Here is what the food industry gets to do to report tips. Not for the salons and spas. Maybe someday Congress will pass legislation to give us equal footing.
IRS Extends Food Industry Tip Reporting Program
WASHINGTON — The Internal Revenue Service today extended for an additional two years its program that simplifies the record keeping burden for reporting tip income in the food and beverage industry.
The Attributed Tip Income Program (ATIP) was first announced in 2006 in Revenue Procedure 2006-30. The program, which was originally set to expire Dec. 31, 2009, has been extended to Dec. 31, 2011, under Revenue Procedure 2009-53 issued today.
Employers who participate in ATIP report the tip income of employees based on a formula that uses a percentage of gross receipts, which are generally allocated among employees based on the practices of the restaurant.
Both employees and employers benefit from participation in the ATIP program. The IRS will not initiate a tip examination during the period the employer and employee participate in ATIP. Participating employees do not have to keep a daily tip log or other tip records.
Enrollment is simple. Employers elect participation in ATIP by checking the designated box on Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips. Employees who work for a participating employer can easily elect to participate in ATIP by signing an agreement with their employer to have their tip income computed under the program and reported as wages.
Wednesday, December 9, 2009
Tuesday, December 8, 2009
MORE ECONOMIC NEWS
Spending will be hurt by another dip in consumer debt
Consumer spending is expected to remain weak after the release Monday of a Federal Reserve report that showed consumer borrowing falling for a ninth straight month in October. Consumer credit was down at an annual rate of $3.5 billion in October. Economists had predicted a $9.3 billion decline. BusinessWeek/The Associated Press (12/7)
Next crisis to be in commercial real estate, experts say
A crisis looms for the commercial real estate market in 2010, then for the government-debt market, particularly in the U.S., investment managers said. "I think the next shoe to drop, which will be the world's biggest shoe, is the continued decline of the dollar and ultimately the breaking of the U.S. government market, which will set the other markets on another terrible path," said Steve Shenfeld, president of MidOcean Credit Partners. The danger of default on commercial real estate also is a major threat, Shenfeld said. Reuters (12/7)
Consumer spending is expected to remain weak after the release Monday of a Federal Reserve report that showed consumer borrowing falling for a ninth straight month in October. Consumer credit was down at an annual rate of $3.5 billion in October. Economists had predicted a $9.3 billion decline. BusinessWeek/The Associated Press (12/7)
Next crisis to be in commercial real estate, experts say
A crisis looms for the commercial real estate market in 2010, then for the government-debt market, particularly in the U.S., investment managers said. "I think the next shoe to drop, which will be the world's biggest shoe, is the continued decline of the dollar and ultimately the breaking of the U.S. government market, which will set the other markets on another terrible path," said Steve Shenfeld, president of MidOcean Credit Partners. The danger of default on commercial real estate also is a major threat, Shenfeld said. Reuters (12/7)
INFORMATION ON THE EXTENDED 1ST TIME HOMEBUYERS CREDIT
I just got the information below from the IRS. I have discussed this before, but thought you might be interested. Note that the IRS is going Hi Tec… there is a U Tube link below.
10 Important Facts about the Extended First-Time Homebuyer Credit
If you are in the market for a new home, you may still be able to claim the First-Time Homebuyer Credit. Congress recently passed The Worker, Homeownership and Business Assistance Act Of 2009, extending the First-Time Homebuyer Credit and expanding who qualifies.
Here are the top 10 things the IRS wants you to know about the expanded credit and the qualifications you must meet in order to qualify for it.
1. You must buy – or enter into a binding contract to buy a principal residence – on or before April 30, 2010.
2. If you enter into a binding contract by April 30, 2010 you must close on the home on or before June 30, 2010.
3. For qualifying purchases in 2010, you will have the option of claiming the credit on either your 2009 or 2010 return.
4. A long-time resident of the same home can now qualify for a reduced credit. You can qualify for the credit if you’ve lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the new home is purchased and the settlement date is after November 6, 2009.
5. The maximum credit for long-time residents is $6,500. However, married individuals filing separately are limited to $3,250.
6. People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after November 6, 2009. The full credit is available to taxpayers with modified adjusted gross incomes up to $125,000, or $225,000 for joint filers.
7. The IRS will issue a December 2009 revision of Form 5405 to claim this credit. The December 2009 form must be used for homes purchased after November 6, 2009 – whether the credit is claimed for 2008 or for 2009 – and for all home purchases that are claimed on 2009 returns.
8. No credit is available if the purchase price of the home exceeds $800,000.
9. The purchaser must be at least 18 years old on the date of purchase. For a married couple, only one spouse must meet this age requirement.
10. A dependent is not eligible to claim the credit.
For more information about the expanded First-Time Home Buyer Credit, visit IRS.gov/recovery.
Links:
· First-Time Homebuyer Credit
· IR-2009-108, First-Time Homebuyer Credit Extended to April 30, 2010; Some Current Homeowners Now Also Qualify
YouTube Videos:
· Recovery: New Homebuyer Credit - November 2009
10 Important Facts about the Extended First-Time Homebuyer Credit
If you are in the market for a new home, you may still be able to claim the First-Time Homebuyer Credit. Congress recently passed The Worker, Homeownership and Business Assistance Act Of 2009, extending the First-Time Homebuyer Credit and expanding who qualifies.
