The Internal Revenue Service has launched a new online search tool, Exempt Organizations Select Check, to help users more easily find key information about tax-exempt organizations, such as federal tax status and filings.

Users can now go to one location on IRS.gov, select a tax-exempt organization, and check if the organization:

o Is eligible to receive tax-deductible charitable contributions (Publication 78 data, which is incorporated here). Users may rely on this list in determining deductibility of contributions (just as they did when Publication 78 was a separate electronic publication rather than part of Select Check).

o Has had its federal tax exemption automatically revoked under the law for not filing a Form 990-series return or notice for three consecutive years (known as the Auto-Revocation List).

o Has filed a Form 990-N (e-Postcard) annual electronic notice. (Most small organizations whose annual gross receipts are normally $50,000 or less are required to electronically submit Form 990-N, unless they choose instead to file a completed Form 990 or Form 990-EZ.)

EO Select Check also offers improved search functions. For example, users can now look for organizations eligible to receive deductible contributions by Employer Identification Number (EIN), which was previously not a searchable or sortable field in the electronic Publication 78. And data about organizations eligible to receive deductible contributions are now updated monthly, rather than quarterly.

In addition, organizations that have automatically lost their tax exemptions may now be searched by EIN, name, city, state, ZIP Code, country, exemption type, and revocation posting date, rather than only by state. EO Select Check also provides new pop-up help text to assist users in understanding the significance of auto-revocation search results, including the meaning of, and distinctions between, revocation dates and revocation posting dates.

Click here for search tips.

***UPDATED: Here is the announcement regarding Indiana:

Tax Relief for Victims of Severe Storms, etc. in Indiana

***UPDATED: Here is the announcement referenced below:

Tax Relief for Victims of Severe Storms, etc. in Kentucky

From the IRS:

Although FEMA has yet to declare any Indiana counties, we are expecting them soon. Seven counties have been declared Presidential Disaster Areas under FEMA-4057-DR-KY.  They are Johnson, Kenton, Laurel, Lawrence, Menifee, Morgan and Pendleton.

We are expecting an announcement later today that will explain that taxpayers in these counties will have until May 31, 2012 to meet certain tax deadlines.  I will forward this information once I receive it as well.

For more information from FEMA visit www.fema.gov

For more information on IRS Disaster Relief stay tuned to http://www.irs.gov/businesses/small/article/0,,id=156138,00.html

Please cascade this information to anyone who may need the information.

As a reminder, businesses are required to issue a Form 1099 for any payments of $600 or more for services by vendors that are not incorporated. If the vendor name does not include Inc. or Corporation, then it is necessary to verify the entity status by requesting a Form W-9 from that business or individual. For the most part, LLCs should receive 1099s.

File Form 1099-MISC for each non-incorporated vendor to whom you have paid at least $600 during the year for:

• Rent
• Services (including parts and materials)
• Prizes and awards
• Other income payments
• Medical and health care payments
• Crop insurance proceeds
• Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish
• Generally, the cash paid from a notional principal contract to an individual, partnership, or estate
• Fishing boat proceeds
• Gross proceeds of $600 or more paid to an attorney

The following payments made to corporations generally must also be reported on Form 1099-MISC:

• Medical and health care payments
• Fish purchases for cash
• Attorneys’ fees
• Gross proceeds paid to an attorney
• Substitute payments in lieu of dividends or tax-exempt interest
• Payments by a federal executive agency for services (vendors)

The penalty for not filing the required Form 1099s with the IRS has increased to a maximum of $250 per 1099, with an additional maximum of $250 per 1099 not provided to payees, for a total of $500 per non-filed 1099.

NOTE: Those making payments of $600 or more for services performed in the Louisville/Metro area are required to complete Form 1099-SF, indicating the total amount paid in non-employee compensation, and exactly what portion was for services performed within Louisville/Metro Kentucky. If you have any questions, please do not hesitate to call us at (812) 288-6621.

The employee portion of the Social Security tax was reduced from 6.2% of the first $106,800 of wages to 4.2% for 2011 by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The employer portion remained at 6.2%.

Under TTCA, the 4.2% rate is extended through February 29, 2012.

The act provides special rules for 2012 so that taxpayers with self-employment income and income from employment in excess of $18,350 (one-sixth of the 2012 Social Security wage base of $110,100) do not receive an extra benefit. If a full-year extension of the payroll tax cut is not enacted, taxpayers with income from employment for January and February that exceeds $18,350 will be required to recapture the excess benefit they receive. The recapture provision was included instead of a cap on the amount of employment income because of the compliance difficulties that would cause employers.

