Charity Benefits People and Your Wallet- Youth Opportunity Tax Credits

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The season of giving not only provides benefits to the receivers, but also for people who give this year.

The state of Missouri has recently introduced Youth Opportunity Program Tax Credits. YOPs are designed for programs that broaden and strengthen opportunities for positive development and participation in community life for youth.  Fund raising through the YOP eligible gifts will directly support low-income families.

So, for those of you who are unaware of what a tax credit is we thought it might be a benefit to explain.  A tax credit is actually different from a tax deduction, which works by lowering taxable income, tax credits are a direct reduction of your taxes due.  With tax credits, you have a chance to reduce the amount you owe to the state.

Tax credits are Youth Opportunity Tax Credits are a 50% dollar for dollar deduction from your Missouri State Income Tax. Whether it be individual, business, insurance or banking income.  That means that whatever you give to the charitable institutional, 50% of your contribution comes off of what you owe the state in taxes.

For instance, if you contribute $10,000 to a charity eligible for the YOP tax credit, $5000 of it will be saved in Missouri State Taxes. Even better, this tax credit is in addition to your Federal Tax Deduction.

There are over 60 youth-based organizations in the state of Missouri who participate in the Youth Opportunity Program.  To view a list of these organizations and find out how you can participate, please click here.

For more information on how the YOP tax credit can benefit you and your wallet, please contact Hauk Kruse & Associates for more information at 314-993-4285 or click here to visit our website.

The New IRS and Contracted Employees

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The new IRS and Contract Employees!

2012 is a new year. The same technology which has aided each of us in accomplishing amazing personal and business goals in 2011 is no longer the same in 2012, it continues to change. Technology is more interactive, capable of intuitive manipulation and interwoven into the very framework of our personal and business lives.

As we consider these grand marches, please do not believe the Internal Revenue Service (IRS) has stayed connected with the past. The IRS continues to progress in a massive installation and upgrade of it’s technology and the people who use it. No longer a cost center, the IRS is now a profit center for “the people”.

Small business should prepare itself to be more diligent with filing informational and tax forms. The most important area of consideration is in employment taxes. The IRS is increasing their technological scrutiny of forms and their interconnectivity. Payroll forms 940, 941, and W2 should all tie together, but often enough they do not.

This scrutiny involves all aspects of employment, including and of special interest, contract employees. If you or your business rely on contract labor, check your facts of employment against the contractor test to make sure you are claiming them appropriately.

Do not believe the IRS is the same entity of 2011 or 2010. The Service is faster, smarter, and better equiped to do their job than ever before. The newer smarter IRS has a voracious appetite to assess penalty and interest and is reluctant to abate after assessment.

Comparing the IRS of today with that of five years ago would be like comparing my first Radio Shack computer in 1984 to my son’s Xbox-Live.