Sunday, September 30, 2012

5 TIPS ON GAMBLING INCOME AND LOSSES


Do you bet on the ponies, play cards or enjoy slot machines, then you should know that as a casual gambler, your gambling winnings are fully taxable and must be reported on your income tax return. You can also deduct your gambling losses…but only up to the extent of your winnings.

Here are 5 important tips about gambling and taxes:
1. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes such as cars and trips.
2. If you receive a certain amount of gambling winnings or if you have any winnings that are subject to federal tax withholding, the payer is required to issue you a Form W-2G, Certain Gambling Winnings. The payer must give you a W-2G if you receive:
  • $1,200 or more in gambling winnings from bingo or slot machines;
  • $1,500 or more in proceeds (the amount of winnings minus the amount of the wager) from keno;
  • More than $5,000 in winnings (reduced by the wager or buy-in) from a poker tournament;
  • $600 or more in gambling winnings (except winnings from bingo, keno, slot machines, and poker tournaments) and the payout is at least 300 times the amount of the wager; or
  • Any other gambling winnings subject to federal income tax withholding.

3. Generally, you report all gambling winnings on the “Other income” line of Form 1040, U.S. Federal Income Tax Return.
4. You can claim your gambling losses up to the amount of your winnings on Schedule A, Itemized Deductions, under ‘Other Miscellaneous Deductions.' You must report the full amount of your winnings as income and claim your allowable losses separately. You cannot reduce your gambling winnings by your gambling losses and report the difference. Your records should also show your winnings separately from your losses.
5. Keep accurate records. If you are going to deduct gambling losses, you must have receipts, tickets, statements and documentation such as a diary or similar record of your losses and winnings.

Saturday, September 29, 2012

TIMOTHY GEITHNER, DAVE CAMP HUDDLE ON 'FISCAL CLIFF'


House Ways and Means Committee Chairman Dave Camp quietly huddled with Treasury Secretary Timothy Geithner Wednesday morning about the so-called fiscal cliff.
The meeting marks an uptick in discussions between the Obama administration and congressional Republicans in gaming out the year-end expiration of all income tax rates, the hiking of the nation’s borrowing cap and massive cuts to domestic and Pentagon spending set to kick in at the beginning of 2013.

To read more of this article: CLICK HERE

Friday, September 28, 2012

KANSAS CITY FEDERAL RESERVE ON THE NEBRASKA ECONOMY


The Kansas City Federal Reserve just issued a paper on the Nebraska economy and I thought that you would be interested the farm numbers especially how it compared the current situation with the problems agriculture had back in the 1980’s.  To equal a 1980s farm income demise, current farm revenue would need  to drop by 21.4% and the value of total farm production would need to decrease by 15.7%.

The paper also estimated that crop prices would need to drop to the following prices:
§ Corn – $3.49 per bushel
§ Wheat – $3.96 per bushel
§ Soybeans – $9.00 per bushel
This is not a technical paper but more graphs and pictures.  I think this is worth spending a few minutes looking at.
 
To read the paper: CLICK HERE

Thursday, September 27, 2012

US FARM LAND VALUES 2011


In the United States, farm real estate value, a measurement of the value of all land and buildings on farms, averaged $2,350 per acre for 2011, up 6.8 percent from 2010. Regional changes in the average value ranged from a 15.9 percent increase in the Corn Belt region to a 2 percent decline in the Southeast region. The highest values remained in the Northeast region at $4,690 per acre. The Mountain region had the lowest value, $923 per acre.

The cropland value increased by $260 per acre (9.4 percent) to $3,030 per acre. In the Northern Plains and Corn Belt regions, the average value increased 17.2 and 16 percent, respectively, from the previous year. However, in the Northeast and Southeast regions, values decreased by 1.3 percent and 1.1 percent, respectively.

Meanwhile, pasture value increased to $1,100 per acre or 1.9 percent above 2010. The Southwest region had the largest percentage decrease in value, 8.4 percent below 2010. The Corn Belt and Northern Plains regions had the highest percentage increase, both 6.6 percent above 2010.

Saturday, September 22, 2012

PAUL RYAN


Q: You seem like a pretty bright guy. What do you think about this? Some of my friends are critical of Paul Ryan because of his budget proposal that he put out a few years back. They say that he would take away a lot of benefits that the government gives us. I have heard others say it is better to do something.

Is his plan something I should vote for?

A:  Thanks for the compliment. My ex would not agree with you about me being such a bright guy.

Before I respond, I have a couple of comments about your question. First of all, when you vote for president there is really only so much they can do without the backing of Congress. Secondly, Paul Ryan is the vice presidential candidate. Romney will be the prime idea guy so voting for Romney/Ryan is not a vote for Paul Ryan's budget proposal.

