Introducing the newest Medusa's Muse author

To contact us Click HERE
Right now I am preparing to edit a brand new manuscript from a brand new Medusa's Muse author. This is why I created a book publishing company: discovering new authors and fresh voices with a passionate story to tell. I've got my reading glasses on, my lap-top battery fully charged, a fresh cup of coffee, the manuscript opened in Word and "track changes" turned to "on." My muse is eagerly peering over my shoulder watching as I type notes inside the pages on my screen. Eventually she'll get a little bored; she finds editing tedious. But for now, she's just as fixated on this brand new Medusa's Muse book as I am.



The writer is Shannon Drury, author of The Radical Housewife. Click the link to explore her blog and get a taste of her writing. She's fabulous. A feminist housewife and mother living in Minnesota, and president of the Minnesota chapter of the National Organization for Women (NOW). Her story is exactly the type I look for. It's honest, funny, passionate, and the author doesn't quiet fit within any category. If she's a housewife, how can she call herself a feminist? She gets criticism from both conservatives and liberals, which means she's perfect for my Muse.

Of course, I'll get a lot more editing done if my daughter would leave me alone for more than 10 minutes at a time. 

It's Tax Time. Do you know where your receipts are?

To contact us Click HERE
The H and R Block office has reopened and there are signs all over town announcing deals on tax preparation. That can mean only one thing: it's tax time. The wonderful time of year when we all whimper at the pile of paperwork and forms demanding our immediate attention, realizing we've lost most of our receipts, and we have no idea if we got all of our 1099's and W2's from everyone we worked for. 


This is also an excellent time of year to crack open that expensive bottle of scotch Uncle Jo gave us for Christmas.


When I was writing What You Need to Know to Be a Pro, I decided not to include a chapter about taxes because the tax code changes all the time. There is plenty of info throughout the book about keeping track of expenses in preparation of tax season, but I skipped specific info about filing.  Instead, I research taxes every year and post my findings on this blog.


First, I found this video on ehow. It's more about keeping track of deductions rather than forms, but she explains receipts very well. The presenter in the video has a whole series about Freelance Writing.

Taxes & Being a Freelance Writer —powered by eHow.com

And here are a few articles I found this morning.  Click the links to read the full article.


Writing.org  Taxes for Freelancers

Did you earn your first income from freelancing last year? If so, you're in for a new adventure: calculating your income and Social Security taxes as a self-employed person.
The basic principle of paying freelance taxes is simple: You add up your income, deduct your expenses, and transfer the net profit or loss to Line 12, "Business income (or loss)," on Form 1040.
Unfortunately, what's simple in principle can be complicated in practice. Here are a few guidelines to help you get started:



Tax Issues for Freelance Writers

Here are some tips and strategies for thinking about your taxes. There are special circumstances that apply to freelance writers and other independent professionals, so I will highlight what you need to know to prepare your taxes.

Being self-employed is quite possibly one of the best tax strategies available today. Unlike being an employee, freelancers are in full control of their financial and tax situation. But independence also comes at a cost. Independent contractors face higher taxes and more record keeping duties than employees.


I really like this next article, written by a freelance writer and business expert.


Blue Inkwell Taxes for the Freelance Writer 

Setting up shop as a freelance is easy enough. Unfortunately, most novices don’t think about the tax implications of what they’re doing until their first tax season rolls around. Then the questions pour out.

What do I have to claim?How do I deal with 1099s?What classifies as a deduction?Am I supposed to pay quarterly taxes?


I'll keep researching the tax code for 2011 and post what I find here. If you have any helpful articles, post the link in comments.


And good luck with the receipt hunt. Check your car. I found lots of Medusa receipts in mine.

Form W-2 When 100% of Pastor's Pay is Designated as Housing Allowance

To contact us Click HERE
Question:

A minister currently receives only a housing allowance from his church. Are these amounts reportable on Form 1099-MISC or Form W-2?

Answer:

The answer to this blog post can be found in a February 3, 2009 blog post:
http://ministrycpa.blogspot.com/2009/02/form-w-2-when-100-of-pastors-pay-is.html

While it is true that this blog post is several years old, the information contained within the post is still accurate and relevant today.

MinistryCPA Special Topic: QuickBooks Year-End Giving Statements

To contact us Click HERE
Quickbooks Pro and QuickBooks Premier are great tools in helping churches stay on top of their finances. However, one setback with this software is that it does not come with a pre-installed year-end donor contribution report feature. A church which uses QuickBooks has two options, then, to prepare these statements:

• Install an add-on to QuickBooks which will accomplish this task.
• Use a separate, outside program to track donor giving.

MinistryCPA is currently aware of two add-on programs for donor reports:

• Donor Statements from Big Red Consulting: http://bigredconsulting.com/products/donor-statements-for-quickbooks/
• Donor Letters and Sales Receipts from Beyond the Ledger: http://www.beyondtheledgers.com/index.htm

We tested both of these add-on features (they each have a free trialversion). Microsoft Excel is needed to run both of them. From our tests, theDonor Statements from Big Red had better usability, seemed toprovide better support, and allowed for better customization as well.

