* Take another look

If your business or nonprofit organization might be eligible, perhaps you should take another look at the requirements and be sure you’re taking advantage of this tax break. If you qualify, you can use this tax credit to offset your federal income tax liability by up to 35% of the cost of health insurance premiums you pay for employees. Since this is a tax credit, not a deduction, it will reduce your tax bill dollar-for-dollar.

* Can your business qualify?

In general, the credit is available to employers that have fewer than 25 full-time equivalent (FTE) employees paying average annual wages of less than $50,000 per employee. Eligibility is based partially on FTEs, not the number of employees; therefore, an employer with fewer than 50 half-time workers could qualify for the credit. The maximum credit goes to those employers with ten or fewer employees who pay annual average wages of $25,000 or less.

When you’re self-employed, either as a partner or a sole proprietor, or if you own more than 2% of an S corporation, you’re not considered an employee for purposes of the credit.

Tax-exempt organizations can use the credit to offset payroll tax liability (up to 25% of qualified premiums paid).

For assistance in determining eligibility for this tax credit and in doing the calculations to obtain the credit, contact our office.

SECTION 179 maximum deduction decreases to $139,000, with a phase-out threshold of $560,000.

TRANSPORTATION FRINGE BENEFIT limit decreases to $125 for vehicle/transit passes and increases to $240 for qualified parking.

SOCIAL SECURITY taxable wage limit increases to $110,100. Retirees under full retirement age can earn up to $14,640 without losing benefits.

KIDDIE TAX threshold remains at $1,900 and applies up to age 19 (up to age 24 for full-time students).

NANNY TAX threshold increases to $1,800.

HSA CONTRIBUTION limit increases to $3,100 for individuals and to $6,250 for families. An additional $1,000 may be contributed by those 55 or older.

401(k) maximum salary deferral increases to $17,000 ($22,500 for 50 and older).

SIMPLE maximum salary deferral remains at $11,500 ($14,000 for 50 and older).

IRA contribution limit remains at $5,000 ($6,000 for 50 and older).

ESTATE TAX top rate remains at 35%, and the exemption amount increases to $5,120,000.

ANNUAL GIFT TAX EXCLUSION remains at $13,000.

ADOPTION TAX CREDIT decreases to $12,650 for adoption of an eligible child.

ALTERNATIVE MINIMUM TAX (AMT) exemption decreases to $33,750 for singles and to $45,000 for married couples.

The following suggestions will get you started on your financial review:

*  Hold a discussion with your family. Spouses and children need to share and prioritize their financial aspirations.

* Write down your financial goals. How much money will you need to meet each goal? When will you need the money, and how will you get it?

* Do a net worth statement (a list of your assets and debts), and compare it to last year’s statement. Are you gaining or losing ground?

* With your goals (and the effects of inflation) in mind, review the performance of your investments.

* Take steps to protect what you already have. Goals may become instantly unobtainable if you lose your present assets or your income potential.

* Do you have adequate disability insurance coverage to replace take-home pay if you become incapacitated?

* Do you have the proper amount of life insurance if you or your spouse should die?

* Do you have replacement value property insurance on your home?

* Do you have adequate insurance for calamities such as automobile accidents or lawsuits?

* Make sure that you need all of the insurance that you have. Do not duplicate employer-provided coverage. Review your coverage annually; do not just automatically renew policies.

* Review your will and your estate plan. Did your situation change during 2011 (marriage, divorce, births, deaths, move to another state, for example)? This year, the top estate tax rate is 35% with a $5,120,000 exemption. Make appropriate changes to your will and estate plan.

* Review your credit use. Keep your credit card bills current. If you’re finding that hard to do, it’s probably time to cut up some of those credit cards and get your debt under control.

* Organize your records. If you had trouble assembling data for your financial review, you need a better system. Set one up.

For help with any aspect of your review, call us. We’re here to assist you in any way we can.

Ralph is currently the President of Shinn Consulting CPA’s P.C. and President of Shinn Financial Group, a financial advisory services firm specializing in wealth management for small to medium-sized business clients and affluent individual investors.

Ralph has been in the public accounting and financial planning business since 1985 and is a licensed Certified Public Accountant, (CPA) and Certified Financial Planner (CFP). Ralph has also served as an on-call CFO for several of his business clients and has extensive experience in start-up companies including entity selection, business development, taxation strategies, and interfacing with other business partners including bankers, lawyers, and developers.

His other activities include evaluation of different financial instruments and negotiation in several business venture financing and real estate projects of which he has been an investor/partner. Ralph’s areas of expertise are Advanced Tax and Financial Planning for closely-held businesses and affluent individual clients, Retirement and Estate Planning Litigation Support, and Business consulting. He has extensive experience in Real Estate taxation, structuring of entities to protect personal assets of individuals and businesses as well as sophisticated structuring of transactions to minimize taxes and add value to real-estate portfolios.

His affiliations include the Colorado Society of CPA’s, American Institute of CPA’s and the Financial Planning Association. In the past, he has served on several not-for-profit organization boards in Northern Colorado.
In his spare time Ralph enjoys playing golf, hiking, running and weight training.

Mandy A. Sharpe, CPA

Mandy is currently a Partner of Shinn Consulting CPA’s P.C.
Mandy has been in the public accounting business since 2000 and is a licensed Certified Public Accountant, (CPA). Mandy graduated from Colorado State University Cum Laude with a B.A. in Business Administration – emphasis in Accounting. She previously worked with Ralph at Shinn Consulting CPAs P.C. from 2000 to 2004, then took a different direction in her career and worked her way up to tax manager at Sample and Bailey CPAs P.C. over her seven years with them. After getting married and starting a family she is excited to be returning as a Partner to Shinn Consulting CPAs P.C.
She works with all types of individual and business entities to provide consulting and compliance on pertinent issues throughout the year. Her specific expertise resides in tax planning, compliance and consulting for business and individual clients, as well as partnership and not-for-profit taxation. She thrives on building strong lasting relationships with clients to help improve their financial situations. Mandy is active in the city of Fort Collins where she was born and raised. She is a member of Emerge Colorado, a young professionals networking group as well as was selected for and graduated from the Leadership Fort Collins class of 2010.
Her affiliations include the Colorado Society of CPA’s and the American Institute of CPA’s.

In her spare time Mandy enjoys yoga, scrapbooking, and spending time with her husband and two young children.

Shanshan Yang – Executive Assistant

Shanshan graduated in 2008 with a Master in Finance from University of Wyoming. She also has academic training in accounting, economics, statistics, and actuarial science. She worked as a graduate assistant at the university and a commercial banking intern at the Bank of the West.

Her current duties include payroll, payroll tax reports, sales tax reports, financial statements, and tax returns. In her spare time, she enjoys running and strength training.