Aldridge & Associates LLC
Aggressive, Accurate, Trustworthy

Vision & Mission

News & Updates

Dear Client

The tax laws enacted in the last couple of years contain important income tax and information reporting provisions that are effective for the first time in 2011.

To inform you of what's new in the tax rules, here's a summary of the key tax changes for 2011, broken down into three categories: Personal Income Taxes, Retirement Plan Changes, and Tax Changes for Businesses and Investors.

Below is a listing of changes to both personal and business related tax codes.

Click on any topic to see more detail.

If you'd like to discuss how these changes affect your personal, business or investment situation, please give us a call at (480) 275-8361.

Sincerely, Don Aldridge

Personal Income Taxes Changes

Payroll tax holiday in place

Employees will pay only 4.2% (instead of the usual 6.2%) OASDI (Social Security) tax on compensation received during 2011 up to $106,800 (the wage base for 2011). (Click to see details)

Stricter rules apply to energy saving home improvements

You can claim a tax credit for energy saving home improvements you make this year, but stricter rules apply for 2011 than for 2010. You can only claim a 10% credit for qualified energy property placed in service in 2011 up to a $500 lifetime limit (with no more than $200 from windows and skylights). (Click to see details)

Partial annuitization of annuity contracts

When you receive non-retirement-plan annuity payments from an annuity contract, part of each payment is a tax-free recovery of your basis (cost of the annuity contract for tax purposes), and part is a taxable distribution of earnings. (Click to see details)

Restricted definition of medicine for health plan reimbursements

Beginning this year, the cost of over-the-counter medicines can't be reimbursed with excludible income through a health flexible spending arrangement (FSA), health reimbursement account (HRA), health savings account (HSA), or Archer MSA (medical savings account), unless the medicine is prescribed by a doctor or is insulin. (Click to see details)

Retirement Plan Changes

Small employers may establish “simple cafeteria plans.

For years beginning after Dec. 31, 2010, small employers (those having an average of 100 or fewer employees on business days during either of the two preceding years) may provide employees with a “simple cafeteria plan.” (Click to see details)

Election to treat January 2011 charitable distributions as made in 2010

If you are age 70 1/2 or older, you can make tax-free distributions to a charity from an Individual Retirement Account (IRA) of up to $100,000. This applies for charitable IRA transfers made in tax years beginning before Jan. 1, 2012. (Click to see details)

Tax Changes for Businesses and Investors

Electronic filing rules now in place

Beginning Jan. 1, 2011, employers must use electronic funds transfer (EFT) to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). Forms 8109 and 8109-B, Federal Tax Deposit Coupon, cannot be used after Dec. 31, 2010.

Up-to-$1,000 credit for “retained workers” in 2011

Employers may claim a “retention credit” for retaining qualifying new employees (certain formerly unemployed workers meeting specific requirements). The amount of the credit is the lesser of $1,000 or 6.2% of wages you pay to the retained qualified employee during a 52 consecutive week period. (Click to see details)

New basis and character reporting rules

Generally effective on Jan. 1, 2011, every broker required to file an information return reporting the gross proceeds of a “covered security” such as corporate stock must include in the return the customer's adjusted basis in the security and whether any gain or loss with respect to the security is short-term or long-term. (Click to see details)

Corporate actions that affect stock basis must be reported

Effective Jan. 1, 2011, issuers of “specified securities” must file a return describing any organizational action (e.g., stock split, merger, or acquisition) that affects the basis of the specified security, the quantitative effect on the basis of that specified security, and any other information required by IRS. (Click to see details)

Reporting requirement for payment card and third-party payment transactions

After 2010, banks generally must file an information return with the IRS reporting the gross amount of credit and debit card payments a merchant receives during the year, along with the merchant's name, address, and TIN. Similar reporting is also required for third party network transactions (e.g., those facilitating online sales)

Information Reporting for Real Estate

For payments made after Dec. 31, 2010, for information reporting purposes, a person receiving rental income from real estate is treated as engaged in the trade or business of renting property. As a result, recipients of rental income from real estate generally are subject to the same information reporting requirements as taxpayers engaged in a trade or business. (Click to see details)

Aldridge Logo

MEMBER OF THE FOUNTAIN HILLS CHAMBER OF COMMERCE

11803 N Saguaro Blvd, Suite 14
Fountain Hills, AZ 85268
____________________________________________________________________________________

Accounting - Professional Income Tax Preparation - Assistance with IRS Letters
Tax Planning - Year Round Assistance - Bookkeeping Services

Preparing Financial Statements and Income Tax Returns Since 1980
Business. Partnerships, Corporations, Non-Profit Organizations, Rental Properties
Farm Income, 2009 Housing Credit, New Car Sales, Tax Deduction, Earned Income Credit
Child Tax Credit, Educational Credits, HSA's, Sale of Home, Amending Returns, Reporting for Short Sales
Foreclosures, Abandoned Properties plus All Other Schedules and Forms
Extensive experience in Accounting & Income Tax Preparation
___________________________________________________________________________________________________

Open 12 Months Every Year
We Complete Returns for Those Who've Filed for Extensions
Accounting and Bookkeeping Service
Support Involving IRS Issues

Staffed by professionals to insure the integrity of your financial records and reporting.

Free

Top Search Engine Optimization Companies