Newsletter Vol. 1, Issue 1

For January 2007

January 16 Final 2006 individual estimated tax payment is due, unless 2006 tax return is filed and taxes are paid in full by January 31, 2007.

January 31 Employers must provide 2006 W-2 statements to employees.

January 31 Payors must provide 2006 Form 1099s to payees.

January 31 Employers must generally file Form 941 for the fourth quarter of 2006 and pay any tax due.

January 31 Employers must generally file 2006 federal unemployment tax returns and pay any tax due.

NOTE: Businesses are required to make federal tax deposits on dates determined by various factors that differ from business to business.

For more information on tax deadlines that apply to your business, contact Craft, Noble & Company.

Think about elusive business tax deductions. Finding one of these deductions might give you real tax savings.

Where do you start? First, think about what you use in your daily work life. Are you taking full advantage of the home office deduction rules? If you use a portion of your home exclusively and regularly as your principal place of business, you might qualify. Similarly, the business use of your personal vehicle can be deducted. While keeping track of business miles can be tedious, it can be worth the effort come tax time.

Deductions you might not have thought of include the business use of a personal cell phone and the business portion of your monthly Internet access fee. Qualifying meals and entertainment expenses are also deductible, including the cost of entertaining at home — just as long as there is a legitimate business purpose.

Document your business expenses. Knowing how an expense is deducted is also important. Some expenditures are only partially deductible as itemized deductions, but may be fully deductible against self-employment income. Examples include legal bills, tax return preparation fees, and work-related publications. A word of caution: business expenses must be fully documented. Proper accounting records are essential to take advantage of these write-offs.

Self-employed taxpayers should also remember that 100% of health insurance premiums paid for themselves and their families can generally be deducted from their business income.

Call Craft, Noble & Company for a year-end review to help you find those tax deductions you might otherwise miss.

The IRS has issued the 2007 standard mileage rate that businesses can use to calculate the deductible costs of driving an automobile for business.

Beginning January 1, 2007, the standard mileage rate for business driving will be 48.5 cents a mile. This represents an increase in the mileage rate from the 44.5 cents a mile allowed in 2006. The rate increase is due to higher vehicle and fuel prices for the year ending October 2006.

If you have questions about deducting vehicle expenses in your business, give Craft, Noble & Company a call.

After losing several court challenges to charging an excise tax on long-distance telephone service, the IRS is no longer assessing the tax. In May of 2006, the IRS announced that it would refund the tax paid by individuals, businesses, and tax-exempt organizations during the 41 months from March 2003 through July 2006.

Individuals can claim their refunds by calculating the actual tax they paid, or they can take a standard refund amount based on the number of personal exemptions they claim on their 2006 tax returns.

The IRS has also provided businesses and tax-exempt organizations with a formula to estimate the amount of refund to which they’re entitled. The formula can be used by those who don’t want the bother of going through 41 months of phone bills to calculate the exact taxes paid.

To claim their refunds, businesses (including sole proprietors, corporations, and partnerships) and tax-exempts are to complete Form 8913 (Credit for Federal Telephone Excise Tax Paid) and attach the form to their regular 2006 income tax return or, in the case of tax-exempt organizations, to Form 990-T. The form allows taxpayers to either claim the actual amount of refundable long-distance telephone excise taxes paid during the 41-month period or to use the IRS simplified formula to figure the refund.

Businesses are cheated out of millions of dollars every year with invoices for goods or services that were never delivered. Phony invoices once paid often will be followed by additional billings for publications, services, or supplies not delivered. Such schemes are successful because many businesses have slipshod procedures for approving and paying bills.
Here are some techniques that should reduce the chances that your company will fall prey to a billing scam.

* Inform your staff that they are never to give equipment model or serial numbers to callers. If the vendor is legitimate, he will already have the necessary numbers.

* Payments should be made only when supporting documents, such as invoices, receiving reports, purchase orders, and packing slips, have been reviewed and approved.

* Always pay on the original invoice only; do not pay on copies or duplicates. Payments should not be made on monthly statements that can include prior-paid items. Also, monthly statements seldom have the detail necessary to determine legitimate charges.

* Mark on the face of the invoice the date of payment and the check number.

