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Tuesday, December 13, 2011

Payroll News : Lawmakers in showdown over payroll tax cuts

Despite public confidence in the U.S. Congress plunging to record lows, Democrats and Republicans have shown little inclination to end the political brinkmanship that has gridlocked Congress and alarmed investors.

Furthermore Republicans have been split over extending the payroll tax cut, with many rank-and-file members skeptical that it has created jobs. Republican leaders, however, fear a backlash from voters in 2012 if the tax cut is allowed to expire.

Additional FYI: Without an extension, the payroll tax would revert to 6.2 percent from its current rate of 4.2 percent, resulting in an average increase of $1,000 per family for 160 million Americans.

Tuesday, October 11, 2011

Payroll Taxes and Your Business

Many small businesses fall behind
in paying taxes at some
point during their existence.
Payroll taxes are all taxes that are collected, by federal, state, and local governments, based on salaries and wages paid to employees. These taxes must be withheld from wages by all businesses that have employees. These taxes are remitted on a monthly or semi-weekly basis, depending on the quantity owed. Businesses are also required to make regularly scheduled reports to the Internal Revenue Service (IRS) and to state and local taxing agencies about the amount of taxes owed and paid. Businesses are not required to withhold payroll taxes on wages paid to independent contractors. Self-employed persons are responsible for paying their own payroll or income taxes directly to the appropriate taxing entity.

Many small businesses fall behind in paying these taxes or filing the associated reports at some time during their existence. Such an error is, however, very costly because significant interest and penalties apply for late payment or nonpayment of payroll taxes. In fact, the Trust Fund Recovery Penalty allows the IRS to hold a small business owner or accountant personally liable for 100 percent of the amount owed, even in cases where the business has gone bankrupt.

READ MORE from Inc.com
Inc.com
Business Taxes 
Tax Withholding 
Electronic Tax Filing
Tax Preparation Software


Purchasing QuickBooks
products through
GBC, will qualify for an
significant discount.
GBC Offers Quickbooks Support

We offer QuickBooks support and consulting at various levels for clients who want to use QuickBooks. We start by assisting clients in determining the QuickBooks edition that serves their financial recordkeeping and operations best.

Purchasing QuickBooks through GBC Services, clients can realize discounts of up to 50%.

Friday, October 7, 2011

Jobs Plan Includes Tax Breaks for Small Firms

Tax breaks account for $253 billion
of the president's package.
President Barack Obama outlined a $447 billion jobs plan Thursday night that would reduce payroll taxes for workers and small businesses.

The plan also would eliminate payroll taxes for businesses that hire additional employees or increase wages for current workers. The president also wants to give a $4,000 tax credit to businesses that hire workers who have been unemployed for six months or more.

 The plan, delivered to a joint session of Congress, also calls for extending into 2012 a current tax break that allows small businesses to immediately write off 100 percent of their investments in new equipment. The president also wants to give a tax break to businesses that hire unemployed veterans.

READ MORE: Obama's Job Plan Includes Tax breaks for Small Firms

GBC Services can help you
organize tax information
including federal and state tax
.
GBC Services in Atlanta Georgia can supply you with online payroll processing and help you organize tax information including the filing of tax returns, both state and federal.

Our expansive payroll services also include new hire and workers compensation reporting, customized payroll reports and time sheet submission via phone, fax or email. GBC Services in Atlanta can also set up a time clock interface as well as direct deposit to help you keep track of employee itineraries and payment. READ MORE: GBC Payroll Services

Wednesday, August 31, 2011

What Small Business Needs Should Accounting Services Meet?

A high-quality accounting firm
will address the concerns of
your company.
There are many consulting firms that promise comprehensive Atlanta accounting services, but not all are the same. Indeed, if you are in the market for someone to take care of the tax and payroll aspects of your business, it pays to investigate the company you decide to work with.

Think about it. Anyone handling your company's finances is handling the life-blood of your business. Would you hand that responsibility over to just anyone?

