Knight Accounting and Technology

On a lighter note as i head into the last push of tax season, my friend shared this number trick with me and I love it!  If you start with a penny and double it every day for 30 days, how much do you think it will be worth at the end?  Take a look below, it’s pretty amazing!

Day 1: $.01
Day 2: $.02
Day 3: $.04
Day 4: $.08
Day 5: $.16
Day 6: $.32
Day 7: $.64
Day 8: $1.28
Day 9: $2.56
Day 10: $5.12
Day 11: $10.24
Day 12: $20.48
Day 13: $40.96
Day 14: $81.92
Day 15: $163.84
Day 16: $327.68
Day 17: $655.36
Day 18: $1,310.72
Day 19: $2,621.44
Day 20: $5,242.88
Day 21: $10,485.76
Day 22: $20,971.52
Day 23: $41,943.04
Day 24: $83,886.08
Day 25: $167,772.16
Day 26: $335,544.32
Day 27: $671,088.64
Day 28: $1,342,177.28
Day 29: $2,684,354.56
Day 30: $5,368,709.12

Here’s the quick & dirty of what was approved last night (based on a source from AccountingToday…the details still appear hazy, but this is as close as i can get!)

- Tax rate swill increase to pre-Bush rates on single folks making above $400,000 and married couples making above $450,000 (rates will increase from 35% to 39.6%)

- Permanent, retroactive patch to keep the alternative minimum tax from hitting the majority of the middle class.  If this hasn’t hit you before, it probably won’t hit you this year either

- Capital gains rate will increase from 15% to 20% for most taxpayers (still 15% for lower-income taxpayers)

- Medicare surcharge of 3.8% will hit those with household incomes on single folks making above $200,000 and married couples making above $250,000

- Itemized deductions phased out for on single folks making above $250,000 and married couples making above $300,000

- NO EXTENSION OF PAYROLL TAX – so everyone will start paying in 6.2% into Social Security, instead of the 4.2% that’s been withheld these past 2 years

- Estate tax to fall at 40% tax on estates over $5,000,000

- One-year extension of bonus depreciation, child tax credit, earned income tax credit, and american opportunity tax credit

Here’s a great graphic my friend found on bankrate.com (you may need to click on it to see it full sized, or else here’s a link to the original posting http://finance.yahoo.com/news/9-tax-measures-set-to-fall-over-the–fiscal-cliff–171033432.html)  Let’s keep our fingers crossed for some action in the next 14 days, but if compromise doesn’t come, there will be consequences!

“For a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”–Winston Churchill

“Income tax returns are the most imaginative fiction being written today.”–Herman Wouk

“I am proud to be paying taxes in the United States. The only thing is I could be just as proud for half of the money.”–Arthur Godfrey

“A liberal is someone who feels a great debt to his fellow man, which debt he proposes to pay off with your money.”–G. Gordon Liddy

“The taxpayer: that’s someone who works for the federal government, but doesn’t have to take a civil service examination.”– Ronald Reagan

“The income tax created more criminals than any other single act of government.”–Barry Goldwater

“Collecting more taxes than is absolutely necessary is legalized robbery.”–Calvin Coolidge

“This is too difficult for a mathematician. It takes a philosopher. The hardest thing in the world to understand is the income tax.”–Albert Einstein

“The difference between death and taxes is death doesn’t get worse every time Congress meets.”–Will Rogers

“In 1790, the nation which had fought a revolution against taxation without representation discovered that some of its citizens weren’t much happier about taxation with representation.”–Lyndon B. Johnson

“Why does a slight tax increase cost you two hundred dollars and a substantial tax cut save you thirty cents?”–Peg Bracken

“You must pay taxes. But there’s no law that says you gotta leave a tip.”–Morgan Stanley advertisement

Knight Accounting & Technology is proud to announce the 2012 Women’s Small Business Conference.  I have wiggled my way onto the organizing committee, and we have a GREAT lineup of keynote speakers (Sasha Galbraith and Corey Ciocchettti, 2 of the smartest people I’ve ever met!), education seminars, one-on-one counseling and networking opportunities.  If you are starting a small business, running a small business, want to learn about WOSB or other women-owned priority government contracting status…this is the place to be!

