What is the best tax help that small business owners can get? The answer is simple, getting the right tax help.

A small business owner can get tax help by hiring a tax attorney, tax accountant or an expert tax preparer who specializes in small business. But a smart business owner can take things into their own hands and get additional tax help by investing in a small business tax reduction guide.

A tax reduction guide provides sole proprietors and small business owners the means to reduce tax liabilities by showing the tax reduction secrets available. It offers tax help and advice on things such as lawyer fees, filing fees, incorporation and choosing the right type of business entity.

Another benefit of a tax reduction guide is it gives the small business owner everything they need to start saving thousands of dollars by utilizing IRS approved tax reduction secrets. It also provides great tax tips on how to use the incorporation status as a huge tax break by showing every deduction you’re entitled to.

The right tax guide also shows you the biggest mistakes taxpayers make and how to make your income tax return audit-proof. Some tax reduction guides offer great tax tips by providing free phone consultations and a personalized financial check-up.

Investing in a small business tax reduction guide is a smart move, especially in this economy.

Are you still thinking about purchasing a new car even though you missed out on the Cash for Clunkers program? Well, there is still some good news - potential new car buyers can still claim a 2009 federal tax credit on newly purchased vehicles up until December 31, 2009.

The “money back for new vehicle purchases” deduction, through The American Recovery and Reinvestment Act of 2009, is not an itemized deduction, said Sue Hales, IRS spokesperson for Illinois.

“Everyone can take this deduction,” Hales explained. “Most deductions you have to itemize.”

WHAT VEHICLES QUALIFY FOR THE IRS AUTO TAX CREDIT PROGRAM?
The tax credit is available for the purchase of NEW cars, motorcycles and light trucks. 

HOW IS THE TAX CREDIT APPLIED?
The tax credit applies to taxes and fees paid on the first $49,500 of the car purchase.

WHO QUALIFIES FOR THE IRS AUTO TAX CREDIT PROGRAM?
Joint tax return filers with modified adjusted gross incomes of $260,000 or less
Individual tax return filers with modified adjusted gross incomes of $135,000 or less

With a few months left in 2009, taxpayers can take advantage of other federal tax credit incentives including:

• First-time homebuyer credit for people who purchase in 2009, up to $8,000
• Education benefits
• Enhanced tax credits for the tax years of 2009 and 2010, including new details to the additional child tax credit and earned income tax credit

For more information go visit irs.gov

 

source: Mt. Vernon Register-News, irs.gov

Are U.S. States unfairly burdening smokers by taxing cigarettes to cut budget deficits?  Historically, states have used part of the revenues from cigarette sales to help smokers quit or to pay for their health care. But now, many states are proposing an additional cigarette tax to bail them out of the fiscal crisis without earmarks to help people stop smoking.

Sure, smokers are an easy target. There is little political opposition and health advocacy groups consider it a bane to society.  But does it make it right? Are they being singled out?

In more than 20 states, budget shortfalls are pushing more to look to tobacco for revenue. Even the tobacco-producing states are considering it.

According to the New York Times, “in the South, where such taxes have been lower than in the rest of the country, Arkansas has nearly doubled its tax, to $1.15 a pack, and Kentucky’s will double, to 60 cents, on April 1.

Increases are also under consideration in other tobacco-growing states like North Carolina, South Carolina and Georgia. With estimated state budget shortfalls nearing $50 billion, opponents of smoking see an opportunity to make headway with the most reluctant lawmakers.

A 10 percent increase in the price of cigarettes reduces consumption by 3 percent to 5 percent, according to the Centers for Disease Control and Prevention, and deters young people from picking up the smoking habit.

Tobacco industry representatives have argued that tobacco taxes unfairly burden smokers, who are mostly working class or poor, and jeopardizes jobs at retailers like convenience stores, where more than 30 percent of total sales can come from cigarettes.

“Many of these states are asking the very definition of Main Street to bail out state capitals,” said Frank Lester, a spokesman for Reynolds American, which makes Camel and other major brands. “It’s just another bailout.”

States whose cigarette taxes are already high are also considering increases. In Oregon, now at $1.18 a pack, Gov. Theodore R. Kulongoski has proposed a 60-cent increase. In New Jersey, Gov. Jon Corzine is asking the Legislature for a 12.5-cent increase over the current $2.58. New York has the highest state tax on cigarettes, $2.75 a pack.

In Mississippi, cigarette tax increases in surrounding states have helped dampen fears that people would cross state lines to buy cigarettes. After a tax study commission appointed by Governor Barbour recommended an increase, he reversed his opposition but warned that the tax should be viewed as a matter of health policy, not a generator of revenue.

Bill Phelps, a spokesman for the Altria Group, the parent company of Philip Morris, argued that states often overestimated revenues from cigarette tax increases. From 2003 to 2007, there were 57 state tax increases, Mr. Phelps said, and in 41 cases they fell short of projections.

“We don’t think it makes a lot of sense to fund what are often important government programs with a revenue source that is in decline,” he said. “Just in the last 10 years, sales have declined an average 3 percent a year.”

But Frank J. Chaloupka, an economist and director of the Health Policy Center at the University of Illinois, Chicago, said cigarette taxes had not reached the threshold of diminishing returns. “We haven’t yet seen a case where if you raise taxes you don’t raise revenues,” Mr. Chaloupka said.

New Jersey did see a decline in revenue after its last tax increase, he said, but other factors, like a comprehensive smoke-free-air law that went into effect before the increase, drove down consumption.”

On top of all this, a 62-cent increase in the federal cigarette tax will go into effect in April.  The tobacco industry believes this will overburden smokers and drive down state collections. But the federal increase does not seem to have derailed state efforts, in part because smokers cannot avoid it by crossing state lines.

The debate will continue but the bottom line is that states will come down to the last day of the session, when they realize they have to get the budgets down and they need X dollars.”

What vice will be taxed next?  Beer, Wine, Liquor?

source: NY Times