The Coming Sunset Affects More Than Tax Rates

"The Coming Sunset Affects More Than Tax Rates"

Unless Congress acts soon, the "2001 Tax Act" will expire at the end of this year, bringing back pre-2001 tax rates and rules. While the current discussions focus on the income tax rates that will rise if the law is allowed to expire, there are dozens of other major changes that will sunset too.

Here's a quick overview of what 2011 will bring unless Congress intervenes.

* The limitation on itemized deductions based on income will be reinstated in full.

* The phase-out of the deduction for personal exemptions for higher-income taxpayers will be reinstated in full.

* Married couples filing a joint return will not be entitled to twice the standard deduction amount allowed for single taxpayers. Nor will couples get the 15% tax rate on twice the amount of income as single taxpayers get. The marriage penalty, in other words, is back to pre-2001 levels.
* The child tax credit and the dependent care credit will revert to pre-2001 levels.

* The maximum rate for capital gains will revert to 20%, and dividends will be taxed at ordinary income rates as high as 39.6%.

* Among the changes to education tax breaks, the annual contribution to Coverdell education savings accounts will revert to $500.

* The estate tax will return with a maximum rate of 55% and an exclusion amount of $1 million.

Your tax planning, as challenging as it already is, should take these potential changes into account. For guidance in your year-end planning, give us a call.

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About Jose F. Padro, P.A.

Padro and Company, P.A. CPA Doral, Miami Florida – Tax Services, Business Planning & Taxes, Bookkeeping and Accounting, IRS Audit and Dispute Representation, Personal & Business Taxes.
José F. Padró has over 25 years of public accounting experience having practiced is small, mid-size and large accounting firm environments. José has a broad range of experience in taxation, financial reporting and management consulting.

Trust the Professionals at PADRÓ & Company, P.A. Our professional staff is trained to understand the intricacies of business accounting and tax laws - and how to use them to benefit your bottom line.

Padro and Company, P.A. CPA Doral, Miami, Florida
2520 N.W. 97 Ave, Suite 120, Doral, FL 33172 –
(305) 500-9361 - Fax (305) 500-9492

My Point of View of Florida Income Taxes and It's Equivalent Tax , the Real Estate Tax.

My Point of View of Florida Income Taxes and It's Equivalent Tax , the Real Estate Tax.

As Citizens of the State of Florida we have to understand that the State has
two principal tax revenue sources, the first is the Florida Sales tax and
the second is the Real estate taxes charged by the respective Counties of
course there are other methods of Tax funding but, these two are the topics
covered in this discussion.

Most of the States of the Union have a State Income Tax Revenue source in
addition to their Sales Tax Revenue Source. In our State of Florida we have
zero Income Taxes at the individual level and a small Corporate Income Tax. We must also understand that thousands of corporation have elected to
become S Corporations which are exempted for State Income Taxes.

The State of Florida government is tied to the funding sources permitted by
our constitution. So for me is evident that the Real estate Tax is the
substitution for other State Income Tax Revenue.

So those are the major funding sources in place created in our State in
addition to the so called FEES (taxes in disguise) . Our politicians must
understand that economies have contractions and budget and services must be
adjusted accordingly.

Real Estate values have decreased substantially the last couple of years, so
our income tax equivalent (Real Estate Taxes) have decreased. Florida
coffers have been depleted. It is not business as usual.

Services at the State and local levels will have to adapt to the
decrease in budgets due to decrease on tax revenues.

We want a government that we can not afford, our government structure was
created to serve us and not to hurt us. Almost every family, every
taxpayer, every small business is suffering in these economic times and we
have modified our budgets in this contraction.

If we still want a government that we can not afford, then higher taxes are
the solution. We need a government that we can afford and if that means
cutting services to accommodate the shortfall ,so let it be. We can not
mortgage the future of generations to come, it is truly irresponsible and
abuse of power

PADRO & Company, P.A.
Certified Public Accountants
TEL. 305-500-9361 FAX. 305-500-9492
2520 NW 97 Av. Street. Suite 120 Miami. FL. 33172

http://www.padrocpa.com
http://www.twitter.com/padrocpa
http://www.facebook.com/padrocpa

Any tax advice included in this written or electronic communication was not
intended or written to be used and it cannot be used by the taxpayer, for
the purpose of avoiding any penalties that may be imposed on the taxpayer by
any governmental taxing authority or agency.