Thursday, August 9th – Keystone, CO    See the flyer attached (or email me at cpa@cpamichele.com if you want a copy): Keystone Women’s Conference Flyer 2012

To register, go to www.coloradosbdc.org.  Event is being held at the beautiful Keystone Lodge, 21966 US Highway 6, Keystone, CO 80435.  Conference is from 7:30am – 5:00pm, networking from 5:00 – 6:30.

Cost is $35 before 7/23/12, $50 after that date.  The cost includes breakfast, lunch and a book from one of our speakers…well worth it!

Check out slide 12 of 14…last year I was in the Wall Street Journal, now I’m quoted on CNN Money!  I may not have aspirations to see my name in lights, but I can’t get enough of seeing it in print!

http://money.cnn.com/galleries/2012/pf/taxes/1203/gallery.wacky-tax-deductions/12.html

Visit www.cpamichele.com and click on the Schedule page.  Book early to get the best timeslot/location that works for you!

Good news for taxpayers, bad news for tax preparers…the IRS announced a new mileage rate to take effect July 1, 2011.  The rates will jump as follows:

Business Mileage – from 51 cents to 55.5 cents
Medical/Moving Mileage – from 19 cents to 24.5 cents
Charitable Mileage remains the same at 14 cents

These new rates refelct the increased gas prices this year,  but it means that small business owners ABSOLUTELY must track their mileage on a regular basis in order to properly classify their mileage and be able to take advantage of the increased mileage rates.

DENVER (Source: 9 news) - If you’re unemployed, buckling under bills, and at-risk of losing your home, the government might be able to help you make your mortgage payments.

Colorado homeowners will get more than $41 million in interest-free loans under the U.S. Department of Housing and Urban Development’s (HUD) Emergency Homeowners’ Loan Program (EHLP). Some people who meet specific criteria may not have to pay the money back.

Housing authorities are expecting a flood of applicants in Colorado. Authorities are only taking pre-applications right now. All those names will go into a lottery. If your name is drawn, you can then apply for the loan program.

Under the program, about 1,000 people in Colorado will get a home loan of up to $50,000 for two years, interest free. To qualify, you have to show your income dropped at least 15 percent due to serious illness or job loss, you have be at least three months behind on your mortgage, and your household income in 2009 had to be less than $93,840.

HUD is dividing $1 billion among 27 states and Puerto Rico and Colorado’s share is $41 million. When the money is spent, the program is over. The program is designed to help people who are at-risk of losing their homes. Colorado has the 10th highest foreclosure rate in the nation.

“The phones are ringing off the hook,” Zachary Urban of the Adams County Housing Authority said. “People are knocking on the door. People are in a very tight spot right now. So, any hope out there is something that they’re rushing to see.”

Supporters of the program say these loans will help the economy by preventing foreclosures.

Some folks won’t even have to pay the money back if they’re in the same financial trouble five years from now.

There are critics who say the program basically amounts to a $50,000 handout. The Wall Street Journal reports some Republicans in the House of Representatives tried to kill the program.

Homeowners have one month to apply. The deadline is July 22.

For more information, visit www.FindEHLP.org or call toll free at 855-FIND-EHLP (346-3345).

On April 14, 2011, President Obama signed into law the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 to rescind the Form 1099 tax reporting requirement included in the Patient Protection and Affordable Care Act (PPACA) of Heath Care Reform.  (In English, the President reversed part of the Health Care bill)

Under the reporting requirement, businesses would have been required to issue a Form 1099-MISC to corporations as well as non-corporate entities for the purchase of tangible goods and services over $600. The tax filing requirement did not directly relate to health care but was initially included as a funding measure for the health care bill by reducing un-reported and under-reported income that would otherwise be taxable. However, small firms and self-employed individuals voiced concerns that the requirement would bury them in paperwork.

 In addition, the law also repeals the expanded Form 1099-MISC reporting under the Small Business Jobs Act of 2010 that required individuals who receive rental income from real estate to report rental property expenses on Form 1099-MISC.