* How can I check the status of my refund?

You can go online to check on your refund. Go to www.irs.gov and click on “where’s my refund?” Or call 1-800-829-4477 for automated refund information available 24 hours a day, seven days a week.

* What records should I keep?

Keep receipts, canceled checks, or other substantiation for any deductions or credits you claimed. Also keep records that verify other items on your tax return (W-2s, 1099s, etc.). Keep a copy of the tax return, along with the supporting records, for seven years.

* What if I discover that I made a mistake on my return?

If you discover that you failed to report some income or claim a deduction or credit to which you are entitled, you can correct the error by filing an amended tax return using Form 1040X.

* What if my address changes after I file?

If you move or have an address change after filing your return, send Form 8822 “Change of Address” to the IRS. You should also notify the Postal Service of your new address so that you’ll receive any refund you’re due or notices sent by the IRS.

With additional tax related questions, please contact our office at (317) 782-3070 or visit http://www.simonsbitzer.com.

Because 50% bonus depreciation is allowed only for new vehicles, these limits are different for new and used vehicles.

* For new business cars, the first-year limit is $11,160; for used cars, it’s $3,160. After year one, the limits are the same for both new and used cars: $5,100 in year two, $3,050 in year three, and $1,875 in all following years.

* The 2012 first-year depreciation limit for trucks and vans is $11,360 for new vehicles and $3,360 for used vehicles. Limits for both new and used vehicles in year two are $5,300, in year three $3,150, and in each succeeding year $1,875.

For details relating to your 2012 business vehicle purchases, feel free to contact Simons Bitzer & Associates.

* Here’s an example. Say you want to sell a piece of property for $10,000 cash. A
potential buyer offers $5,000 cash down, and $5,500 one year from now. How does the
buyer’s offer compare to your terms?

If you receive the entire $10,000 today, let’s assume you could earn 5% on the money. A
year from now you’ll have $10,500, which is referred to as the “future value” of $10,000.

On the other hand, the future value of the buyer’s offer turns out to be $10,750, which
is the sum of the payment one year from now ($5,500) plus the future value of the down
payment ($5,250). If the buyer has good credit, you may be better off taking the buyer’s offer.

* Calculate present value. Another way to evaluate this kind of offer is to compare
the “present value” of both alternatives. Using a financial calculator or special financial
table, and still assuming you can earn 5% on your money, the present value of the buyer’s
offer is calculated to be $10,238, compared to a present value of $10,000 for a lump-sum
cash payment. A higher present value means a better deal for you, so the buyer’s offer is
more attractive.

If you’re on the other side of a transaction (buying something), time-value concepts can
also help you make better decisions. For example, a time-value analysis can help you
decide whether to buy or lease a car. You can also use time value to analyze investment
alternatives, negotiate a divorce settlement, or hammer out the best possible deal when
leasing real estate or business equipment.

If you’re about to enter into any financial arrangement that requires you to pay money
over time, or entitles you to receive periodic payments, time value could be an important
issue.

Simons Bitzer & Associates can help you work through the numbers.

In any event, set aside your guilt. Financial planning means creating effective strategies that work for you — which can include forcing yourself to save by overpaying your income tax during the year.

The more important consideration is what you do with the money you get back. Here are ideas for making the most of your refund.

* Save. The unexpected happens. The question is, how do you pay the resulting bills? Parking part of your refund in a readily accessible location, such as a bank checking, savings, or money market account, will help you weather short-term, temporary setbacks without incurring penalties or transaction fees.

* Spend. Spending your refund wisely can get your finances in shape and pay off over the long run. For instance, home improvements like energy-efficient windows or a new water heater may result in lower electric and insurance bills. Refinancing your mortgage reduces your monthly cash outlay, freeing money for investing or saving. The same holds true for paying down high-interest credit cards – as long as you resist the urge to reload them.

* Self-invest. Using your refund to refresh your current career-related skills or to learn new ones can provide a double benefit: more employment opportunities and tax savings. Unsure of your job security? Put your refund to work by financing a home-based business and creating a second stream of income.

With assistance related to your tax withholding, estimated tax payments, or tax refund, please give us a call.

* Filing 2011 income tax returns for individuals.

* Filing 2011 partnership returns for calendar-year partnerships.

* Filing 2011 income tax returns for calendar-year trusts and estates.

* Filing 2011 annual gift tax returns.