I also have to make a comment about your friends statement that "he would take away a lot of benefits that the government gives us." You must realize that if the government gives us a benefit that cost money, they must either take money from others or print more money that puts us further in debt.

Now, finally to respond to your question - We have to go back to early 2011 when Paul Ryan was Chairman of the House Budget Committee. In the opinion of many economists, unlike the typical Congressional budget resolution, the Ryan plan was not only comprehensive in its scope, but it was presented in a refreshingly transparent manner.

Every proposal in this nearly 75-page document—from discretionary spending and Medicaid, to taxes and welfare spending—was explained and justified in a way that any taxpayer could understand.

The press and critics zeroed in on Ryan's bold proposals for reforming entitlements, such as Medicaid and Medicare. Unfortunately, serious attention was not given to the tax side of the plan. Making the tax system conducive to long-term economic growth is just as critical to solving the nation's fiscal crisis as is reining in uncontrolled spending.

I could go on and on about the plan, but let me say this - At least it was a starting point. In my opinion, at least he and his committee had the guts to start the process.

Friday, September 21, 2012

SECTION 179 FOR 2013


As we are doing year end tax planning, the question has come up several times on how to plan for the fast write off of equipment called section 179. It is confusing. The current law is a limit of $25,000 for 2013, but will Congress change this low number. Who knows?

Both the President and Congress have discussed increasing the deduction up to $500,000 with a phase-out starting at $2 million. It appears at the moment that the Democrats are pushing this more than the Republicans, but they have other incentives that may provide small business tax relief similar to the Section 179 deduction.

There is even a chance that it may go to $500,000 from the current $139,000 in 2012. Unfortunatey we will not know until the election is over.

THIS TYPE OF CHARITABLE CONTRIBUTION DOES NOT WORK


I don’t know how many times I have been asked if this charitable strategy will work. Give money to a charitable organization and then have them give a scholarship to a related party. Someone apparently tried this and the IRS weighed in.

In a recent case, the IRS ruled that making a donation for one person’s benefit kills the tax deduction. In this situation, a donor who contributed to her church’s scholarship fund wanted the church to use the money she gave for the college tuition costs of the minister’s daughter. The contribution is recast as a gift from the donor to the minister’s daughter, and no deduction is permitted.

Wednesday, September 19, 2012

EMAIL SCAM NOT FROM IRS


We have been notified by several of our clients, that they have received an email that looks like this one below:

 
Subject: Your IRS tax transfer is declined.
Internal Revenue Service United States Department
of the Treasury (IRS)
Your Income Tax remittance (ID: xxxxxxxxxxx), recently ordered for processing from your bank account was turned down by your Bank.

Rejected Tax transfer
Tax Transaction ID:
Row of numbers here
Reason of rejection
See details in the report below
Income Tax Transaction Report
tax_report_.doc (Microsoft Word Document)

 Internal Revenue Service St. Davis 00343 NY

 
This is a SCAM. The IRS does not email you any type of notice in this manner. Please do not open the attachment. If you receive an email similar to this one, but are unsure of its reliability please contact the IRS or your accountant.

Friday, September 14, 2012

DID YOU GET A CHECK BACK FROM YOUR INSURANCE COMPANY


Some employers are receiving health insurance rebates. If you are one of those lucky employers you are required to act quickly.

Generally you have three months to pass the employees’ share back to the employee.

If you are wondering why you received the rebate, it is because the health reform law requires insurers that don’t spend enough of the premiums on medical care and quality improvement to rebate part of the premiums.

The rebates started going out in July. We are seeing some employers generating goodwill by giving the full amount to employees through premium reductions or cash payouts, even though businesses can generally keep the portion of rebates attributable to employer contributions.

A word of caution, there are complicted rules on the potential taxability of the rebates.

Thursday, September 13, 2012

YOU CAN'T ROUND ON YOUR PAYROLL REPORTS


This was hard to believe. The IRS put out a memo and said that rounding to the nearest dollar on Form 941 is not allowable.

Neither the form nor instructions permit rounding. And the law gives filers the option to report in cents on all tax forms, so IRS can’t remove the cents column. Employers will have to keep reporting their payroll tax liability to the penny.

Make any 'cent's to you...

IRS ANNOUNCES 2013 IRA AND GIFT TAX NUMBERS


Two tax breaks will be larger next year, thanks to an increase in inflation.

The ceiling on IRA contributions will jump to $5,500, a $500 increase.
  • As a result, taxpayers age 50 or older in 2013 will be able to put in up to $6,500.
It is also calculated that the annual gift tax exclusion will rise to $14,000, up $1,000 from 2012.
  • This is not official yet. The Revenue Service will officially announce these figures next month.

