Study shows U.S. tax code is still a difficult one to navigate The U.S. did not stack up well against the 182 other economies measured in a soon-to-be released report by the World Bank,International Finance Corp. and PriceWaterhouseCoopers. The study, called "Paying Taxes 2012,"ranked countries on how easy it is to comply with their respective tax codes. The U.S. ranked 69 out of 183 economies and is down one spot from last year, due in part to the efforts of other countries to streamline their tax codes
Employers in 20 states may face higher 2011 FUTA rates absent legislative fix. States affected include Alabama, Arkansas, California, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Kentucky, Michigan, Minnesota, Missouri, North Carolina, New Jersey, Nevada, New York, Ohio, Pennsylvania, Rhode Island, South Carolina, Virginia and Wisconsin. The increase in tax could amount to as much as $ 63.00 per employee.
Elizabeth Amaral has now been with the firm for 12 years !!!
Sarah Carr has now been witrh the firm 6 years !!!!
Mariana Ambrosio has now been with the firm 16 years !!!!
RHODE ISLAND TAXPAYERS...The RI Division of Taxation encourages businesses and individuals who are not in compliance with Rhode Island tax laws to come forward voluntarily to pay Rhode Island taxes. The goal of the Division of Taxation is to ensure that all taxpayers living in Rhode Island or doing business in this state are registered, collecting and paying the taxes they are obligated to pay. Qualified taxpayers may request to pay past due taxes under this program.THERE IS A PROVISION TO WAIVE MANY OFTHE PENALTIES ASSOCUIATED WITH THE FILING OF A LATE RETURN OR MAKING A LATE PAYMENT
2010 TAX CHANGES FOR PERSONAL TAX RETURNS
Despite calls for simplifying the tax laws, they have actually been made much more complicated in the last few years. Year after year, there have been numerous tax changes that even some professionals have a tough time keeping up with. This filing season is no different. The 2010 Form 1040 reflects a number of new tax breaks. Some are straightforward. Others are complex. Some present choices. But they all provide an opportunity to save money.
The following items are the key changes for this tax filing year:
(1) Roth IRA rollovers no longer restricted. You can now make a qualified rollover contribution to a Roth IRA, regardless of the amount of your modified adjusted gross income.
(2) Income from Roth rollover can be spread out. Half of any income that results from a rollover or conversion to a Roth IRA from another retirement plan in 2010 is included in income in 2011, and the other half in 2012, unless you elect to include all of it in 2010.
(3) Self-employed health insurance deduction. Effective March 30, 2010, a self-employed person who paid for health insurance may be able to include in his self-employed health insurance deduction any premiums he paid to cover his child who was under age 27 at the end of 2010, even if the child was not his dependent. Also, health insurance costs for a taxpayer and his family are deductible in computing 2010 self-employment tax.
(4) Small business health insurance credit. There's a new tax credit for an eligible small employer who makes qualifying contributions to buy health insurance for his employees. This credit is very complex but it can yield substantial tax savings. In general, the credit is 35% of premiums paid and can be taken against regular and alternative minimum tax.
(5) Limits on personal exemptions and itemized deductions ended. You no longer lose part of your deduction for personal exemptions and itemized deductions, regardless of the amount of your adjusted gross income.
(6) Personal casualty and theft loss limit reduced. Each personal casualty or theft loss is limited to the excess of the loss over $100 (instead of the $500 limit that applied for 2009). This yields larger deductions and thus greater tax savings for affected individuals.
(7) Corrosive drywall damage. A taxpayer who paid for repairs to his personal residence or household appliances because of corrosive drywall that was installed between 2001 and 2008 may be able to deduct those amounts as casualty losses under a special safe harbor crafted by the IRS.
(8) Homebuyer credit. An eligible first-time homebuyer (and a long-term resident treated as a first-time homebuyer) may be able to claim a first-time homebuyer credit for a home that was purchased in 2010. To qualify, the home must have cost $800,000 or less. You generally cannot claim the credit for a home you bought after April 30, 2010. However, you may be able to claim the credit if you entered into a written binding contract before May 1, 2010, to buy the home before July 1, 2010, and actually bought the home before October 1, 2010.
