- January 17 – Due date for the fourth quarterly installment of 2011 estimated taxes for individuals unless you file your tax return and pay any taxes due by January 31.
- January 31 – Employers must furnish 2011 W-2 statements to employees. Payers must furnish payees with Form 1099s for various payments made. The deadline for providing Form 1099-B and consolidated statements to customers is February 15.
- January 31 – Employers must generally file annual federal unemployment tax returns.
- February 28 – Payers must file information returns, such as Form 1099s, with the IRS. This deadline is extended to April 2 for electronic filing.
- February 29 – Employers must send Form W-2 copies to the Social Security Administration. This deadline is extended to April 2 for electronic filing.
- March 1 – Farmers and fishermen who did not make 2011 estimated tax payments must file 2011 tax returns and pay taxes in full.
- April 17 – Individual income tax returns for 2011 are due.
It’s time to file various tax returns once again. If any of the following tax deadlines will apply to you, circle the dates on your 2012 calendar.
If you file a joint income tax return with your spouse, you are considered “jointly and severally” liable for the payment of all taxes owed. The IRS can come after either you or your spouse for the entire amount of tax due, plus any penalties and interest due.
The law has “innocent spouse” rules that may limit an individual’s responsibility for unpaid taxes resulting from filing a joint return. If the “innocent spouse” can establish that he or she did not know, or have reason to know, that there was an understatement of tax when signing the joint return, relief can be requested. Under previous rules, this relief had to be requested within two years after collection proceedings were initiated by the IRS.
In a new 2011 ruling, the IRS has decided to eliminate the two-year time limit for requesting innocent spouse status under the “equitable relief” provision in the law.
You’ve spent years developing your business, building its value, enhancing its reputation. Now you’re ready to move on. You place a “Business for Sale” advertisement in the Internet classifieds, and the next day an eager – overly eager – buyer approaches you with a deal that seems too good to be true. The buyer offers full price and wants to structure the deal as a stock sale. A stock sale means the buyer will get the entire business, including all its assets (cash, checking accounts, receivables, inventory and so on) at closing. The buyer doesn’t ask tough questions about the firm and seems in a hurry to close the sale. He or she offers a 10% down payment and says the full balance will be paid off within a year.
Seller beware! Business owners and regulators have found that scam artists use these types of transactions to strip value from companies, pulling out cash, and leaving the seller with a fistful of worthless stock. Within days of closing the sale, the buyer factors (sells) the receivables for cash, runs up company credit cards, sells off inventory, and empties cash accounts. The firm’s creditors don’t get paid. Your formerly prosperous business becomes an empty shell.
How can you avoid these types of scams when selling your business? Here are a few suggestions.
Perform an extensive background check on any potential buyer, including a review of the person’s credit reports, litigation history, tax liens, and so forth. A skilled attorney can often help with this research.
Beware of sales that go too smoothly. Legitimate buyers will perform due diligence, asking tough questions, inspecting financial records, and calling customers and vendors. If the buyer wants to close the sale in a hurry and doesn’t seem interested in the firm’s ongoing prospects, beware!
You may have already started to receive important tax-related documents in the mail. They serve as a reminder that the deadline for submitting your tax return is looming ahead on April 17. Here is some advice on what you can do to better ensure that your return is completed on time and accurately:
You will be receiving many of the documents we will need to complete your return within the next month or two. This may include a W-2 from your employer showing what you've earned this year, Forms 1099 reporting any additional earnings and investment income you've received and statements from your mortgage company, bank or other lender with details that will need to be reported on your return.
You may also receive other paperwork, documenting medical bills you've paid and charitable donations or financial investments you have made. We recommend that you set aside all of this material as soon as you receive it in a special folder or envelope so that you don't have to search for it when it is time to come in for your tax appointment.
Make Order Out of Chaos
Gathering your documentation is a good first step, but it's also important to put it in workable order. Take statements and papers out of the envelopes in which they were mailed so they are easier to identify and access. Sort the paperwork into different files or folders based on whether it relates, for example, to income or deductions. You might also want to make a list of the documents you have and the amounts involved in each case. We can certainly help you with this process if you have any questions.
Note: If you are a current client of our firm, we have recently sent you an organizer to assist you with the organization process.
Prepare Throughout the Year
Not all of the documents we require to prepare your tax return will come in the mail in January and February. For example, we may need credit card or bank statements and records of cancelled checks that you receive during the year that show purchases or transactions you have made. We might also use receipts that verify items you're deducting or donations you have made.
You should also set aside documents relating to major events during the last year, including the closing documents and mortgage information for a home purchase. That's why it's a good idea to create a tax file for next year today, to gather the material we'll need for next year's return now.
Please call us with any questions you may have about what is needed to prepare your 2011 tax returns.
"Copyright 2010 The American Institute of Certified Public Accountants"
January 6, 2012 marks five years since the untimely passing of Randy. He was a dear friend, a true leader, an astute businessman, a mentor to many, and always remembered his family came first. Randy was a founder and acted as the managing partner of Rager, Lehman & Houck, P.C. for many years, leading the firm to grow and prosper while holding to high moral and business principles. Randy also acted as a true civic leader in numerous organizations in our region, including chairman of the board of Carroll County General Hospital and charter member of the Rotary Club of Bonds Meadow. While accomplishing these important milestones, Randy always remembered to take time to be with his wife and children as a wonderful husband and devoted father. Randy left a legacy of how a true leader should live his business, civic and personal life.
For anyone interested in remembering Randy through a memorial contribution, we can recommend the Rotary Club of Bonds Meadow Randy E. Rager Scholarship Fund. They have distributed nine $1,500 scholarships to date to students from Winters Mill and Westminster High Schools. This permanent remembrance of Randy is a great way to honor his life while providing an ongoing legacy of educating worthy students. You may direct any questions or donations to David R. Peloquin, chairman of the Scholarship Fund at 205 East Main Street, Westminster, MD 21157.
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