Because the extension affects withholding and was enacted only a little over a week before the higher payroll tax was scheduled to go into effect, it is not clear how well employers and payroll companies will be able to handle that change. The IRS notified employers that they should implement the lower payroll tax rate as soon as possible in 2012, but no later than January 31. The IRS also said that if an employer overwithholds during January, it should make an offsetting adjustment in workers’ pay as soon as possible, but no later than March 31. The IRS will be issuing additional guidance on implementing the provisions of the two-month extension, including revised employment tax forms and information for employees who may be subject to the recapture provision.

A conference committee of representatives and senators will be appointed to discuss extending the reduced rate for the remainder of 2012.

The rate for using a car to get medical care or in connection with a move that qualifies for the moving expense will decrease by .5¢ from the July 1, 2011 mid-year adjustment to 23¢ per mile. The mileage rate for driving an auto for charitable use (14¢ per mile) is a statutory rate that’s not adjusted for inflation.

In addition to the opportunity to meet businesses face-to-face under one roof, the event will feature two silent auctions of items like $30,000 in advertising; live entertainment; tasting booths hosted by area restaurants; spectacular prizes; lunch for purchase on-site; and much more. It’s a win-win event for everyone!

Click here to view our gallery of former chess set winners.

• When filing for Social Security benefits, does timing matter?
• If married, which of the various filing strategies is best for you and your spouse?
• Should you continue to work while collecting Social Security?
• Should you file early at 62, or wait until full retirement age?

Thursday, 8.25.11
McCauley Nicolas Centre Community Room (Lower Level)
702 North Shore Drive, Jeffersonville, IN
Registration 5pm; Presentation 5:30-6:30pm
Refreshments to follow

RSVP by 8.19.11 to (812) 288-2881 or Jay_Conner@camadvisors.com

Employers who pay the state unemployment tax on a timely basis receive an offset credit of up to 5.4%, which results in an effective FUTA rate of 0.8% (6.2% less 5.4%). With the expiration of the surtax, the effective rate will become 0.6% (6.0% less 5.4%) beginning July 1, 2011.

So what does this mean for employers?

As the IRS noted on June 2, employers should separately track FUTA taxable wages paid before July 1, and FUTA taxable wages paid after June 30, since the FUTA rates are different during those two periods. Employers whose FUTA tax is more than $500 for the calendar year are required to make quarterly FUTA deposits. The next quarterly payment is due on July 31 and is based on taxable wages earned through June 30, so it will be computed using the 6.2% (0.8% effective) FUTA rate. The payment after that is due on October 31, 2011, and it will be computed using the 6.0% (0.6% effective) FUTA rate, assuming legislation is not enacted to retroactively reinstate the FUTA surtax beginning July 1, 2011.

The IRS will have some mechanism in place under which an employer will not be assessed deposit penalties if it computes its third and fourth quarter unemployment tax deposits at a 6.0% (0.6% effective) rate, and legislation is enacted to retroactively reinstate the surtax.

The IRS is developing a new Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, for 2011 that will allow employers to designate two different FUTA rates for the year. That return must be filed in January 2012.

Credit Reduction States

A state that has not repaid money it borrowed from the federal government to pay unemployment benefits is a “credit reduction state”. In 2010, there were three states subject to a reduction of the 5.4% state unemployment tax credit. Indiana and South Carolina had a 0.3% reduction, creating an effective FUTA rate of 1.1% (0.8% + 0.3% credit reduction). Michigan was in its second year as a credit reduction state, so the credit was reduced by 0.6%, resulting in a 1.4% effective FUTA rate.

The unemployment credit reduction states for 2011 will not be announced until November 2011, with payment due January 2012. The credit reduction will apply for the entire year, and will be part of the employer’s fourth quarter FUTA tax liability.

As a heads up, the states that are on the POTENTIAL credit reduction list are:

Michigan – 0.9% credit reduction (third year)

Indiana and South Carolina – 0.6% credit reduction (second year) – potentially making the effective rate 1.4% for January-June 2011 (0.8% plus 0.6%) and 1.2% for July-December 2011 (0.6% plus 0.6%).

Other states that may be subject to a 0.3% credit reduction, resulting in an effective rate of 1.1% for January-June 2011 and 0.9% for July-December 2011, are: Alabama, Arkansas, California, Connecticut, Florida, Georgia, Idaho, Illinois, Kentucky, Minnesota, Missouri, North Carolina, New Jersey, Nevada, New York, Ohio, Pennsylvania, Rhode Island, Virginia, Virgin Islands and Wisconsin.

For more information, contact Diane Kilner, CPA, Manager of Small Business Services, at (812) 288-6621.

- 55.5 cents per mile for business miles driven
- 23.5 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations (no change)

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On Friday, December 3, 2010, the IRS published their standard mileage rates for 2011. These rates are used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. The 2011 rates are:
– 51 cents per mile for business miles driven
– 19 cents per mile driven for medical or moving purposes
– 14 cents per mile driven in service of charitable organizations

The business mileage rate is up 1 cent from 2010, the medical and moving rate is up 2.5 cents, and the charitable mileage rate has stayed the same.