Here are the top 10 things the IRS wants you to know about the expanded credit and the qualifications you must meet in order to qualify for it.
1. You must buy – or enter into a binding contract to buy a principal residence – on or before April 30, 2010.
2. If you enter into a binding contract by April 30, 2010 you must close on the home on or before June 30, 2010.
3. For qualifying purchases in 2010, you will have the option of claiming the credit on either your 2009 or 2010 return.
4. A long-time resident of the same home can now qualify for a reduced credit. You can qualify for the credit if you’ve lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the new home is purchased and the settlement date is after November 6, 2009.
5. The maximum credit for long-time residents is $6,500. However, married individuals filing separately are limited to $3,250.
6. People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after November 6, 2009. The full credit is available to taxpayers with modified adjusted gross incomes up to $125,000, or $225,000 for joint filers.
7. The IRS will issue a December 2009 revision of Form 5405 to claim this credit. The December 2009 form must be used for homes purchased after November 6, 2009 – whether the credit is claimed for 2008 or for 2009 – and for all home purchases that are claimed on 2009 returns.
8. No credit is available if the purchase price of the home exceeds $800,000.
9. The purchaser must be at least 18 years old on the date of purchase. For a married couple, only one spouse must meet this age requirement.
10. A dependent is not eligible to claim the credit.
For more information about the expanded First-Time Home Buyer Credit, visit IRS.gov/recovery.
Links:
· First-Time Homebuyer Credit
· IR-2009-108, First-Time Homebuyer Credit Extended to April 30, 2010; Some Current Homeowners Now Also Qualify
YouTube Videos:
· Recovery: New Homebuyer Credit - November 2009
UPCOMING NUPTIALS
We are pleased to announce that one of our very own talented accountants will be changing her status to "Married - Filing Jointly."Megan Munsell, will be united in marriage this Saturday the 12th to Mark Blinde, a Network Technician at Cornerstone Bank Technology Center.
Megan, who graduated as valedictorian of her college class, has been an accountant with Kopsa Otte since January of 2008; and she is a true asset to our Team. Remember, Megan's email address will change after this weekend to: mblinde@kopsaotte.com.
Our best wishes go out to Mark and Megan for a lifetime of happiness!
AMERICAN EXPRESS SAYS PAY YOUR CREDIT CARD BILL ON TIME OR YOU WILL LOSE YOUR POINTS
In case you haven’t heard, starting in January, American Express says that any credit cards that are cobranded with Delta JetBlue, Hilton or Starwoods won't receive reward points if you are late paying your bills. In other words, pay your bill on time or forfeit the miles or points you thought you earned for making purchases on your card during that month. To get the rewards back, it's going to cost you. You'll be hit with a $29 reinstatement fee if you want the rewards back. That fee is on top of the late-payment fee — $19 or $38 depending on your balance. A penalty interest rate, currently 27 percent, would be assessed on future balances.
Monday, December 7, 2009
CLOSING THE DEFICIT
A couple weeks ago I posted the Tax Foundation's estimation of where tax rates will have to go to close the deficit. The foundation also calculated the average federal income tax payments that would be necessary to close the deficit. This exercise is even scarier. Right now the federal government takes in roughly $19,000 per household and spends $33,000. How much more would different taxpayers earning different incomes have to pay to close that gap?
These dollar amounts really put the gap into perspective. This reinforces what I've been saying all along...TAX PLANNING IS MORE IMPORTANT NOW THAN EVER. Larry Kopsa CPA
These dollar amounts really put the gap into perspective. This reinforces what I've been saying all along...TAX PLANNING IS MORE IMPORTANT NOW THAN EVER. Larry Kopsa CPA
DUBAI REJECTS ASSUMPTION IT IS RESPONSIBLE FOR DUBAI WORLD DEBT
Imagine this, a government rich with cash saying that creditors should be responsible for their actions and don’t depend on the government to bail them out. Maybe the guys in Washington should take note.
As creditors assumed that Dubai, United Arab Emirates, would guarantee the debt of Dubai World, the emirate rejected the idea. "Creditors need to take part of the responsibility for their decision to lend to the companies," said Abdulrahman al-Saleh, director general of the Department of Finance in Dubai. "They think Dubai World is part of the government, which is not correct." Dubai World said it is looking at a $26 billion debt restructuring, which would affect its property firms the most. Reuters (11/30) , The Wall Street Journal (11/30)
As creditors assumed that Dubai, United Arab Emirates, would guarantee the debt of Dubai World, the emirate rejected the idea. "Creditors need to take part of the responsibility for their decision to lend to the companies," said Abdulrahman al-Saleh, director general of the Department of Finance in Dubai. "They think Dubai World is part of the government, which is not correct." Dubai World said it is looking at a $26 billion debt restructuring, which would affect its property firms the most. Reuters (11/30) , The Wall Street Journal (11/30)
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