(9) Adoption credit. The maximum adoption credit is $13,170 per eligible child for both non-special needs adoptions and special needs adoptions. In addition, the adoption credit is refundable, i.e., you get the credit even if it exceeds your taxes.
(10) Gifts to charity. The provision that excludes up to $100,000 of qualified charitable distributions (distributions to a charity from an Individual Retirement Account) has been extended. If you elect, a qualified charitable distribution made in January of 2011, will be treated as made in 2010.
(11) Enhanced small business expensing (Section 179 expensing). To help small businesses quickly recover the cost of capital outlays, small business taxpayers can elect to write off these expenditures in the year they are made instead of recovering them through depreciation. For 2010, you generally may expense up to $500,000 of qualifying property placed in service during the tax year. This annual limit is reduced by the amount by which the cost of property placed in service exceeds $2,000,000.
(12) Special depreciation allowance. Businesses that acquire and place qualified property into service after September 8, 2010 can now claim a depreciation allowance in the placed-in-service year equal to 100% of the cost of the property. Businesses that acquired qualified property from January 1, 2010 through September 8, 2010 can claim a bonus first-year depreciation allowance of 50% of the cost of the property.
(13) Cellular telephones. Cellular telephones (cell phones) and other similar telecommunications equipment have been removed from the categories of “listed property.” This means that cell phones can be deducted or depreciated like other business property, without onerous record keeping requirements.
(14) Carryback of general business credits. Generally, a business's unused general business credits can be carried back to offset taxes paid in the previous year, and the remaining amount can be carried forward for 20 years to offset future tax liabilities. However, for 2010, eligible small businesses can carry back unused general business credits for five years instead of just one.
(15) Luxury auto limits. First-year luxury auto limits for vehicles first placed in service in 2010 are $11,060 for autos and $11,160 for light trucks or vans (for vehicles ineligible for bonus depreciation, or if the taxpayer elects out, $3,060 and $3,160, respectively).
As you can see, there are many new rules for this filing season. To make sure that you take maximum advantage of them and preexisting rules, which themselves can be complicated, you should review these with your personal tax advisor.
James Ventriglia atttended and spoke at the DDIFO regional meeting held in Chicago. The topic of his talk was the new HIRE act and how it provided tax saving opportunities for Dunkin Donuts franchisees.
MASSACHUSETTS TAX AMNESTY PROGRAM
The Massachusetts Commissioner of Revenue
has established a 2-month amnesty period starting April 1, 2010
until June 1, 2010 applicable for tax periods ending on or before
December 31, 2009 that is limited to sales-use taxes, withholding
taxes, and certain business tax liabilities. ( Massachusetts Technical
Information Release 10-5, 03/12/2010 .)
Eligible tax types. The amnesty program
is limited to taxpayers with the following existing business tax
liabilities: sales-use tax, sales tax on telecommunications services,
meals tax, meals tax local option, materialman sales tax, withholding
income, performer withholding, pass-through entity withholding,
lottery annuity withholding, room occupancy excise, room occupancy
excise local option, convention center financing fees on room occupancy
in Boston, Cambridge, Chicopee, Springfield, West Springfield, and
Worcester, convention center financing surcharge for sight-seeing
tours, convention center financing surcharge on vehicle rentals
in Boston, convention center financing surcharge on parking in Boston,
Springfield, and Worcester, deeds excise, cigarette excise, cigars
and smoking tobacco excise, club alcohol beverage excise, gasoline
excise, special fuels excise, special fuels excise local option,
and boat/recreational vehicles sales tax.
Eligibility. The program is open to taxpayers who have been issued
a Tax Amnesty Notice and have an unpaid and previously self-assessed
tax liability for an eligible tax type, or have been previously
assessed a tax liability for an eligible tax type are properly disputing
the unpaid liability, or are delinquent in paying the liability.
Those who have entered into a payment agreement before the start
of the amnesty period are eligible. Those with pending appeals qualify
if they receive a Tax Amnesty Notice and timely pays all taxes and
interest owed in full. Payment of the outstanding liability does
not constitute a forfeiture of statutory rights of appeal or an
admission of liability for the disputed assessment.