You might want to review your company’s purchasing and paying policies to make your company less of a target.

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	For January 2007 January 16 Final 2006 individual estimated tax payment is due, unless 2006 tax return is filed and taxes are paid in full by January 31, 2007. January 31 Employers must provide 2006 W-2 statements to employees. January 31 Payors must provide 2006 Form 1099s to payees. January 31 Employers must generally file Form 941 for the fourth quarter of 2006 and pay any tax due. January 31 Employers must generally file 2006 federal unemployment tax returns and pay any tax due. NOTE: Businesses are required to make federal tax deposits on dates determined by various factors that differ from business to business. For more information on tax deadlines that apply to your business, contact Craft, Noble & Company. Think about elusive business tax deductions. Finding one of these deductions might give you real tax savings. Where do you start? First, think about what you use in your daily work life. Are you taking full advantage of the home office deduction rules? If you use a portion of your home exclusively and regularly as your principal place of business, you might qualify. Similarly, the business use of your personal vehicle can be deducted. While keeping track of business miles can be tedious, it can be worth the effort come tax time. Deductions you might not have thought of include the business use of a personal cell phone and the business portion of your monthly Internet access fee. Qualifying meals and entertainment expenses are also deductible, including the cost of entertaining at home — just as long as there is a legitimate business purpose. Document your business expenses. Knowing how an expense is deducted is also important. Some expenditures are only partially deductible as itemized deductions, but may be fully deductible against self-employment income. Examples include legal bills, tax return preparation fees, and work-related publications. A word of caution: business expenses must be fully documented. Proper accounting records are essential to take advantage of these write-offs. Self-employed taxpayers should also remember that 100% of health insurance premiums paid for themselves and their families can generally be deducted from their business income. Call Craft, Noble & Company for a year-end review to help you find those tax deductions you might otherwise miss. The IRS has issued the 2007 standard mileage rate that businesses can use to calculate the deductible costs of driving an automobile for business. Beginning January 1, 2007, the standard mileage rate for business driving will be 48.5 cents a mile. This represents an increase in the mileage rate from the 44.5 cents a mile allowed in 2006. The rate increase is due to higher vehicle and fuel prices for the year ending October 2006. If you have questions about deducting vehicle expenses in your business, give Craft, Noble & Company a call. After losing several court challenges to charging an excise tax on long-distance telephone service, the IRS is no longer assessing the tax. In May of 2006, the IRS announced that it would refund the tax paid by individuals, businesses, and tax-exempt organizations during the 41 months from March 2003 through July 2006. Individuals can claim their refunds by calculating the actual tax they paid, or they can take a standard refund amount based on the number of personal exemptions they claim on their 2006 tax returns. The IRS has also provided businesses and tax-exempt organizations with a formula to estimate the amount of refund to which they’re entitled. The formula can be used by those who don’t want the bother of going through 41 months of phone bills to calculate the exact taxes paid. To claim their refunds, businesses (including sole proprietors, corporations, and partnerships) and tax-exempts are to complete Form 8913 (Credit for Federal Telephone Excise Tax Paid) and attach the form to their regular 2006 income tax return or, in the case of tax-exempt organizations, to Form 990-T. The form allows taxpayers to either claim the actual amount of refundable long-distance telephone excise taxes paid during the 41-month period or to use the IRS simplified formula to figure the refund. Businesses are cheated out of millions of dollars every year with invoices for goods or services that were never delivered. Phony invoices once paid often will be followed by additional billings for publications, services, or supplies not delivered. Such schemes are successful because many businesses have slipshod procedures for approving and paying bills. Here are some techniques that should reduce the chances that your company will fall prey to a billing scam. * Inform your staff that they are never to give equipment model or serial numbers to callers. If the vendor is legitimate, he will already have the necessary numbers. * Payments should be made only when supporting documents, such as invoices, receiving reports, purchase orders, and packing slips, have been reviewed and approved. * Always pay on the original invoice only; do not pay on copies or duplicates. Payments should not be made on monthly statements that can include prior-paid items. Also, monthly statements seldom have the detail necessary to determine legitimate charges. * Mark on the face of the invoice the date of payment and the check number. You might want to review your company’s purchasing and paying policies to make your company less of a target. Top of Page \| Go to Page 1