HERE IS A UNIQUE IDEA

This is not to all inspiring but let me ask you "when is the last time you truly thanked your customers?"  Not that "thank you" that you get from most workers at a cash register who, like a robot say "thank you", I mean a real from the heart show of appreciation. 

I thought of this recently when I was doing some shopping and after hearing but not feeling a few "thank's" at different stores, I was at a Nordstrom and the clerk really thanked me.  I have to tell you it really felt good... And here I am telling you about Nordstrom- nice plug for them.

Give it a try, a heartfelt thank you to your clients...and by the way, Thank you for following my blog!!!  It means a lot to me.

UPCOMING FREE SALON & SPA COOL TOOLS WEBINAR

I wanted to let you know about our upcoming FREE webinar on March 26^th.

Here is how this webinar was born.   Recently I was meeting with clients using GoToMeeting.  My one o’clock call had a specific question and my response to that was “Hey, I have a cool tool on that!” I then pulled up an Excel worksheet and showed them how they could utilize that tool to help solve that problem. A little later in the day I was talking with another client and they had a different problem and I said “Hey, I have a cool tool on that!” Then I pulled up a different Excel worksheet and showed them how they could use that tool to solve their problem.

This got me thinking. We have a lot of cool solutions that we have developed over the years and we pull them out to help clients solve problems. Just maybe we should have a webinar to show these tools and if you’re interested we would provide them to you at no additional cost.

This is an exclusive webinar for Kopsa Otte clients only so if you are a client of ours and interested in these cool tools, let contact Amanda. If you’re not a client and would like to be, please contact Amanda at ahaumont@kopsaotte.com

1 IN 5 AMERICANS ARE DEPENDENT ON THE GOVERNMENT

The Heritage Foundation just reported that 21.8% of Americans or 67.3 million are subsidized by the government. 

PAYROLL TAX CUT EXTENDED TO THE END OF THE YEAR

The Internal Revenue Service today released revised Form 941 enabling employers to properly report the newly-extended payroll tax cut benefiting nearly 160 million workers.

Under the Middle Class Tax Relief and Job Creation Act of 2012, enacted yesterday, workers will continue to receive larger paychecks for the rest of this year based on a lower social security tax withholding rate of 4.2 percent, which is two percentage points less than the 6.2 percent rate in effect prior to 2011. This reduced rate, originally in effect for all of 2011, was extended through the end of February by the Temporary Payroll Tax Cut Continuation Act of 2011, enacted Dec. 23.

No action is required by workers to continue receiving the payroll tax cut. As before, the lower rate will have no effect on workers’ future Social Security benefits. The reduction in revenues to the Social Security Trust Fund will be made up by transfers from the General Fund.

Self-employed individuals will also benefit from a comparable rate reduction in the social security portion of the self-employment tax from 12.4 percent to 10.4 percent. For 2012, the social security tax applies to the first $110,100 of wages and net self-employment income received by an individual.

The new law also repeals the two-percent recapture tax included in the December legislation that effectively capped at $18,350 the amount of wages eligible for the payroll tax cut. As a result, the now repealed recapture tax does not apply.

The IRS will issue additional guidance, as needed, to implement the newly-extended payroll tax cut, and any further updates will be posted on IRS.gov.

1099 QUESTION

Q: I have a question on 1099 forms. There are a couple people looking for their 1099’s and the salon that we work at has never prepared them in the past. Do they need to?

A:Here are the 1099 rules:

·         First of all, all businesses are required to file 1099’s to a person or a business (that is not incorporated) for any services that are provided of $600 or greater during the calendar year. 

·         Also, the same would be true for a business paying rent to a person or a business that was not incorporated.   

Starting this year the IRS has added additional questions to all tax returns. 

They are:

1.    Are you required to file form(s) 1099’s?                    yes or no

2.    If yes, are you or will you be filing form(s) 1099’s?    yes or no

These are questions that we will need to answer every year on all returns. 

I must warn you, if you should be chosen for audit they will be looking to make sure that you filed your 1099’s.  The fine for not filing is really high.  They can fine the business $250 per 1099 that was not filed.  So for example, if a business was required to prepare 10 1099’s and did not and the auditor goes back 3 years (and the same number of 1099’s were required then),  they could actually access $2500 (10 x $250)  x 3 years or $7500 in penalties just for not filing 1099’s.

Also, it is recommended that anybody you pay as a contractor or anybody for any type of service, you are required to have the contractor / person fill out a Form W-9 and sign.  This is basically paperwork that says you do not have to withhold backup withholding.  It would be a good practice to obtain these forms and keep in your permanent records.  You do not have to file them with the IRS. 

The following is a link to the IRS website, where you can download and print the form W-9.        

If you have any questions, please feel free to contact us. 

CALCULATING MILEAGE RATES

Q:  Somebody told me that the mileage rate for 2011 was 51 cents per mile and then my college son who took a tax class last semester said it was 55 cents.  Who is right?  Am I getting my monies worth for all the tuition I am paying?

A:  I don’t know what grade your son received in the tax class.  I teach an income tax at our local college one semester a year.  I teach so I can say that I am a “professor emeritus,” whatever that means.  Anyway, if he would have taken my class I would be disappointed because he is wrong.

Here is the deal.  If you used an auto for business travel last year and claim the standard mileage deduction, be sure to pay attention to when you took the trips. High gasoline prices in 2011 prompted the IRS to increase the deduction rate at midyear.

The mileage rate for business use of a vehicle was 51 cents per mile from Jan. 1, 2011, through June 30, 2011. On July 1, 2011, the rate increased to 55.5 cents a mile.

This type of tax deduction change is why good tax record keeping is so important.

IRS RELEASES THE DIRTY DOZEN TAX SCAMS FOR 2012

Please check out the latest tax scams issued by the IRS: READ MORE