Not eligible. Taxpayers that are the
subject of a tax-related criminal prosecution or investigation,
prior to April 1, 2010, are not eligible. Those that have signed
a settlement agreement are not eligible for amnesty for the tax
periods covered by the settlement agreement including any settlement
reached through the Department's Litigation Bureau, Office of Appeals
or Offer-in-Settlement Unit. Those who have paid all tax and interest
due relating to any outstanding assessment but who, at the start
of the amnesty period, still owe or are properly disputing penalties
regarding that assessment are not eligible.
Amnesty. If a taxpayer
pays the full amount of tax and interest as shown on the Tax Amnesty
Notice, the Commissioner is authorized to waive all unpaid penalties
and the interest directly attributable to those penalties for those
imposed for failure to timely file a return; failure to file a proper
return; failure to timely pay a tax liability; failure to file,
report or pay electronically; and failure to pay the proper amount
of any estimated tax payment for such period. When an eligible taxpayer
pays the full outstanding balance of tax and interest with respect
to previously filed returns or assessments, the Commissioner will
waive the unpaid penalties as to that taxpayer for those tax periods.
Penalties that have been assessed or that could be assessed by the
Commissioner against a taxpayer for liabilities relating to any
other tax types are not eligible for waiver under the amnesty program.
Amnesty payment and penalty. Required
payments must be received by 5:00 p.m. EDT, June 1, 2010. If a payment
is delivered by U.S. mail or a recognized commercial delivery service,
payment will be considered timely if the date of postmark is on
or before June 1, 2010 even if the mail is delivered after such
date. If an eligible taxpayer fails to make a full payment of all
tax and interest due under the amnesty program for each tax period
for which the taxpayer receives a bill, the Commissioner may impose
an additional amnesty penalty of up to $500 per taxpayer, to be
added to and become part of the outstanding balance due.
The President recently signed into law the “Hiring Incentives
to Restore Employment Act of 2010” (the HIRE Act, P. L. 111-47,
03/18/2010). The centerpiece of this Act is a payroll tax holiday
and up-to-$1,000 tax credit for businesses that hire unemployed
workers. In addition to these new hiring incentives, the HIRE Act
also includes a one-year extension of the enhanced small business
expensing option under Code
Sec. 179 . Both of these provisions are extremely important
to many businesses.
Payroll tax holiday and up-to-$1,000 credit for employers who hire
unemployed workers. To help stimulate the hiring of workers by the
private sector, the new law exempts any private-sector employer
that hires a worker who had been unemployed for at least 60 days
from having to pay the employer's 6.2% share of the Social Security
payroll tax on that employee for the remainder of 2010. A company
could save a maximum of $6,621 if it hired an unemployed worker
and paid that worker at least $106,800—the maximum amount
of wages subject to Social Security taxes—by the end of the
year. As an additional incentive, for any qualifying worker hired
under this initiative that the employer keeps on payroll for a continuous
52 weeks, the employer is eligible for an additional non-refundable
tax credit of up to $1,000 after the 52-week threshold is reached,
to be taken on their 2011 tax return. In order to be eligible, the
employee's pay in the second 26-week period must be at least 80%
of the pay in the first 26-week period.
Workers hired after the date of introduction of the legislation
(Feb. 3, 2010) are eligible for the payroll tax forgiveness and
the retention bonus, but only wages paid after March 18 receive
the exemption for payroll taxes. Some additional features of the
new hiring incentive include:
- The tax benefit of the new incentive is immediate. It puts money
into a business' cash flow immediately, since the tax is simply
not collected in the first place.
- The tax benefit generally applies only to private-sector employment,
including nonprofit organizations—public sector jobs are
generally not eligible for either benefit. However, employment
by a public higher education institution qualifies.
- There is no minimum weekly number of hours that the new employee
must work for the employer to be eligible, and there is no limit
on the dollar amount of payroll taxes per employer that may be
- For workers that would otherwise be eligible for the Work Opportunity
Tax Credit (i.e., another type of employment tax credit), the
employer must select one benefit or the other for 2010. There
is no double dipping.
