Real Estate & Construction Accounting Blog

This month's Special Delivery E-Newsletter includes the following articles:

• Key Provisions in the New Tax Act
• What Business Entity is Best for You?
• Tax Breakdown of Interest Expenses
• Summary of Key Tax Changes for 2011
• New Tax Relief Act Creates Dramatic Gifting Opportunities
• Many Smaller Employers Will Have to Use EFTPS for Payroll Tax Deposits
• Aurum Capital Markets Summary
• Understanding the Energy Efficient Deduction
• College Planning
• Audio Book Club

Key Provisions in the New Tax Act

The recent tax law-the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010-provides a wide array of tax breaks for individuals, businesses and estates, in addition to extending unemployment benefits.  Click here for a brief summary of the key tax provisions in the new law.

What Business Entity is Best for You?

As you are probably well aware, there are several different types of business entities. Which type best suits your current needs? Click here for a summary of the main points.

Tax Breakdown of Interest Expenses

Did you pay any interest expenses last year? The interest may be wholly deductible, partially deductible or not deductible at all. Generally, the amount of the deduction depends on the use of the loan proceeds. Here's the basic breakdown for the 2010 tax year.

Summary of Key Tax Changes for 2011 

The tax laws enacted in the last couple of years contain important income tax and information reporting provisions that are effective for the first time in 2011. To inform you of what's new in the tax rules, here's a summary of the key tax changes for 2011, broken down into three categories: 

• Personal Income Taxes
• Retirement Plan Changes
• Tax Changes for Businesses and Investors

If you'd like to discuss how these changes affect your personal, business or investment situation, please contact us at 440-449-6800.
 

New Tax Relief Act Creates Dramatic Gifting Opportunities

The lifetime unified gift tax credit allows each person to transfer $1 million for 2010 by gift without incurring any gift tax liability. Under the 2010 Tax Relief Act, the unified gift and estate tax credit increases to an exemption equivalent of $5 million for 2011 and 2012. Using this credit now will keep future appreciation on the transferred property out of your estate. However, subject to the effect of the temporary increases for 2011 and 2012, using the lifetime credit against 2010 gifts reduces the credit available for future years.

In addition to gifts subject to the annual exclusion and the lifetime credit, direct payments of tuition made on another person's behalf to a university or other qualified educational organization are also excluded from gift tax, as are direct payments of medical expenses to a medical care provider.

Note: You should consider using appreciated property in making gifts. If the recipients are in lower income tax brackets than you, income from the transferred property, including any gain on sale, will be taxed at lower rates.

Planning Suggestion: It is generally unwise to give property that has declined in value. Rather, you should sell the property and realize the tax benefits of the loss.

Many Smaller Employers Will Have to Use EFTPS for Payroll Tax Deposits

Per the American Payroll Association, the Treasury Department has announced that, as part of a three-pronged initiative to reduce the amount of paper transactions it handles, most employers that now are allowed to use paper Federal Tax Deposit Coupons and checks to make payroll tax deposits will have to make those deposits electronically through the Electronic Federal Tax Payment System (EFTPS) beginning in 2011. The primary exemption will be for employers that have $2,500 or less in quarterly payroll tax liability and that pay their liability when filing their employment tax returns (ie: Forms 941 or 944).

Click here to read more.

Aurum Capital Markets Summary

Please click here for a summary from Aurum Wealth Management Group on the performance of the major market indices through the end of December as well as a recap of the significant events influencing the markets.

Understanding the Energy Efficient Deduction

Skoda Minotti, along with CLS Facility Services, invites you to a seminar on Friday, February 11th (7:30AM to 9:30AM, Cleveland Marriot East) to learn how you can take advantage of the energy efficient tax deduction, which allows building owners to deduct a portion of the expenses incurred for energy efficient building expenditures.

More specifically, the presentation will cover the following:

• Real potential to save 35%-55% on energy costs for buildings 20,000 ft2 +
• An overview of general lighting knowledge
• Information concerning government regulations on mandatory phase outs of non-energy-efficient lighting
• What lighting products need to be replaced and when
• What lighting products are available and which type should you upgrade to
• Rebate money available from the local utility companies
• Getting this accomplished without disruption to your business

We will provide attendees with an estimate of their savings through this deduction. Please bring the following items with you so we can complete this calculation:

• The square footage of your building or buildings
• The type of lighting currently in your facilities
• The name of your utility company and your rate per kWh

Click here for more information on this event, including speaker bios, and to register.

College Planning One-on-One Advisory

With the average private college/university costing $35,000/year and public colleges/universities averaging $15,000/year, selecting a college for a child is one of the biggest financial decisions that many families will ever contemplate. Simply put, it’s a decision that you shouldn’t make alone.

In case you have not had an opportunity to attend one of our recent college planning seminars, we'd like to extend the opportunity to attend a no-cost, one-on-one college planning advisory session to discuss your specific college planning needs.

For more information on these one-on-one advisory sessions, please contact Lou Trivisonno or Michael Van Himbergen at 440-449-6800. Or, you can visit our web site to learn more about our College Planning Services.

Audio Book Club -- How to Win Friends & Influence People by Dale Carnegie

Join area business professionals at the Skoda Minotti office as we continue our monthly audio book discussion with the help of David B. Rust, President of Audio Group, A business audio book club for time-starved people. 

March's featured audio book: How to Win Friends & Influence People by Dale Carnegie

Meeting Details:

• March 1, 2011
• 7:30-9:00 a.m. - A light breakfast will be provided
• Skoda Minotti Office - 6685 Beta Dr, Mayfield Village, Ohio
• Cost: $45 per session
• Meeting Facilitator: David B. Rust, Audio Group President

Click here for more information and to signup.