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Take advantage of the Taxman's latest offeringsBy Jill Carlson
Growing Wisconsin "Governor Jim Doyle's 'Grow Wisconsin' agenda has fostered many new measures to aid businesses in streamlining tax obligations. The measures work to create fair and equitable taxation to encourage businesses to stay in Wisconsin as well as to attract new businesses to the state," said Meredith E. Helgerson, communications officer at the state Department of Revenue. • The Wisconsin Angel Investor Network Credit was started in spring 2005 and allows a state tax credit for investors in startup companies certified by the Wisconsin Department of Commerce. According to the Commerce Web site, www.commerce.wi.gov, angel investors and angel investor networks that invest in qualified new business ventures may be eligible to claim an income tax credit on that investment, equal to 12.5 percent in each of two years. "The credit will hopefully give high-tech start-ups more access to start-up capital and also will give angel investors additional incentive to invest in Wisconsin-based businesses," said Tom Milliken, head of the tax services department at Suby, Von Haden & Associates, a public accounting firm. Some of the Dane County participants in the Wisconsin Angel Investor Network include Quintessence Biosciences, a company that develops protein-based therapeutics, OvaTech, a producer of feed additives to enhance the growth of livestock and GenTel BioSurfaces, a producer of biochips. • "In 2005, communities got a new way to use an old tool," Helgerson said. The Tax Incremental Finance option, or TIF, which has been around since 1975, was expanded to include mixed-use districts, meaning that commercial, residential and industrial projects could be combined into one TIF district (TID). Taxes generated by the increased property values pay for land acquisition or needed public works. "Local governments have used this new type of TID to support development projects that would not have worked with TIF before," she said. Mazomanie is putting the new TIF program to good use for restoration and development. In 2005, the village applied for two TIF districts - one in the industrial park located on Highway 14, the other downtown. Daniel Viste, owner of Historic Properties Management in Mazomanie, has been instrumental in restoring historic downtown buildings, many of which date from the 1860s. "Mazomanie has 34 buildings on the National Register. It's very rare for a community to have that many historic buildings," Viste said. He also owns the Old Feed Mill restaurant, Halle's Vintage Shoppe and the Whistle Stop Caf�, all of which are housed in buildings he has restored. Viste's next project is to restore the former Carlisle Hotel to create a bed and breakfast with the help of the TIF program. "There is value in TIF, it provides extra support in terms of financing and turns not viable to viable," Viste said. • Although Wisconsin was not in the direct path of Hurricane Katrina, KETRA, the Katrina Emergency Tax Relief Act of 2005, provides special tax benefits for those who provide assistance to victims of that storm, as well as hurricanes Rita and Wilma. Businesses that made cash, food or book contributions to qualified charitable organizations for hurricane victims between Aug. 28 and Dec. 31, 2005, are eligible for larger-than-normal deductions. For employers who hired a displaced worker, whether or not the place of employment was located in the Hurricane Katrina "core disaster area," the Work Opportunity Tax Credit (WOTC) is available. WOTC is a credit equal to 40 percent of the first $6,000 of wages paid to the employee in the first year. For specific Katrina Emergency Tax Relief information, visit www.irs.gov/pub/irs-pdf/p4492.pdf. Other changes • Another federal tax change is the Section 199 deduction, which allows manufacturers, contractors, engineers and architects a deduction of up to 3 percent of profit from manufacturing or real property construction activities. The percentage deduction increases to 9 percent over a period of years. • For those thinking ahead to retirement, participants in 401(k) plans can now choose to contribute to a Roth 401(k) on an after-tax basis. Contributions to Roth plans and all future earnings can be withdrawn tax-free during retirement. • Business owners who use their cars for business will see an increase in the standard mileage rate; after August 31, 2005, the rate became 48.5 cents per mile. File online The IRS is encouraging taxpayers, including businesses, to file their taxes electronically using IRS e-file. During the 2004 tax season, more than 68.4 million tax returns, or 52 percent of all returns, were filed electronically, according to a spokesperson from the IRS. It's hard to believe that e-file is 20 years old, but the program began in 1986 as a pilot project in just three cities: Cincinnati, Phoenix, and Raleigh-Durham. To mark the 20-year anniversary of IRS e-file, the IRS is launching the Electronic IRS, a centralized source for all IRS electronic options. Taxpayers and tax preparers who click on the Electronic IRS logo, located at www.irs.gov, will be taken to a page that contains an overview of all the electronic tasks that can be completed online. Taking the 'taxing' out of tax preparation "Tax laws are constantly changing. There have been six major tax bills passed in the last two years alone. Average taxpayers are not likely to be aware of all the changes that may affect their tax return. A tax professional stays abreast of these changes, and, as a result, is in a better position to assist taxpayers with filing accurate returns and claiming all the deductions and credits to which they are entitled," said Cindy Hockenberry, tax information analyst for the Appleton-based National Association of Tax Professionals (NATP). Tom Milliken from Suby, Von Haden & Associates S.C. explained that members of the Wisconsin Institute of CPAs are required to have 120 hours of continuing education in each three-year cycle, with a minimum of 20 hours in each calendar year of the cycle to keep current with tax law changes. Milliken said good sources for reliable tax advice include CPAs practicing in the tax area where the business is located, tax attorneys and IRS publications. In response to citizen complaints, the IRS has redesigned its Web site to make it more user-friendly and to ensure that correct information is posted. This year, you'll have two more days to file your taxes. Because April 15 is a Saturday, the due date is April 17. jilly@chorus.net madison.com ©2009 Capital Newspapers. All rights reserved. |
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