- An employer can't claim the new tax breaks for hiring family
- A worker who replaces another employee who performed the same
job for the employer isn't eligible for the benefit, unless the
prior employee left the job voluntarily or for cause.
- For the hiring to qualify, the new hire must sign an affidavit,
under penalties of perjury, stating that he or she hasn't been
employed for more than 40 hours during the 60-day period ending
on the date the employment begins.
- The incentive isn't biased towards either low-wage or high-wage
workers. Under the measure, a business saves 6.2% on both a $40,000
worker and a $90,000 worker.
- The payroll tax holiday doesn't apply with respect to wages
paid during the first calendar quarter of 2010, but the amount
by which the Social Security payroll tax would have been reduced
under the payroll tax holiday provision during the fist calendar
quarter is applied against the tax imposed on the employer for
the second calendar quarter of 2010.
- The Act creates a similar new set of rules allowing a payroll
tax holiday for railroad retirement tax purposes.
- The credit for retaining qualifying new hires is the lesser
of $1,000 or 6.2% of the wages paid by the taxpayer to the retained
worker during the 52-consecutive-week period. Thus, the credit
for a retained worker will be $1,000 if, disregarding rounding,
the retained worker's wages during the 52-consecutive-week period
exceed $16,129.03. However, the credit isn't available for pay
not treated as wages under the Code (e.g., remuneration paid to
Extension of enhanced small business expensing. The new law gives
a one-year lease on life to enhanced expensing rules, which allow
qualifying businesses the option to currently deduct the cost of
business machinery and equipment, instead of recovering it via depreciation
over a number of years. For tax years beginning in 2010, the maximum
amount that a business may expense is $250,000, and the expensing
election begins to phase out when a business buys more than $800,000
of expensing-eligible assets. These dollar limits are the same as
those that were in effect for 2008 and 2009. Had the HIRE Recovery
Act not been passed and signed into law, these dollar limits would
have dropped this year to $134,000 and $530,000 respectively.
Congratulations to Mariana Ambrosio for marking her 15th year with
On Nov. 6, President Obama signed H.R. 3548, the ''Worker, Homeownership,
and Business Assistance Act of 2009'' (the Act) into law . The signing
came just one day after the House passed it and two days after the
Senate did. This Special Study highlights the tax changes for individuals
in the Act, namely changes extending and generally liberalizing
the first time homebuyer tax credit (FTHTC).
Homebuyer Credit Extended and Liberalized
A refundable tax credit is available for qualifying first-time
home purchases after Apr. 8, 2008, and before Dec. 1, 2009. For
homes bought in 2009, the maximum first time homebuyer tax credit
(FTHTC) is equal to the lesser of $8,000 ($4,000 for a married individual
filing separately) or 10% of the principal residence's purchase
price (for purchases before 2009, the dollar limits are $7,500 ($3,750
for marrieds filing separately). The FTHTC phases out for individual
taxpayers with modified adjusted gross income (AGI) between $75,000
and $95,000 ($150,000 and $170,000 for joint filers) for the year
An individual is treated as a first-time
homebuyer if he (and his spouse, if married) had no ownership interest
in a principal residence in the U.S. during the 3-year period before
the purchase of the home. A taxpayer who buys a qualifying residence
after Dec. 31, 2008, and before Dec. 1, 2009, may elect to be treated
as having bought the home on Dec. 31, 2008, so that he may claim
the credit on the 2008 income tax return. No District of Columbia
first-time homebuyer credit may be claimed by any taxpayer for the
purchase of a residence after Dec. 31, 2008, and before Dec. 1,
2009, if the national first-time homebuyer credit is allowable to
the taxpayer (or his spouse) with respect to such purchase.
Recapture rules apply for homes bought
on or before Dec. 31, 2008. In general, the FTHTC is recaptured
ratably over fifteen years with no interest charge beginning in
the second tax year after the tax year in which the home is purchased.
For homes bought after Dec. 31, 2008, and before Dec. 1, 2009, the
FTHTC is recaptured only if the taxpayer disposes of the home (or
the home otherwise ceases to be the principal residence of the taxpayer)
within 36 months from the date of purchase.
