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February 19, 2013
Over the Fiscal Cliff for Tax Savings (Part 1)

ARDMORE, Pa. — Package renews more than 50 temporary tax breaks through 2013

ARDMORE, Pa. — The so-called “fiscal cliff” tax package recently signed into law renewed more than 50 temporary tax breaks through 2013, saving individuals and businesses an estimated $76 billion. For the owners and operators of small- and medium-sized dry cleaning businesses, there is good news and bad news contained in the fiscal cliff tax laws.

First, the good news: greater certainty in taxes. The owners and operators of dry cleaning businesses have grown used to many longstanding tax breaks but they also have had to get used to the uncertainty of whether they will be renewed each year.

On the downside, in addition to a 3.8% Net Investment Income (NII) tax and a 0.9% Additional Medicare tax that, thanks to the Health Care and Education Reconciliation Act of 2010, began in 2013, many dry cleaners and laundry owners discovered they are subject to new taxes. Single individuals with incomes above the $400,000 level and married couples with income higher than $450,000 will pay more in taxes in 2013.

November 6, 2012
Calculating True Net Worth

CHICAGO — A precise knowledge of where you stand will help you make appropriate investment decisions

CHICAGO — As the old saying goes, “knowledge is power.” Arguably nowhere is this truer than in how you handle your money. Knowing your true net worth is an essential part of building and maintaining a sensible approach to your financial affairs.

A precise knowledge of where you stand will help you make appropriate investment decisions, demonstrate how to handle debt, plan your estate, and other important financial matters. Equally important is the psychological comfort that comes with knowing where you really stand on the financial landscape.

At first glance, calculating your net worth may look like a quick and easy task; just add up all of your assets, subtract your liabilities, and you have it. But calculating true net worth is a bit more complicated than that. Among the easiest things to overlook when calculating liabilities are the costs associated with such things as real estate brokerage commissions and taxes resulting from liquidating certain assets such as 401(k) plans.

November 16, 2011
IRS Launches Voluntary Worker Reclassification Program

WASHINGTON — The Internal Revenue Service (IRS) has launched a program that will enable many employers to resolve past worker classification issues and achieve certainty under the tax law at a low cost by voluntarily reclassifying their workers.

This new program will allow employers the opportunity to get into compliance by making a minimal payment covering past payroll tax obligations rather than waiting for an IRS audit.

The new Voluntary Classification Settlement Program (VCSP) is designed to increase tax compliance and reduce burden for employers by providing greater certainty for employers, workers and the government. Under the program, eligible employers can obtain substantial relief from federal payroll taxes they may have owed for the past, if they prospectively treat workers as employees.

The VCSP is available to many businesses that erroneously treat their workers as non-employees or independent contractors, and now want to correctly treat these workers as employees.

To be eligible, an applicant must:

October 20, 2011
An SUV in Every Parking Lot

WASHINGTON — In the past, generous tax breaks for gas-consuming heavy SUVs often raised the ire of Congress. However, last December’s Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 actually made tax breaks for these assets even more generous. Although probably unintended, the limited-time 100% “bonus” depreciation allowance includes a new, heavy SUV purchased and used for business.

That’s right, the entire purchase price can be written off in the placed-in-service year. A dry cleaning business that buys and places in service a new heavy SUV—those built on a truck chassis and rated at more than 6,000 pounds gross (loaded) vehicle weight—after Sept. 8, 2010, and before Jan. 1, 2012, and uses it 100% for business, may write off its entire cost in the placed-in-service year. There is no specific rule barring this result.

October 18, 2011
Deductions: Get ‘Em While You Can (Part 1 of 2)

ARDMORE, Pa. — Thanks to the 100% “bonus” depreciation write-offs created by the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, many dry cleaning businesses are discovering that capital investments in equipment, machinery and other business assets are more affordable today than ever before. Remember, however, the 100% bonus depreciation write-off is available only for qualifying purchases made by dry cleaning plants and businesses in 2011.

Those dry cleaners that have hesitated or postponed making capital investments because of the recent economic downturn might now want to consider how the combined use of incentives and the 100% bonus depreciation can substantially reduce the cost of capital investments. Even funding those new-equipment purchases is easier—at least for a while.

March 10, 2010
Payroll Penalties

With local, state and federal governments suffering the effects of the economic downturn, it should come as no surprise to anyone in the industry that tax laws will be subject to stricter enforcement to shore up plummeting revenues. What might come as a surprise is just how far the tax collector’s reach can extend, however.

April 21, 2008
Stimulus Package Extends to Small Businesses

WASHINGTON, D.C. — The economic stimulus package that will soon issue more than 130 million consumers tax rebates of $600 to $1,200 will also offer small businesses incentives to buy new equipment.

The government’s approved package includes two provisions aimed at helping small businesses increase capital spending: a huge increase in the Section 179 tax deduction and a bonus depreciation allowance.