If a church or non-profit organization chooses to purchase QuickBooks with an add-on, it must make sureto read the add-on instructions thoroughly to understand data input requirements in order for QuickBooks to prepare year-end statements.

Fringe Benefit to Teachers of Christian Schools: Children's Education

To contact us Click HERE
Question:

A church has a school affiliated with it and part of the compensationfor the teachers is free tuition for their children. Is this a taxable fringebenefit? If yes, is the school required to pay FICA tax on the value of the tuition?

Answer:

According to the IRS's Taxable Fringe Benefit Guide,

"Free or reduced tuition for employees of educational institutions may be excludable to employees. The term "qualified tuition reduction" means a tax-free reduction in tuition provided by an eligible educational institution. At the undergraduate level, the education need not be at the same institution where the employee works. Whether a tuition reduction is a qualified tuition reduction, and therefore excludable from income, depends on whether it is for education below or at the graduate level. The qualified tuition reduction must not represent payment for services." (An important point that we will address below).

Further, "a qualified educational organization is one which:

• Maintains a faculty and curriculum, and
• Normally has a regularly enrolled student body on site."

Schools must assure that tuition benefits are provided on a non-discriminatory basis, in addition to and not as a substitute for standard compensation for their services.

According to the IRS, "generally, a qualified tuition reduction cannot discriminate in favor of highly-compensated employees (for 2012, employees with total compensation exceeding $115,000)."

Also, "a fringe benefit is a form of pay (including property, services, cash or cash equivalent) in addition to (ouremphasis) stated pay for the performance of services."

Should a school provide tuition-free education as the only source of compensation for services or as a benefit on a discriminatory basis, it will be in violation of IRS rules unless it treats the fair market value as both income taxable and FICA tax wages.

Update of the Driscolls' Two Houses

To contact us Click HERE
On February 8th, the 11th Circuit Court of Appeals slammed the door on the ability to use housing allowances for multiple homes. In a short but definitive ruling, the court states, in essence, that "a" means "one" and that it should not be construed to be able to mean "more than one". The court relies on the consistent use of the term "home" as holding a singular connotation within the statute. Therefore, if a minister was planning on utilizing his or her housing allowance for more than one "home", it is time to make the appropriate adjustments to the 2012 tax estimates.

What's New for 2009

To contact us Click HERE
This article contains information that effects your 2009 tax return.

Tax Break for New Car Purchases in 2009
Taxpayers who buy a new passenger vehicle in 2009 (after Feb. 16, 2009, and before Jan. 1, 2010) may be entitled to deduct state and local sales and excise taxes paid on the purchase on their 2009 tax returns. Thus the taxpayers can buy now get cash back later on their tax returns. The deduction is limited to the state and local sales and excise taxes paid on up to $49,500 of the purchase price of a qualified new car, light truck, motor home or motorcycle which has a gross vehicle weight rating of not more than 8,500 lbs. The special deduction is available regardless of whether a taxpayer itemizes deductions on their return.

The amount of the deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers.

If you are claiming standard deduction, with your tax return complete schedule L (Form 1040). Check box 40b on Form 1040. The sales taxes, local taxes and excise duty paid on the new car appear as increase in the standard deduction. It you are itemizing your deductions, the new car deduction will appear on line 7 of schedule A (Form 1040). Complete the worksheet for line 7 on the back of schedule A (Form 1040).

First $2,400 of Unemployment Benefits Tax Free for 2009
The American Recovery and Reinvestment Act, which includes making every person who receives unemployment benefits during 2009 is eligible to exclude the first $2,400 of these benefits on their 2009 tax return. For a married couple, the exclusion applies to each spouse, separately. Thus, if both spouses receive unemployment benefits during 2009, each may exclude from income the first $2,400 of benefits they receive.

You must subtract $2,400 from the amount in box 1 of 1099-G and report it on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040-EZ. If married filing jointly, include any unemployment compensation received by your spouse that is more than $2,400.

Unemployed workers can choose to have income tax withheld from their unemployment benefit payments at a flat 10 percent. Unemployed workers who expect to receive more than $2,400 in benefits this year should consider having tax withheld from their benefit payments in excess of that amount.

First-Time Homebuyers Tax Credit
Under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home in 2009 before Dec. 1, 2009 receive up to $8,000, or $4,000 for married individuals filing separately. People can claim the credit either on their 2008 tax returns or on their 2009 tax returns. Read More...

Standard Deduction and Personal Exemption
Standard Deduction
Single ... $5,700 (add $1,400 for Blind/Elderly)
Married Filing Jointly ... $11,400 (add $1,100 for Blind/Elderly)
Head of Household ... $8,350 (add $1,400 for Blind/Elderly)
Married Filing Separately ... $5,700 (add $1,100 for Blind/Elderly)
Dependent ... Greater of $950 or sum of $300 and individual's earned income
Personal Exemption
$3,650

Temporary increase in the earned income tax credit (EITC) for taxpayers with three or more qualifying children
The American Recovery and Reinvestment Act (ARRA) provides a temporary increase in the earned income tax credit (EITC) for taxpayers with three or more qualifying children. The maximum EITC for this new category is $5,657. These changes apply to 2009 and 2010 tax returns.

