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news & noteworthy  February 1, 2005

Alerts, Updates and Other Tax and Accounting Tidbits for Business and Home

 Presented electronically by Norman, Johnson & Co., PA Certified Public Accountants

 

What’s up with E-filing? The IRS wants everyone to file electronically if possible. It streamlines their process and saves them money. It helps taxpayers too.

*      If you are due a refund and use direct deposit, in most cases it will get your refund back in less than 2 weeks (sometimes less than a week). If you owe the IRS you can e-file your return and mail your check in later, by April 15th.

*      It assures that the IRS receives your return without the expense of certified mail or waiting at the post office. The transmitter receives an official confirmation of correctly received and accepted returns.

*      If you file manually someone has to key your return into the IRS computer and mistakes do happen. Sometime a number is transposed; sometime a whole page is missed. With e-file there is no manual keying of the return and thus no keying errors. It transmits directly into the computer.

Last filing season more than 60 million taxpayers filed electronically. Large or small, simple or complicated, most returns can now be electronically filed.

 

Spoofing is alive and well – You have probably read about if not received bogus e-mails that purport to be from some financial institution asking you to update or confirm your account information. Spoofing as it is called is generally accomplished by the scam e-mail linking you to an official looking but bogus internet site. Smith Barney, Citizens Bank, Citi Bank, Sun Trust Bank and many others have been targets of this scam. The latest entry is a scam of Pay Pal the popular internet payment system. Generally most companies do not send out update or confirming notices on the internet. If you receive one you should be suspicious and contact your company to confirm the reality of the notice.

 

Worthy Quote: “Things may come to those who wait, but only the things left by those who hustle.” – Abraham Lincoln (16th President, 1809-1865)

 

SC Corporate Tax News:

Ö        New and inactive corporations must file - Every corporation organized under the laws of South Carolina and every foreign corporation authorized to do business in this state are required to file a tax return even if no business was transacted during the income period.

Ö        Too little, too late – SC has established the Textiles Rehabilitation Credit effective June 30, 2004 whereby a taxpayer can receive a tax credit of 25% of the amount spent to rehabilitate a textile manufacturing facility.

Ö        Faster equipment write-offs – In May 2003 the IRS increased the amount of capital equipment that a company could expense in one year up to $100,000. SC did not adopt that change and remained limited to $25,000 per year. Effective with 2005 purchases SC has adopted the $100,000 expensing limit.

 

Accountant Speak – Accrual Basis. This is the method by which revenues are recorded when earned, and expenses are recorded when they are incurred, as opposed to a cash-basis method of accounting that measures revenue when cash is received and expenses when they are paid. The accrual method must be used for financial statements to be considered prepared according to Generally Accepted Accounting Principles (GAAP).

 

Notes from all over: Everybody’s doing it! – Two-thirds of all the people who have ever lived past age 65 in the entire history of the world are alive today!  34 years ago on February 5th, 1971 – Apollo 14, the third US manned Moon expedition landed. Alan Shepard & Edward Mitchell walked on Moon for 4 hours. Two years later Crocodile Rock by Reginald Kenneth Dwight hit No. 1. You may remember his knighted name, Sir Elton John.

 

Watching the Calendar – Super Bowl XXXIX is this coming Sunday, February 6th, time to purchase your chips and dip; Valentine’s Day is just 13 more days, remember your sweetie; Corporate tax returns are due March 15th (calendar year companies); and personal income tax returns are due in just 73 days!

 

Who’s that new girl? We welcome Anne Strange to our staff. Anne came to us from a CPA firm in Pennsylvania. She is a 2003 graduate of the University of Pittsburgh at Johnstown. How did she get to Spartanburg? She moved down to join her twin sister, a Sherman student. Anne’s primary responsibilities are tax and audit.

 

Got a friend or associate that needs help with accounting, taxes, or financial planning?  We appreciate your referrals. Invite your referral to call for a complimentary conference to review their situation.

 

Jim Norman and Gary Johnson

 

Norman, Johnson & Co., PA is a Spartanburg, SC based CPA firm which was founded in 1990.  The firm offers a wide range of audit, accounting, tax, business consulting, and financial planning services for individuals, businesses, governmental entities, and not-for-profit clients.

 

This newsletter is published monthly on the first of each month and alerts and special topics as they are deemed informative. Information contained in this newsletter is derived from sources believed to be accurate.  You should discuss any legal, tax, or financial matters with the appropriate professional before applying them to your specific situation. 

 

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Visit our website: Norman, Johnson & Co. CPAs can be found at http://www.normanjohnsoncpa.com/.

 

 

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