and who can be claimed as a dependent are also eligible. Taxpayers who married, entered into a registered domestic partnership (RDP), had a child, received added income, or qualify for a tax credit, can update their ReadyReturn online. For those who do not qualify for ReadyReturn, the FTB offers CalFile; a free e-file program for more complicated tax filings, that takes about 15 to 30 minutes to complete. For taxpayers who may be interested but are unfamiliar with the programs, the FTB has on its website, two short videos demonstrating how the programs work.

Here is the link to the FTB's ReadyReturn webpage.

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In a recent "Early Show" segment, CBS News asked a Miami couple to file their taxes in three different ways -- online via TurboTax, with H&R Block, and with a CPA (in this case, Monte Kane of Kane and Company in Miami).

What were the results?

TurboTax: The couple spent $74.95 for the software and prepared their own taxes with a refund of $3,103.

H&R Block: After spending $200 for H&R Block's services, H&R Block determined that they would receive a refund of $2,763.

CPA: For a fee of $350, the couple would receive a refund of $4,063.

Click here to see the video.

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