Tax Changes and Updates

Getting Your Records Together
The key to being compliant and correctly taking all of the deductions that you are entitled to is to have your information organized and available for consideration for input onto your tax return.  Following are some recommendations for getting your 2009 records pulled together.

IRS Hot Button Issues
IRS statistic:  61% of sole proprietors underreport net business income.
Revenue Ruling 56-407:  You must report all of your expenses.
Per the National Association of Enrolled Agents, the following are key audit categories:  gross receipts, costs of goods sold, auto expenses, supplies, meals & entertainment, rent, telephone and depreciation.

New Hire Tax Incentives for 2010
Employers who hire unemployed workers (after Feb 3rd, 2010 & before Jan 1, 2011) are exempt from having to pay the 6.2% employer match of social security. 

In addition, for each worker retained for at least a year, businesses may claim a new hire retention credit of up to $1,000 per worker when they file their 2011 income tax returns.
 
Definition of unemployed new hire = unemployed or has not worked more than 40 hours during the 60-day period prior to start date.   The new hire must sign IRS Form W-11 (or a similar statement).

Mileage Rates
Here are the standard mileage rates for business use of your car.
2009 = 55 cents per mile
2010 = 50 cents per mile