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Equipment Purchases Should be Made Soon

 

Businesses constantly need to purchase equipment for their business to expand or replace aging equipment. Usually, they want to write the expense off as quickly as possible for their taxes to see immediate tax savings. With the initial tax cuts in 2003 and the extensions and additional cuts made throughout the past four years to combat the recession, there have been two options for many taxpayers to completely write off their equipment purchases immediately.

Section 179 depreciation, which allows a taxpayer to expense new and used equipment purchases in the year of acquisition, has been around since 2003. It has allowed immediate expensing of a minimum of $100,000 since 2003 and up to a maximum of $500,000 with the 2012 amount being $139,000.

In addition, there has been bonus depreciation since 2008, which has allowed the taxpayer to write off 50% in 2008 and 2009 or 100% in 2011 and 2012 of new long-production capital purchases. With these rules being around for so long, there has been no sense of urgency to purchase new equipment.

However, this honeymoon is about to end. Beginning in 2013, barring some radical unanticipated agreement in Congress, bonus depreciation ends and Section 179 depreciation decreases to only $25,000. This will make the write off period for the capital asset purchases anywhere from 3 to 39 years. So go shopping, stimulate the economy and purchase equipment for your business before December 31st! This will not only help the economy, but also your cash position as you will see immediate benefits on your 2012 taxes!

 

Have you heard? There’s an election coming up. It’s not easy to miss with the constant barrage of TV, radio, and mail advertisements.

With the General Election a little less than three weeks away, early voting is almost here. Saturday, October 20, 2012, is the first day to vote early in Washoe County and you will then have until November 2, 2012, to cast an early ballot. So, my question to you is, are you going to get out and vote early?

Early voting is an easy and painless process; at least it has been in my experience. With 22 locations in Reno, Sparks, and Incline where you can cast your ballot early, there really isn’t much of an excuse as to why you can’t make it out to vote. You don’t even have to go to your assigned polling location when casting your ballot early. I can hear some of you saying, “I don’t like any of the candidates,” and that’s ok. Nevadans can still cast a vote for “none of the above,” a voting option unique to Nevada, so exercise your voice even when dissatisfied.

If you really aren’t into voting in person, you can also cast an absentee ballot. All you have to do is fill out an absentee ballot request form and have it into the Registrar of Voters by 5 PM the Tuesday before the election, October 30, 2012, in order to receive an absentee ballot. Once you receive your absentee ballot, fill it out and make sure that it reaches the Registrar’s office by 7 PM on Election Day (November 6, 2012). Nice and easy and no waiting in line, either. I still think early voting is just as easy or even easier, but there are options out there. So, no excuses!

If neither of these early or alternative options sounds like your thing, please just remember to vote on November 6, 2012. If you vote on Election Day you will have to vote at your assigned polling location which you can find on the sample ballot you receive. If you don’t receive a sample ballot or misplace yours, you can look up your voter registration online through the Secretary of State, find your precinct, and then locate your polling location on the Washoe County Registrar’s web page.

With a record number of voters registered in Washoe County (241,400 as of October 17 according to the Registrar), we can only hope this increase in registration means an increase in voter turnout. The two don’t necessarily correlate, so that is why I am encouraging you to get out and vote. To recap:

Early voting happens October 20, 2012, through November 2, 2012.

• Requests for absentee ballots are due October 30, 2012, by 5 PM.

• The General Election is November 6, 2012. You must vote at your assigned location.

Once again, you have many options and plenty of time to cast a ballot this election, so please, go vote!

 

 

 

For tax years beginning after 2013, U.S. Citizens and legal residents, with few exceptions, will be required to maintain health insurance coverage.

A number of programs such as Medicare, Medicaid, eligible employer-sponsored plans, plans in the individual market, certain grandfathered group plans and other plans recognized by Health and Human Services (HHS), will be approved to provide this coverage.

The coverage requirement does not apply to:

Others may apply to HHS for an exemption due to hardship in obtaining coverage.

 In a recent report, the Congressional Budget Office (CBO) has estimated that, beginning in 2014, approximately 6 million people will pay a penalty tax for not carrying this coverage. The monthly penalty for failure to maintain this coverage will be equal to 1/12 of the greater of a flat dollar amount or a percentage of household income (reduced by the dollar threshold for filing) starting at 1.0% in 2014, rising to 2.5% by 2016 and adjusted for inflation thereafter.

The flat dollar rate is set at $95 for 2014, $325 for 2015, $695 for 2016 and adjusted for inflation thereafter.

Since this estimate is considerably higher than the original 2010 estimate, get set for more heated political debate over the Affordable Care Act.

 

 

With the year-end quickly approaching, it’s a good time to start planning your charitable donations. Donating not only allows you the opportunity to help others in need, it can also provide you with tax benefits.

The following are guidelines to help you maximize your tax benefits:

  1. Charitable contributions are only deductible if you itemize your deductions on Form 1040, Schedule A. Your itemized deductions must be greater than the standard deduction available to you depending on your filing status and other factors.
  2. For a donation to be deductible, it must be given to a qualified tax-exempt organization. Donations to individuals are never tax deductible. To determine if an organization is tax-exempt, you can ask the organization or go to www.irs.gov, and use the “Exempt Organizations Select Check” tool.    Donations must give the organization full control over the funds. If you specify an individual within the organization to receive the benefits, it is not considered a tax deductible donation, but a gift to the individual.
  3. When you donate and receive something in return, only the portion of the donation that is greater than the fair market value of the benefit you received is deductible. For example, if you donate $100 and receive a ticket to an event worth $25, you can only deduct $75.
  4. Non-cash or property donations are usually deductible in the amount of their fair market value; however, there are exceptions. All non-cash donations greater than $5,000 require a qualified appraisal.
  5. Volunteering does not result in a direct tax deduction, but some of the expenses you incur while volunteering are deductible. Examples include travel expenses and uniforms.
  6. One of the most important aspects of donating is to keep proper records to substantiate your contribution.

Donations of $250 or less require either a bank record, written receipt, or letter from the qualified organization.

Donations of $250 or more require a bank record or written receipt, AND an acknowledgement from the organization stating the amount of cash contributed, if any benefits were received, and a description of these benefits.

 





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Reno, NV 89501

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