New law. The Act extends the FTHTC and liberalizes it by making
it available to (1) higher-income taxpayers and (2) to existing
homeowners who are qualifying “long-time residents”
and who buy another principal residence. However, for the first
time there will be a dollar cap on residences qualifying for the
FTHTC extended. Under the Act, the FTHTC is extended to apply to
a principal residence purchased by the taxpayer before May 1, 2010.
The FTHTC also applies to the purchase of a principal residence
before July 1, 2010 by any taxpayer who enters into a written binding
contract before May 1, 2010, to close on the purchase of a principal
residence before July 1, 2010.
For purchases after Nov. 6, 2009 (the enactment date), the FTHTC
phases out for individual taxpayers with modified adjusted gross
income (AGI) between $125,000 and $145,000 ($225,000 and $245,000
for joint filers) for the year of purchase.
FTHTC available for existing homeowners who are “long-time
residents.” For purchases after Nov. 6, 2009, any individual
(and, if married, the individual's spouse) who has maintained the
same principal residence for any 5-consecutive year period during
the 8-year period ending on the date of the purchase of a subsequent
principal residence is treated for FTHTC purposes as a first-time
homebuyer of that subsequent principal residence. The maximum allowable
credit for such taxpayers is the lesser of: (1) $6,500 ($3,250 for
a married individual filing separately); or (2) 10% of the purchase
price of the subsequent principal residence.
This month marks 10 years Elizabeth Amaral has been with the firm.
Sarah Carr has completed four years of service with the firm.
W are pleased to announce that the firm has successfully completed
another Peer Review and has received the highest report available
( a clean opinion with no modifications).
Welcome back to Stephanie B , who rejoins the firm after a 10 year
The firm is beginning its 18th year of providing services to the
Welcome to the HG Group of Dunkin Donut Companies as clients to
the firm. The HG Group currently owns and operates 24 Dunkin Donuts
Franchises in New England
Welcome to Aurelia who has joined our firm to assist in many phases
of data entry as well as general office duties.
The firm is beginning its seventeenth year of providing services
to the franchisee community.
James P. Ventriglia addressed the DDIFO and gave the treasurers
report at the meeting. Jim was stepping in for Robert Zweiner, the
Congratulations to DDIFO and their new web site at ddifo.org We
are pleased that another client of the firm , Wickford Web Works,
was able to assist DDIFO on their new site.
Congratulations to Joe D ( client for 15+ years) and Fatima ( client
for 1 year) on their wedding. Wishes for many years of happiness.
Congratulations to Al Capraro on his
retirement. As a professional in the Dunkin Donuts Community I can
appreciate his years of service as President of DDIFO. Mark
Dubinsky , a former multi unit franchisee, has been appointed President
effective September 1st.
This month marks seven years Elizabeth
Am aral has been with the firm. Thank you for the years of hard
We are pleased to announce we assisted a client in obtaining approximately
$ 2.5 million in financing to acquire real estate as well as consolidate
The firm is pleased to begin its sixteenth year of client service.
A special Thank you to all clients and friends that have supported
us over the years.
Congratulations to Sumner Steinberg upon his retirement. Sumner
had been a Dunkin Donuts franchisee for in excess of 40 years.
Welcome to MVD Donuts Inc a
new client of the firm that operates several Dunkin' Donut franchises
in New Hampshire.
Welcome also to tax clients Silviera Masonry and Better Homes Mortgage
We are pleased to add the Vermont CPL to our client list. The Group
of franchise owners will be constructing a kitchen to service 35
Dunkin Donut retail outlets.
We are pleased to announce that Sarah Carr has joined the firm
to assist in the Franchise work as well as administratively.
James P. Ventriglia has been appointed treasurer of the Cranston
Chamber of Commerce effective
Our client, the Ocean State CPL has officially opened and is serving
an initial round of 44 Dunkin nut locations. Over the next few
months they will be adding locations until they service the entire
126 locations participating.
Welcome to F&C Donuts Inc, a new client of the firm.
