Welcome to Money Tips!
A publication of Johnson Financial Services

IT'S TIME! Only 43 days left (for individuals and partnerships) to file your taxes. Corporations - you have until March 15th. If you need a checklist to help you gather the necessary information for your taxes, please visit our website at www.JFSMONEY.com/valuableinfo and download or print the list. As always, please feel free to contact us with any questions and to schedule your appointment / conference call.

New Withholding Tables
The IRS has released the new withholding tables for the remainder of 2009 to reflect the benefits of the Making Work Pay credit. They are encouraging businesses to start using the tables as soon as possible, but not later than April 1, 2009.

The IRS News Release 2009-013 also advised taxpayers that those with multiple jobs may want to submit revised Forms W4 with their employers if they need to have more withholding to cover their combined income taxes.

The withholding tables have been adjusted based on the taxpayers’ marital status on the Form W4 they have filed with their employers.

A quick check of the weekly withholdings for wages of $300, $600, and $1,000 shows that if the employer uses the new tables:

• Taxpayers with SINGLE marked on their Form W4 will have $9-10 less Federal withholding each paycheck.
• Taxpayers with MARRIED marked on their Forms W4 will have $15-16 less Federal withholding each paycheck.

The biweekly tables show double these amounts.

CAUTION: Since the tables for withholding are based on the taxpayer’s marital status as shown on the Form W4 filed with the employer, the lower withholding may mean taxpayers could end up owing at the end of the year.

For example, a married couple who both use MARRIED on their W4 will each have $800 of less withholding during the rest of the year ($1,600 combined), when their credit on the 2009 return will only be $800 total. This will result in a lower refund by the extra $800, which could turn their situation into a balance due. The reduced withholding may also leave some taxpayers shy of their required withholding when it comes to the underpayment penalty (Form 2210) for 2009.

Another example would be a taxpayer who has two jobs would have $400 withholding from EACH job for a total less withholding of $800. The credit on the 2009 return will only be $400. This will result in a lower refund by the extra $400, which could turn the taxpayer’s situation into a balance due.

American Recovery and Reinvestment Act - for businesses
The following is a list of provisions that affect small businesses from the recent Economic Stimulus bill signed by the President last month:

SECTION 179 EXPENSING The Section 179 expensing level for tax years starting in 2008 remains for tax years starting in 2009. Thus the $250,000 limit and the $800,000 over all costs before phase-out will exist for one more year.

BONUS DEPRECIATION The 50% bonus depreciation for calendar year 2008 remains for calendar year 2009. A change permits taxpayers to elect to increase the research credit or AMT credit limitation by the bonus depreciation with respect to certain properties.

NET OPERATING LOSSES An eligible small business can elect to increase the carryback period for an NOL from the normal two years to three, four, or five (taxpayer’s choice). An eligible small business is a taxpayer meeting a $15,000,000 gross receipts test. This applies to NOLs created in any taxable year ending in 2008, or if elected by the taxpayer the NOL for any taxable year beginning in 2008. This election to carryback an NOL to the 3, 4, or 5 years, applies to each taxpayer only once (i.e., it cannot be applied for a fiscal year ENDING in 2008 and another fiscal year BEGINNING in 2008).

A taxpayer with an NOL in a taxable year ending prior to February 17, 2009 can:

1. Revoke any election to waive (forego) the carryback period if the revocation is made before April 18, 2009.
2. Increase the NOL carryback period providing the election is made before April 18, 2009.

NEW Service offered by JFS
We are offering an additional service this year – Strategic Cash Flow Analysis. This service provides you help in determining your financial priorities and goals. We will show you how to develop and maintain a plan to achieve your goals. If you are interested in this new service for your family’s financial security, please contact us for more information.

New Mileage Rates for the New Year
Effective January 1, 2009, mileage rates will increase.

• Business mileage will be $0.55;
• Medical and Moving mileage will be $0.24;
• Charitable mileage remains at $0.14.

Check out our contributions to the blog community
Don’t forget to check out the following websites for Lesley’s blogs:

• www.workingmother.com
• www.cwahm.com
• www.new.catholicmom.com
• www.motherandchildreunion.com
• www.businessmom.net

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Johnson Financial Services
phone: 816.289.0476
email: johnsonfinancialsvc.hotmail.com

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