8 Facts To Determine Your Filing Status
January 8, 2010 | 
Subscribe to our RSS Feed
It is important that you choose your correct filing status as it determines your standard deduction, the amount of tax you own, and any refund owed to you.
- Your marital status on the last day of the year determines your marital status for the entire year.
- If more than one filing status applies to you, choose the one that gives you the lowest tax obligation.
- Single filing status generally applies to anyone who is unmarried, divorced or legally separated according to state law.
- A married couple may file a joint return together. The couple’s filing status would be Married Filing Jointly.
- If a spouse died during the year and you did not remarry during 2009, you may still file a joint return with that spouse for the year of death, provided the joint return election is not revoked by a personal representative for the deceased spouse.
- A married couple may elect to file their returns separately. Each person’s filing status would generally be Married Filing Separately.
- Head of Household generally applies to taxpayers who are unmarried. You must also have paid more than half the cost of maintaining a home for you and a qualifying person to qualify for this filing status.
- You may be able to choose Qualifying Widow(er) with Dependent Child as your filing status if your spouse died during 2007 or 2008, you have a dependent child and you meet certain other conditions.
Submitted by Sam Cohen
Questions:
Businesses- Closing out 2009 and Planning for 2010
January 6, 2010 | Subscribe to our RSS Feed
A new year provides an excellent opportunity to take a close look at your business and determine whether you need to make changes. To start 2010 on the right foot the following tips may be useful:
- Close out 2009 properly. Final payroll filings for 2009 are due by February 1, 2010.
- Watch for notification of your new unemployment insurance rate for 2010. It could have as much as tripled, so make sure you pass the new rate on to your payroll service provider and take this increase into account when planning your cash flow and expense pojections.
- Be sure you are classifying your employees correcty. The state is cracking down on employers inappropriately paying associates as contractors.
- Consider your entity classification. There may be tax benefits for converting from a C to an S Corporation. Similarly, a sole proprietor should consider the tax and legal benefits of converting to an S Corporation or an LLC. These elections should be made early in the year.
A more detailed version of this article by Tammy Schneider appears in the Jan/Feb 2010 issue of the “Maryland Messanger,” a publication by the Independent Insurance Agents of Maryland. Please visit their website at www.iiamd.org.
Submitted by Tammy Schneider
Questions?
tammy.schneider@glassjacobson.com
The Disabled Access Tax Credit
December 22, 2009 | Subscribe to our RSS Feed
The Disabled Access Tax Credit may be available to a medical practice that purchases adjustable height medical table(s) for the intended purpose of complying with the Americans with Disabilities Act of 1990 (“ADA”).
An eligible medical practice must meet at least one of the following qualifications:
- Annual gross receipts of the practice did not exceed $1,000,000 during the preceding year;
-OR-
- The practice had no more than 30 full-time employees during the preceding year.
The eligibility for this credit also depends upon particular circumstances surrounding the purchase and whether it truly was for the purpose of complying with the ADA.
Submitted by Cheryl McCann
Questions:
cheryl.mccann@glassjacobson.com
Maryland Governor Outlines Proposal To Lessen Rise in Unemployment Tax Rates
December 18, 2009 | Subscribe to our RSS Feed
On Dec. 17th, Gov. Martin O’Malley outlined a plan to reduce the steep increases in 2010 unemployment tax rates. O’Malley’s plan, which he intends to introduce as emergency legislation, would not eliminate the unemployment tax increases, but would reduce them somewhat.
Currently, the minimum annual tax paid by employers is $51 per employee and the maximum is $775.
Without action, the minimum will increase to $187 per employee and the maximum will reach $1,147.50.
If O’Malley’s plan is adopted, the minimum will rise to $153 per employee, with a maximum of $1,096.50.
The Maryland General Assembly’s 2010 session convenes Jan. 13 and ends April 12. If filed as emergency legislation, O’Malley’s bill would require a three-fifths majority in each chamber and would take effect immediately upon signing.
For more information on the MD Legislature’s plan, visit: http://baltimore.bizjournals.com/baltimore/stories/2009/12/21/story2.html?b=1261371600^2609481
Ten Ways a Small Business Can Prevent Fraud
December 17, 2009 | Subscribe to our RSS Feed
- Active Oversite. The owner should receive an unopened bank statement so he or she can review it for suspicious transactions. Moreover, the principals need to ensure they understand the entity’s revenue and expense streams so they will be able to notice unusual trends.
- Set a good example. The most effective thing you can do to prevent fraud in your business is to create a working culture that values honesty and integrity. If you take a lax approach to company policies and procedures, your staff will be more likely to “bend the rules”, creating an open door for fraud. But if you model an attitude of compliance to your own policies and procedures, your employees will notice and you will be well on your way to eliminating fraud before it begins.
- Restrict bank account access and perform regular bank reconciliations.
- Use dual controls. Never have one person writing, receiving and reconciling your business accounts. If you don’t have the staff to add a second person, consider using an automated banking service to add dual control.
- Eliminate paper checks. The more checks there are circulating for your company, the greater the chance they may be intercepted, duplicated or manipulated by a fraudster.
- Give employees a way to report fraud. Employees should also be provided with a way to anonymously report incidents of fraud within the company. Many employees are hesitant to report incidents of fraud because they are afraid of either losing their jobs or being alienated by their peers. Anonymous reporting not only alerts you to potential problems, but also limits the ability of fraudsters to intimidate their coworkers into silence.
- Mandatory Vacations. An employee who never takes a day off work is a red flag for fraud. Fraudulent employees fear that whoever does their job in their absence will notice that something isn’t quite right and their activities will be revealed. Safeguard your company by implementing a policy that requires all employees to annually take at least one week of vacation – in consecutive days.
- Adequately prescreen employee applicants. Fraud-proofing begins by hiring employers who are competent and trustworthy. You might be surprised how much you can learn a lot about the character of potential employees before you hire them. Run pre-employment background checks to screen the applicant’s criminal history,
- Have a written code of ethics.
- Treat employees well and have reasonable expectations.
Submitted by Jake Flowers, CPA and Jennifer Verch, CPA, CFE
Questions:
jake.flowers@glassjacobson.com