The firm has successfully completed its Peer Review and received
the best report possible with NO suggestions for improvement. FYI
a Peer Review is when another CPA selects several engagements and
reviews the related financial statements for to insure they comply
with current ounting and disclosure requirements. They also review
selected work papers to make sure an appropriate amount of work
was done on the engagement.We are proud of this achievement.
We are pleased to announce that on April 28th we will be having
a representative of Radiant Systems here to give a demonstration
of their new register product. Please email us at email@example.com
if you would like to attend this seminar.
The firm was pleased to be selected to oversee the enrollment of
the new members to the Ocean State CPL In a two day period we had
over 40 Dunkin Donuts join the CPL.
Welcome to the DDIFO ( Dunkin' Donuts Independent Franchise Owners
Organization) who has become a client of the firm.
We are beginning to plan for our next franchisee seminar in the
late May or early June timeframe. In the event that you have any
topics you would like to have addressed feel free to send
your e-mail to me ( firstname.lastname@example.org) and we will do our best to
arrange the appropriate speakers.
Due Date for Corporate Income tax returns is March 15th Be
aware that the State of Rhode Island has changed the way that they
treat the taxation of out of state owners of LLC's , Partnerships
and S-Corporations. Beginning with the 2004 Returns the entities
are required to make the tax payments on behalf of their out of
state partners/ shareholder/ member. This computation must be made
on an entity by entity basis and there are currently no provisions
allowing the netting of entities with a loss against those with
Welcome to the firm to new clients Attorney Stephen Germani, Mardovar
Networking and Dr. Launer. We will strive to exceed your expectations.
We would like to thank the group from Infotrove ( a Massachusetts
business technology company) for speaking at our first Franchisee
Information Seminar .
We look forward to presenting additional topics that are of interest
to the franchisees at large.
January 1, 2005
We would like to welcome the following
NEW clients to the firm :
- Mystic Foods , a multi unit franchisee
- The Tetreault Group - a multi unit Dunkin Donuts Operator
- The Ocean State CPL - A central production facility of Dunkin
Donuts designed to service 150 units located in the state of Rhode
Island. The Center is expected to Open in May of 2005
Special thanks to the group at ADJ Donuts Inc. for assembling a
special "Dunkin' Donuts Care package" for Cpt. Stephen Fabiano when
he took command of the Delta Company 701st Main Support Battalion
in Iraq. All 225 soldiers enjoyed that great Dunkin coffee. Hopefully
they all will be home soon to enjoy the Dunkin Donuts coffee on
a regular basis...We at JPV CPA were happy to assist in this project...THANK
YOU ADJ !!!!
We are pleased to announce that growth has caused us to acquire
the entire second floor of our building, in effect doubling our
office space . We are in the process of adding new personnel to
meet this growth.
In October two pieces of tax legislation were passed by Congress
and signed by the President. They were the Working Families Tax
Relief Act of 2004 and the American Jobs Creation Act of 2004. Summaries
of the major items of each bill follows. This is not intended to
be a full explanation of the bills. We encourage you to call your
tax advisor with any questions on how these bills effect you.
Working Families Tax Relief Act of 2004
- Relief to Individual Alternative Minimum Tax
- Child Tax Credit of $ 1,000 retained
- Teaches expense deduction for out of pocket expenses retained
American Jobs Creation Act of 2004
- S Corporation rules eased- Increases numbers of shareholders
to 100, certain family members treated as one shareholder
- Charitable deductions tightened up for contributions of a car,
boat or airplane made after December 31,2004. After that date
you may no longer use the "Blue Book" to determine the value of
the gift. The charity must prepare and the taxpayer must attach
to their return a statement identifying the vehicle and the amount
for which it was sold.
- Sales tax deduction available instead of deducting state income
- Expensing of SUV's with a gross vehicle weight of less than
6,000 pounds reduced to $ 25,000 for acquisitions made after October
- 15 year depreciation created for qualified leasehold improvements
of a qualified restaurant property
- Certain Start Up expenses incurred after October 22,2004 can
be immediately written off, up to $ 5,000 instead of expensing
over a five year period.