Selecting the right accounting solutions in Atlanta, Georgia, may seem a bit challenging at first...

READ MORE GBC Tax Services Website

For All Your Accounting Needs Call GBC
 678-366-9232

Thursday, June 30, 2011

The Joys of Parental Tax Benefits

OK. Tax credits for parents don't scratch the surface of how much it costs to raise a child, but every penny helps. Besides, the joy of watching a child grow into a fulfilled and wholesome person is priceless. So parents, while you have a moment to yourself, consider the following tax benefits as a government supplement to various costs at various stages of your child's life:

1. Dependents

In most cases, a child can be claimed as a dependent in the year they were born.

2. Child Tax Credit

You may be able to take this credit on your tax return for each of your children under age 17. If you do not benefit from the full amount of the Child Tax Credit, you may be eligible for the Additional Child Tax Credit.

3. Child and Dependent Care Credit

You may be able to claim the credit if you pay someone to care for your child under age 13 so that you can work or look for work.

4. Earned Income Tax Credit

The EITC is a benefit for certain people who work and have earned income from wages, self-employment or farming. EITC reduces the amount of tax you owe and may also give you a refund.

5. Adoption Credit

You may be able to take a tax credit for qualifying expenses paid to adopt an eligible child. Taxpayers claiming the adoption credit must file a paper tax return because adoption-related documentation must be included.

6. Children with Earned Income

If your child has income earned from working they may be required to file a tax return.

7. Children with Investment Income

Under certain circumstances a child’s investment income may be taxed at the parent’s tax rate.

8. Higher Education Credits

Education tax credits can help offset the costs of education. The American Opportunity and the Lifetime Learning Credit are education credits that reduce your federal income tax dollar-for-dollar, unlike a deduction, which reduces your taxable income.

9. Student Loan Interest

You may be able to deduct interest you pay on a qualified student loan. The deduction is claimed as an adjustment to income so you do not need to itemize your deductions.

10. Self-employed Health Insurance Deduction

If you were self-employed and paid for health insurance, you may be able to deduct any premiums you paid for coverage after March 29, 2010, for any child of yours who was under age 27 at the end of 2010, even if the child was not your dependent.

For more information, visit our website: http://www.gbctax.com/income_tax_services.asp

Sunday, January 20, 2008

A Middle Class Legacy of Rich Tax Cuts

It is said that “money is the No. 1 fighting word in America”; therefore, it shouldn’t come as any surprise that Americans wrote more letters to their congressional representatives about money in 1969 than about the Vietnam War. It came about after a popular upheaval, decrying how “155 individual taxpayers with incomes above $200,000 paid no federal income tax on their 1967 tax returns” (Burman et al. 2002). The 155 individual taxpayers cited by Joseph Barr, who was Secretary of the Treasury under Lyndon Johnson from 1968 to 1969, included 20 millionaires!

Thus the Tax Reform Act of 1969 was introduced, and, after 18 major legislative changes, the 10% add-on minimum income tax evolved into what is commonly known today as the Alternative Minimum Tax (AMT). AMT now encompasses a complex set of rules that assesses a minimum tax rate of either 26% or 28% on Alternative Minimum Taxable Income (AMTI) and tacks it on the regular tax owed, currently affecting individual taxpayers with an Adjusted Gross Income even lower than $50,000!

For more information, visit our website: http://www.gbctax.com/income_tax_services.asp
Comparatively, when the minimum tax was first introduced in 1969, the 10% additional tax was assessed on incomes exceeding $200,000, which by most calculations, equals more than $1.1 million in 2007 – after adjusting for inflation; therefore, AMT, though originally aimed at the very rich who, through various loopholes in the tax system, had been able to purchase their way into paying no federal income tax, has now become a major source of government revenue assessed primarily on middle-income households. While there has been a 160% increase in the minimum tax rate since 1969, income subject to the tax has decreased by 95% in value. It's what is popularly described as the "AMT mistake": the government's failure to adjust the minimum tax for inflation.

