Just in time ... your biggest tax questions answered by fellow chamber members.

Position:SMALL BIZ BEAT
 
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Rob Dutkiewicz, CPA, MST

An Owner at Clayton & McKervey, P.C.

What are the most overlooked tax breaks?

There are two tax breaks that I see most commonly overlooked: first is the Research and Experimentation Credit. This is a tax credit that taxpayers can get that is over and above what they customarily do. If you meet the definition of the R&E credit, that is, you continually improve products or processes, these opportunities exist. We have one client who fits this description that saves about $50,000 more each year.

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This credit is overlooked because either taxpayers understand it or don't know if they qualify, or smaller CPA practitioners don't have the expertise to pursue this for their clients.

The other is Cost Segregation. The IRS has provided for some generous accelerated depreciation in the acquisition a new building. With the proper due diligence, taxpayers can take up to 40 percent of the value of the building and accelerate the depreciation.

Suzanne Tuson, CPA, MST

An Owner at Clayton & McKervey, P.C.

How do I prepare for MBT?

First, make sure your accounting system is in order to capture the necessary information required to prepare for the Michigan Business Tax.

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Second, be aware of when your returns are due. Deadlines have changed, and estimates are now due 15 days earlier. Late payments aren't in anyone's best interest.

By the way, under the new rules, certain business groups must file a combined return. It is important to understand if you are part of one of these this groups. Talk to your accounting professional to help determine your situation.

Tim Hilligoss, CPA MST

An Owner at Clayton & McKervey, P.C.

How might a fiscal year affect tax returns with the new MBT?

There are both transitional and long-term issues facing fiscal year tax filers. The transition from SBT to MBT essentially straddles the fiscal year; this results in the need to file two Michigan tax returns. A short year SBT return for the period that ended December 31, 2007 and a short year MBT return for the remainder of the fiscal year. The short year SBT return is due on April 30, 2008. This is also the extension deadline.

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Fiscal year entities with affiliates will need to determine who will he the filing entity under the unitary group filing requirements of the MBT. This will affect which year ends to combine, the due date of the return and estimated taxes.

Because the...

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