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| Winter
2002
In This Issue:
IRS Increases Standard Deduction, Exemptions, Thresholds The Internal Revenue Service has released the new 2002 tax table amounts as well as numerous inflation-related changes to tax deductions, credits, and exemptions. The 2002 standard deduction
is increased to the following amounts:
The standard deduction for taxpayers who may be claimed as dependents by another taxpayer may not exceed the greater of $750 or the sum of $250 and the dependent's earned income. The personal exemption for 2002 is increased to $3,000. The phase-out ranges for personal exemptions are the following adjusted gross income amounts:
January 15, 2002
January 31, 2002
(W-3 Transmittal and Copy A due by mail or magnetic media no later than 2/28/02 or 4/1/02 if filed electronically) • Form 1099 Information ReturnsStatements of non-employee compensation and recipients of interest, dividends and certain distributions (Form 1096 Transmittal and Copy A due by mail or magnetic media no later than 2/28/02 or 4/1/02 if filed electronically)
March 15, 2002
April 15, 2002
IRS Raises Mileage Reimbursement Rates in 2002 The standard mileage rates to use in deducting automobile costs have increased. The rates will be 36.5 cents a mile for all business driven miles, up from 34.5 cents last year. For the use of a car when giving services to a charitable organization, the deduction remains the same at 14 cents per mile. Other rates include 13 cents a mile for the use of an automobile for medical reasons, a slight increase from 12 cents in 2001; and 13 cents a mile for computing deductible moving expenses, also up from 12 cents per mile. The IRS said it decided to
increase the rates because of rising gasoline prices in the past year.
The agency noted that, with the exception of the charitable rate, its decisions
are based on an annual study of the fixed and variable costs of operating
an automobile conducted by an independent contractor.
The fastest most accurate way to file your taxes. IRS e-file is a way to file a tax return electronically. As your tax preparer, we can e-file your return until October 2002. There are many ways e-filing can benefit you: ACCURACY & CONVENIENCE Our software automatically validates the information before transmission which reduces the possibility of errors. There is no worry about your return being lost or delayed in the mail. FAST PROCESSING All returns are processed by the IRS usually between 24-48 hours of receipt and acceptance is officially acknowledged online. Rejected returns can be corrected and re-submitted immediately. FAST REFUNDS With direct deposit, your refund can be deposited into your bank account in 8-14 days depending on the original transmission date. Asking the IRS to mail a paper check increases your refund time to 15-21 days, but still remains less than half the traditional six-week processing time for a tax return filed by mail. NO ACCOUNTING FEES Electronic filing is provided to you as a courtesy of ORW. SAME TAX PAYMENT DEADLINE Tax due returns may be e-filed and the taxes paid on April 15th by using a pre-printed voucher. You can authorize an electronic funds withdrawal from your bank account and schedule the payment on a future date up to (and including) April 15th. You may also "e-pay" balances using a credit card, but you should check with your card service provider beforehand for the amount of convenience fees charged for the transaction. New Rules for 2002 Affecting Your Personal Taxes.... Retirement Issues...
Paying taxes just got a little easier for individuals and businesses. The IRS has introduced EFTPS Online, a new option available through its Electronic Federal Tax Payment System. Individuals start by enrolling online at www.eftps.com. Using your Social Security number and an IRS-supplied Personal Identification Number and password, you can enter payment information and receive an acknowledgment number. EFTPS initiates a debt transaction in the form of an electronic funds transfer for the date specified, completing the operation. EFTPS-Phone is an alternative service that allows phone transactions. Businesses that pay their
taxes electronically also have additional EFTPS options. (Please note
that when a business' federal tax deposits exceed $200,000 during a calendar
year, they are required to use the EFTPS, starting in the second succeeding
calendar year after reaching that threshold.)
It's Time to Gather Your Tax Records The new tax filing season is upon is, and that means it's time to start collecting the information that will be needed for preparing your tax return. W'2s. If you work for an employer, expect your W-2 wage and tax statements to be distributed by January 31. Since errors sometimes occur, it's a good idea to check the information on your W-2 for accuracy by comparing entries such as your gross wages and tax withholding amounts to your payroll stubs. 1099s. Banks, mutual fund companies, and other payors should send you 1099 forms showing reportable interest and dividend income (if over $10) and securities sales proceeds. Look for these forms to be mailed to you no later than January 31. K-1s. If you are a partner, S corporation shareholder, beneficiary of an estate or trust, or a member of an LLC that is treated as a partnership, you'll generally receive a form K-1 from the entity that will be needed for the preparation of your personal income tax return. When should you receive your K-1? Since it is part of the entity's filing date, the answer depends on the type of entity and when it's tax year ends. This is just some of the
information we ask our clients to gather for us at tax time. Our 2001 Tax
Organizers outlining this information and additional checklists have been
mailed. Please contact our office if you have not received yours. We look
forward to serving your personal and business tax needs this filing season
and in the years ahead.
During tax season, the offices of Oliver, Rainey & Wojtek have extended work hours from 8am to 6pm Monday through Friday and from 8 am to 12 pm on Saturdays effective January 21, 2002. We understand the importance of using convenient meeting times to help meet the demands of your schedule, and can help you by scheduling your appointments at our office or at your place of business. Please be sure to let us
know how we can continue to serve you and meet all of your accounting needs.
Time is one of our most valuable assets. If you sometimes find that the time needed to manage the payroll and personnel needs of your company places too many demands on your day to day operations, consider ORW as your service provider. Many people find that outsourcing payroll functions is a cost effective measure by saving wages, payroll taxes and the money spent on expensive equipment and computer software. At Oliver, Rainey & Wojtek, we have the time! And, with the recent addition of Nancy K. Switzer to our staff, we now have a full-time Payroll Specialist who joins our bookkeeping department. Nancy brings over 17 years of experience to ORW along with a BBA in Business from Angelo State University. She is currently working toward her second bachelor's degree and will graduate from ASU in May, 2002 with a BBA in Accounting. Our payroll services begin with the entry of your company and employee information along with your pay and deduction types. We can provide you with laser printed encoded checks ready for signature or the convenience of nationwide direct deposit. Each payroll run is returned to you with current and year-to-date reports as well as a tax liability summary and entries to update your own general ledger. Changes to your payroll schedule are just a phone conversation away with one of our seven full-time, full-charge bookkeepers. If you would like more information
about our payroll services and more....please give us a call.
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