The EITC credit begins to phase out at $21,420 for married taxpayers filing a joint return with children and completely phases out at $40,463 for one child, $45,295 for two children and $48,279 for three or more children. For married taxpayers filing a joint return with no children, the credit begins to phase out at $12,470 and completely phases out at $18,440.

Additional Child Tax Credit
Under ARRA more families will be eligible for the additional child tax credit, which is a refundable credit.

ARRA reduces the minimum earned income amount used to calculate the additional child tax credit to $3,000. Before ARRA, the minimum earned income amount was set to rise to $12,550. This change applies to tax years beginning in 2009 and 2010.

American Opportunity Credit for college education expenses
Under ARRA, the American Opportunity Credit modifies the existing Hope Credit for tax years 2009 and 2010, making the Hope Credit available to a broader range of taxpayers, including many with higher incomes and those who owe no tax. The credit can be claimed for four post-secondary education years instead of two, and it also adds required course materials to the list of qualifying expenses. The maximum annual credit is $2,500 per student. If you or your parents get the education credit, you cannot claim any type of education deduction.

The full credit is available to individuals whose modified adjusted gross income is $80,000 or less, or $160,000 or less for married couples filing a joint return. The credit is phased out for taxpayers with incomes above these levels. These income limits are higher than under the existing Hope and Lifetime Learning Credits.

If you choose to file as married filing separately you cannot take education credits, the deduction for student loan interest, or the tuition and fees deduction.

Homeowner's Energy Credit & Residential Energy Efficient Property Credit
Homeowner's energy credit is available for 2009 and 2010. The credit is thirty percent with a maximum of $1,500 for windows, doors, furnaces, water boilers, skylights, pellet stoves and insulation. Any credits received in previous years, do not effect this maximum credit amount.

For residential energy efficient property the credit is 30% of your costs of qualified property. Qualified properties include solar electric, solar water heating, fuel cell, small wind energy, and geothermal heat pump.

To take the credit, complete Form 5695 Residential Energy Credits. Enter the credit on line 52 of Form 1040 and check box c.

Making Work Pay and Government Retiree Credits
Taxpayers with earned income will get Making Work Pay credit. It is 6.2% of your earned income with a maximum of $400 ($800 if married filing jointly). You must file schedule M (Form 1040 or 1040A) to claim the credit. Include the credit on line 63 of Form 1040 or line 40 of Form 1040A. If you are filing Form 1040-EZ, include the credit on line 8 and do not file schedule M. Those with AGI of more than $95,000 ($190,000 if married filing jointly), nonresidents and dependents do not get this credit.

If you received a government pension or annuity in 2009, you may be able to take Government retiree credit. The credit is $250 ($500 if married filing joint return and both spouses received a qualifying pension or annuity). You can not take the credit if you received a $250 economic recovery payment during 2009. You must file schedule M (Form 1040 or 1040A) to claim the credit.

Cash for Clunkers
A $3,500 or $4,500 voucher or payment made for such a voucher under "cash for clunkers" (CARS) program to buy or lease a new fuel-efficient automobile is not taxable.

More Articles
Your Filing Status
1. Filing Status for Married
2. Head of Household
Exemptions for Dependents
1. Requirements for claiming a dependent
2. Child of separated or divorced parents
Filing Requirements
1. 2009 Filing Requirements
2. 2008 Filing Requirements
3. Filing Requirement for a Dependent
Your Income
1. W2 vs 1099-Misc: Employee vs Independent Contractor
2. Tax Filing by Self Employed Sole Proprietor or Independent Contractor
3. Partnerships
4. Filing W4 Employee’s Withholding Allowance Certificate
5. Missing W2, 1099-Misc, 1099-R, 1099-Int
Your Foreign Income
1. U.S. Citizen or Resident with Foreign Income
2. Foreign Bank and Financial Accounts
Income Exemptions and Deductions
1. Moving Expenses
2. Itemized deductions
3. Student Loan Interest Deductions
Income Adjustment
1. Traditional IRA and Roth IRA
2. Elective Deferrals 401(k) Plans
U.S. Gift tax and Inheritance Tax
1. The U.S. Gift Tax
2. Tax on Inheritances
Sale of Your Home
1. Profit from the Sale of Your Home
2. Foreclosure or Repossession of Main Home
3. First-Time Homebuyer Credit
State Tax Return
1. Working in Two or More States
Income Tax
1. My Tax Refund?

Complete List of Articles

OctroTalk - instant messaging, P2P file transfer, VoIP, SIP calling, live video chat and video conference for Nokia S60 3rd., Window Mobile Smartphone and Pocket PC and Windows Desktop. Free Download http://www.octro.com/