* Making 2011 IRA contributions.

* Paying the first quarterly estimate of 2012 individual estimated tax.

* Amending 2008 individual tax returns (unless the 2008 return had a filing extension).

* Original filing of 2008 individual income tax return to claim a refund of taxes. Some taxpayers have tax refunds due them for prior years, and unless a return is filed to claim the refund by the three-year statute of limitations, the refund is lost forever.

If you can’t file your 2011 tax return by the April 17th deadline, you can file for an extension by that date and you’ll have until October 15, 2012, to file. You can request the extension on paper, by phone, or online.  The extension is automatic, with no explanation necessary.  Be aware, however, that an extension to file does not give you more time to pay taxes due for 2011. For assistance with filing an extension and calculating the amount owed, please contact Simons Bitzer & Associates at (317) 782-3070.

According to The Tax Foundation, “the long phase out period is designed to give policymakers ample time to deal with the revenue impact.” Lawmakers suggest that this impact will be offset by an agreement to begin taxing Amazon.com in 2014. The inheritance tax currently brings in about $145 million annually, or 1% of total taxes.

“Because the exemption levels are so small, even small businesses will benefit. It is a positive move for anyone who has assets that they want to pass to their heirs,” says Kevin Aaron, Tax Specialist at Simons Bitzer

     Simons Bitzer & Associates is conducting a Business Leader Survey to learn what issues are most pressing to business owners in Central Indiana. Respond to our survey on or before April 19th and be entered to win a new iPad. http://svy.mk/GMWMZK

     We look forward to hearing from you and sharing the results!

HOME BUYER CREDIT:  If you bought a home in 2008 and took the first-time home buyer credit, you have another repayment installment due with your 2011 tax return.  The 2008 tax credit was an interest-free loan that you have to pay back over a 15-year period.

ROTH CONVERSIONS:  If you converted a traditional IRA to a Roth IRA in 2010 and opted to split the tax due from the conversion between 2011 and 2012, your first half of the tax is due on your 2011 tax return.

If you have questions regarding either of these two repayments, please contact our office at (317) 782-3070 or visit www.simonsbitzer.com.

Don’t despair.  You might still have time to make some changes.  For example:

* You have until April 17th to make a tax-deductible IRA contribution for 2011. If you qualify, you could contribute up to $5,000 and have it count as a deduction against last year’s taxes. If you were 50 years old or older last year, your maximum contribution is $6,000.

* Even if you’ve already made your 2011 contribution to a Roth IRA, it may not be too late to make a change.  You may be able to recharacterize your contribution as a traditional IRA contribution and take the deduction.  You’ll need to set up a traditional IRA, make a trustee-to-trustee transfer, and report it on your 2011 tax return.  Please contact your CPA and/or our office prior to making this change.

*If you’re self-employed, there’s still time to set up a SEP-IRA for your business.  You have until the due date of your return, including extensions, to set up the plan and make a contribution from 2011 earnings.  SEP-IRAs are relatively easy to establish and flexible to manage.

Contact our office if you’re interested in any of these ideas. We can help determine whether you qualify and guide you through the process. You can reach us at www.simonsbitzer.com or (317) 782-3070.

The principal advantage of an S corporation is that you avoid paying double taxes. In a traditional C corporation, profits are taxed at the corporate level and then they’re taxed again when paid to individual shareholders as dividends. In an S corporation, there are no taxes on earnings at the corporate level. Instead, profits or losses flow directly through to the shareholders. They pay taxes only once, when they report their share of earnings on their individual tax returns.

Another advantage: Doing business as an S corporation can be attractive in the early, unprofitable years of a start-up business. That’s because operating losses flow through your personal taxes, perhaps offsetting other taxable income.

There are some trade-offs for these tax benefits, though. If you’re an owner-employee and own more than two percent of the company, you’ll receive less favorable tax treatment for some fringe benefits. There are also ownership limitations. The company can have only one class of stock, there can’t be more than 100 shareholders, all of the shareholders must be U.S. citizens or residents, and the corporation must meet other restrictions.

Despite these drawbacks, doing business as an S corporation can still offer some tax planning advantages. If you can meet the ownership requirements, it might be well worth considering an S corporation election. Contact Simons Bitzer at www.SimonsBitzer.com or (317) 782-3070 for an in-depth analysis of the pros and cons for your company.