Economic Stimulus Beware

The new stimulus plan put into place by President Obama and Congress may have potential issues for certain taxpayers who normally receive an income tax refund when filing their taxes. The system designed to disburse these funds to taxpayers has some variables that are not accounted for, because they may differ based on each taxpayer's situation. For example, taxpayers most likely to be affected by this system are married taxpayers, who both work, or any taxpayer who has more than one paying job. The reason this system is causing a problem is the payroll tax tables always assume, when calculating your tax, that this is your only job and your only income. If it isn't, you will be getting a much larger reduction in your tax withholdings than you are entitled to and will be required to repay that tax upon filing your 2009 return. If your tax overpayment is still significant enough, allowing you to get a refund, this problem will just make the refund smaller. On the other hand, you might experience a role reversal and have to write a check back to the government next April 15.

Self Rental Rules For Business Owners

Self rental rules are often referred to when an operating business (typically a corporation) rents real estate from a commonly owned entity, such as an LLC. There are two rules to be aware of that often seem to be overlooked. First, if your LLC is creating a rental loss, you will not be allowed to deduct that loss against your salary from the corporation, as you run into what is called the passive income/loss rule. A passive loss can only be deducted against other passive income. The key component to this example is that a corporate salary does not count as passive income. Second, take it one step further, assume you have investments with other passive activity. If your LLC has rental income this time, and your other passive investments have losses, you will not be allowed to deduct those other passive losses against your income from your LLC rental. The IRS does not allow this, because you have too much control over the commonly owned companies and have the ability to create deductions that you would not otherwise qualify for. Again, these are referred to as the self rental rules. If audited and you have a structure such as described, you should be prepared for it to be challenged.

VOF Elite Award Winner

Valley Oak Financial is proud to announce that the firm was recognized as an Elite Award Winner at the celebration event honoring West Michigan's 101 Best and Brightest Companies to Work For in 2009! Yesterday, at the Pinnacle Center in Hudsonville, the Michigan Business and Professional Association, presented Matthew Rzepka with the Recognition and Retention award.

The Recognition and Retention award honors the company that excels in
recognizing and rewarding achievements and outstanding performance, and
works to retain its best and brightest employees.

VOF was founded in June 2006. This was the first year the firm entered the competition.