Tax Planning

Planning is the key to successfully and legally reducing your tax liability. We go beyond tax compliance and proactively recommend tax saving strategies to maximize your after-tax income.
We make it a priority to enhance our mastery of the current tax law, complex tax code, and new tax regulations by attending frequent tax seminars.
Businesses and individuals pay the lowest amount of taxes allowable by law because we continually look for ways to minimize your taxes throughout the year, not just at the end of the year.

Some key highlights for the 2011 tax year include:

• For tax year 2011 and 2012 the tax rates will remain at 10%-35%

• Personal exemption amount is $3,700 • Itemized deductions will not be reduced for higher income taxpayers

• 0% capital gains and qualified dividend income for individuals in the 10% and 15% tax bracket

• $250 teacher supply deduction is extended for 2011 and 2012

• Deduction for sales tax in lieu of state and local income tax

• Deduction for mortgage insurance premiums

• Child tax credit will be $1,000 for 2011 and 2012

• Dependent care credit is $3,000 for one child and $6,000 for more than one child for 2011 and 2012

• The residential energy efficient home credit is extended indefinitely. However, the maximum credit allowed per home after 12/31/10 is a 10% credit and is limited to $500 overall and individually at $200 for windows

• Student loan interest deductions are allowed for the total repayment term through the end of 2012

• Tuition and fees deduction is available through 2011

• Conversion of traditional IRA to Roth. If you completed a Roth conversion last year, and deferred to pay the tax, half of the tax will be included in your income this year

• If you are age 70 ½ or older, you can have (up to $100,000 of) charitable contributions made directly to a charity by your IRA custodian. • Annual gift tax exclusion remains at $13,000 per person

Depreciation highlights

• Section 179 of up to $500,000 on new or used equipment purchases

• Qualified leasehold improvements, qualified restaurant property,and qualified retail property is eligible for up to $250,000 of section 179

• Business owners can claim 100% of the cost for new property purchased

and placed in service in 2011

The following are 2011 contribution limits:

• 401(k) and 403(b) is $16,500 , with a catch-up provision of $5,500 for those age 50 and older

• Simple 401(k) and Simple IRA is $11,500 , with a catch-up provision of $2,500 for those age 50 and older

• Traditional and Roth IRA is $5,000, with a catch-up provision of $1,000 for those age 50 and older

• Coverdell Education Savings Account is $2,000 per beneficiary

• Health Savings Account is $3,050 for self-coverage and $6,150 for family coverage, with a catch-up provision of $1,000 for those age 55 and older

• Self-employed individuals can contribute 20% of their self-employment income up to $49,000.

The following are mileage rates for 2011

• Business mileage is (Jan 1-June 30) 51 cents and (July 1-Dec 31) 55.5 cents

• Moving/medical mileage is (Jan 1-June 30) 19 cents and (July 1-Dec 31) 23.5 cents

• Charitable mileage is 14 cents

When Congress dealt with the Bush tax cuts at the end of 2010, the effect was to delay a decision for two years. These laws are now set to expire on December 31, 2012. If Congress does not act, most of these benefits will disappear, and taxes will automatically increase to pre-2001 levels on January 1, 2013.