Analysts generally agree that a second and more important mistake behind the AMT’s recent expansion is related to President Bush’s 2001 and 2003 tax cuts, which, ironically, reduced regular income tax without changing the way AMT is calculated, thereby giving the top 1% income earners in the US the most benefit. In other words, by reducing regular tax rates, the 2001 and 2003 tax cuts effectively reduced the income tax paid by households whose regular tax rates are higher than AMT rates. More than 90% of households that reported Adjusted Gross Income (AGI) in excess of $500,000 evaded paying AMT because their regular tax rates are higher than AMT rates, and they are the primary beneficiaries of the 2001 and 2003 tax cuts. Contrastingly, over 90% of upper-middle and middle income households whose AMT is calculated after taking the AMT exemption ($44,350 for single filers, $66,250 MFJ or widowers, and $33,125 MFS), disallowing credits for dependents, medical expenses, state and local taxes, and and other itemized deductions, made up the deficit in the government’s tax revenue created by the reduction in the regular tax rate.

By the numbers, in 2004 (latest complete data on AMT available from the IRS post the 2001 and 2003 cuts), of 132,226,042 tax returns sampled, 3,096,300 were subject to AMT, divided by AGI as follows: 4,714 had no AGI (0.15%); 5,809 had AGIs under $25,000 (0.18%); 14,821 had AGIs between $25,000 and under $50,000 (0.47%); 244,461 had AGIs between $50,000 and under $100,000 (7.9%); 1,095,242 had AGIs between $100,000 and under $200,000 (35.4%); 1,529,159 had AGIs between $200,000 and under $500,000 (49.4%); 149,042 had AGIs between $500,000 and under $1 million (4.8%); and 53,052 had AGIs of $1 million and over (1.7%)!

Naturally, no discussion about tax can be totally devoid of politics. The so-called AMT mistake has been a big boon for the federal government’s coffers. Increases in the AMT rate notwithstanding, which until recently had popularly been viewed as an equalizing tax on the very rich, Republican and Democratic administrations alike have reaped billions in increased revenues without appearing to raise income taxes. However, under assumptions that existing tax credits, like the child credit, would remain in place, “by 2013, the AMT alone would actually raise more revenue than the regular tax alone.”

As in 1969, the United States was at war in 2007. Unlike 1969, there was relatively no outcry when congress failed to “fix” the AMT till the last minute, and, unlike 1969, money does not appear like the no. 1 fighting word in America, as there seems to be little repercussions over a tax that has outlived its intended purpose. If the federal government's intent had been to raise the income tax on middle-income households, then compounding the burden in complicated and costly rules does not constitute a sound economic policy; but the American people's relative complacency about the way AMT has apparently been exploited to effectively fund upper-income households' tax cuts points to uncharacteristic apathy towards the government's ineptitude, deep-rooted corruption, cynicism, or subservience to a combination of interests that embody these and other uncomplimentary traits.

Recent criticisms of the present tax system range from those who lament their smaller proportionate tax, in comparison to taxpayers earning substantially less, to those who think that they are paying too much tax, irrespective of comparative earnings. Ideas for fixing the US tax system range from implementing a complete overhaul of the present tax code to those who aim to abolish the income tax system.

Proposing an eleventh hour one-year fix that shields millions of Americans from an average $2,000 tax assessment, congress’ so-called “fix”, however, has not changed the trend established since 1969: increasing the AMT tax rate while decreasing the AGI subject to the tax. No longer the equalizing tax on the rich, this complex set of rules determining how to calculate AMT, requiring middle-income Americans to tabulate two calculations before totaling their tax liabilities, has now paid for the tax cut upper-income Americans have received since 2001. There are many proposals for fixing the AMT mistake and for relieving the federal government from its subsequent addiction to the revenue; but, unless the tax is either abolished or indexed to affect the taxpayers originally targeted by its introduction in the tax code, middle income taxpayers will continue to tote a disproportionate burden of a questionable political agenda.

To learn more visit our website:http://www.gbctax.com/income_tax_services.asp 

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