Wednesday, September 12, 2012

ACCOUNTANTS NOT OPTIMISTIC ABOUT THE ECONOMIC FUTURE


I don't think any profession is in a better position to judge the economy than CPAs. We are on the front line dealing with clients in all aspects of their business.

Now a new survey from our governing organization, the American Institute of Certified Public Accountants (AICPA), shows that CPA's economic outlook has diminished.

CPA executives’ optimism over the U.S. economy has faded substantially over the past two quarters, the AICPA’s Business & Industry Economic Outlook Survey for the third quarter shows. After a significant rise in confidence that ended in the first quarter of 2012, CPAs report dimming expectations in virtually every major economic indicator.

The CPA Outlook Index--a comprehensive gauge of executive sentiment within the survey--fell four points to 63 for the quarter. The index had matched a post-recession high of 69 at the start of this year, but has declined each of the past two quarters.

Friday, September 7, 2012

SAFE HARVEST


Life gets especially busy this time of year in rural Nebraska as farmers jump full swing into harvest. Farmers have a high level of stress and anxiety to get a lot done in a short time.

As the days progress swiftly toward winter, farm work too moves at an often frantic pace with long days behind the wheel of a combine or a tractor or a truck. With those increased work hours come fatigue and the very real danger that one slip, one wrong move, could endanger a farmer’s life.

In the fields, farmers have to think safety every minute. The Nebraska Corn Board reports that in a typical year more than 500 people die in agricultural work in the U.S. National Farm Safety , said there were more than 50 grain bin incidents, auger related injuries, power take offs (PTO) incidents and more than two dozen fatalities in the U.S. in 2011. As for here in Nebraska the University of Nebraska show that, since 1969, nearly 1,200 Nebraskans have died in farm accidents--an average of more than 32 farm-related deaths per year.

Here are some tips for farm operators that we’ve gleaned from the many Internet sites dealing with the topic:
     Use extra caution when backing equipment. It is easy to overlook something or more importantly, someone, especially a child.
     Ensure that trained family members and employees are operating the equipment.
     Check that PTOs are well protected to avoid contact with clothing or people during operation. One statistic said rotating equipment can rip and wrap 4 to 8 feet of clothing per second. Obviously, there’s not much chance to escape injury or death if that happens.
     Check to make sure safety shields are in place on all equipment everyday – they are there for a reason.
·      Always be aware of power lines that can come in contact with moving equipment and augers around grain bins.
·     Grain bins deserve special attention and caution when grain is being loaded and removed. Safety measures should be put in place to avoid any risk of entrapment and suffocation.
·     Take periodic breaks to help avoid fatigue. Take a rest break for a few minutes, go for a short walk or check in with family members.
·     Protective eye and ear wear is important in many situations.
·     Equip tractors and combines with a fire extinguisher, as dry crop residue is fuel for a fire.
·     Keep a tractor with a disc at the end of the field you are harvesting, with the drought conditions it is better to be prepared then a fire taking your fields.

No one should become a statistic for the sake of getting done a day or two earlier. Let’s keep harvest a beautiful, bountiful and safe season.

Thursday, September 6, 2012

DROUGHT, LOW EXPORT DEMAND SAPPING MIDWEST ECONOMY


(AP/JournalStar.com) -- The AP reports that the latest Mid-America Business Conditions Index shows "continuing drought and reduced export demand for U.S. products are draining the economy in nine Midwest and Plains states," including Nebraska.  The index in August "remained below growth neutral for a second month in a row, the first time that has happened since July 2009."  Creighton University economist Ernie Goss said:  "The drought, the fiscal cliff, the elections and European economic turmoil are all weighing on economic confidence."

To read more of this article: CLICK HERE

 
 

FOOD STAMP USE HITS RECORD HIGH


Food stamp use reached a record high in June, the U.S. Department of Agriculture said this week, with 46.7 million people enrolled in the program for low-income families. The latest figures mean that food stamps will once again be a flash point in the presidential campaign. The number of people on food stamps rose 0.4 percent from May and was 3.3 percent higher than a year earlier.

“Too many middle-class families who have fallen on hard times are still struggling,” said Agriculture Secretary Tom Vilsack. The program is “one more example of government incompetence,” said Sen. Jeff Sessions (R-Ala.), who wants cuts in the program. It now costs $71.8 billion a year.

Wednesday, September 5, 2012

ON A PERSONAL NOTE

 
I hope everyone had a great Labor Day weekend. I spent the weekend camping out and canoeing with my 15 year old son, Ryan and his Boy Scout Troop. We spent a day on the water going down the Niobrara river. This beautiful river has been named one of the top 25 canoeing rivers in the United States. The scenery and the wild life are amazing. Even though the bugs were really bad and it was really hot, it was a great time. (I should add that the ground was a little hard.) As my family has heard me say several times, “life is short, make memories.”

I hope that you made as many memories this Labor Day as I did.