My Point of View on How Outsourcing is Affecting Social Security

My Point of View on How Outsourcing is Affecting Social Security.

Our Entitlement pyramid is crumbling and outsourcing is one of the culprits.

We are creating an inverse pyramid by having less employees contributing to
support the present time retirees.

The outsourcing business has a detrimental impact on U.S.
Employment, the U.S. Economy and the U.S. Treasury, because the
money is expended abroad and normally it does not come back.

The outsourcing business is growing day by day in America.

Employment (payroll) is the basis used in theory to calculate future
benefits.

When you outsource a job:

U.S. may have a unemployed american.
U.S. will not received Social Security taxes from this unemployed American.
U.S. will not receive Medicare Taxes from this unemployed american.
U.S. will not benefit from consumer spending from this unemployed american.
U.S. will have to cover the uninsured through medicaid because this
unemployed american.
U.S. will lose all the direct and indirect benefit of having that unemployed
american working.
U.S. is exporting its working capital.


U.S. must maintain quality in education so our jobs are not exported to help
other countries. We need the help ourselves.

Our social security program is in trouble Our Medicare program is in trouble
Our health insurance industry does no contain cost.
Our future retirees are in trouble.

Jose F Padro
2009

Any tax advice included in this written or electronic communication was not
intended or written to be used and it cannot be used by the taxpayer, for
the purpose of avoiding any penalties that may be imposed on the taxpayer by
any governmental taxing authority or agency.

Should I invest in my Traditional IRA, this year of so much uncertainty ?

My answer is YES,YES, YES, the best provision of a Traditional IRA which is the tax-deductibility of contributions is a good reason to consider making your investment this year. Today’s shaky state of our economy and the instability of the financial markets is a consideration, your retirement plan should be based on long-term investing goals and must continue.
While in the Traditional IRA, transactions in the account, including interest, dividends, and capital gains, are not subject to tax, withdrawals from the account, are subject to federal income tax and 10% early retirement penalty, some exceptions apply.

Please remember that you have until April 15,2010 to make your IRA Contributions for the tax year ended December 31, 2009.
Perhaps in times of economic uncertainty, the Traditional IRA funds might be placed in a more conservative investment vehicle not so reliant on the volatility of the stock markets. Be sure to consult a trusted financial advisor for information based on your individual needs.

José F. Padró, CPA.
padrocpa@padrocpa.com
www.padrocpa.com
PADRO and Company, P.A.


The information at this Site has been provided by José F. Padró , CPA. for general information purposes. It does not constitute legal, accounting, tax or other professional advice or services and is presented without any representation or warranty as to the accuracy or completeness of the information.

2009 Tax Planning Letter - PADRÓ & Company, P.A.

Dear Clients and Friends,

With an economy struggling to recover from the financial woes of 2008, we are all hoping that 2009 will be a better year. A new administration in Washington means we're certain to have more changes to the tax code in 2009, but the shape and timing of these changes will depend on our economic situation.

The financial turmoil may have you wondering whether you'll have enough money to send your children to college, to pay for your own retirement, or to meet your other financial goals. This Tax Planning Letter is intended to stimulate your thinking about tax strategies that can leave more money in your pocket to spend or invest.

Effective tax planning is a year-round, lifelong activity, and though constantly changing tax law can make planning a challenge, making it a priority will pay off with lower taxes. We are committed to working with you to find the tax strategies best suited to your individual circumstances. If you have questions about anything in this Letter or about your tax-cutting options, please call. And if you have friends or associates who might be interested in tax planning information, feel free to share this Letter with them.

Jose F. Padró, CPA

To view this letter go to:
http://www.planningtips.com/4422/default.asp?Co_ID=115183&Tip_ID=4422