Among the common tax issues that can trip up new business owners:

* Classification of workers. Determining whether workers are employees or independent contractors is a matter of law, not the choice of the worker or the employer.

* Federal employment tax deposits. Called trust fund taxes, these deposits must be made according to the appropriate schedule, depending on deposit amounts.

* Quarterly estimated tax payments. Business earnings are not subject to tax withholding; therefore, the owner’s income and social security tax obligations are met through quarterly estimated tax payments.

* Recordkeeping. New businesses need a good recordkeeping system to make tax filing easier and accurate.

* Disaster protection. Financial and tax records need to be protected to ensure business continuity in the event of a disaster.

* Tax scams. New business owners should be alert to the prevalence of abusive tax avoidance schemes. Falling victim to one of these schemes could result in serious tax problems.

For guidance in getting a new business off on the right tax foot, give our office a call at 302.225.5000.

Although the health care mandate has received the most attention, three lesser-known tax changes in the law could have a major impact. If these provisions are allowed to stand, they will take effect in 2013.

1. Medicare surtaxes. Taxpayers will owe a new 3.8% Medicare surtax on the lesser of net investment income or the amount by which modified adjusted gross income (MAGI) exceeds an annual threshold of $250,000 for joint filers and $200,000 for single filers. For this purpose, “net investment income” includes interest, dividends, royalties and annuities, rent and other passive activity income, capital gains from the sale of property not used in your business, and trading of financial instruments and commodities. It does not include business income, income from tax-free municipals, or distributions from IRAs and qualified retirement plans.

In addition, a separate 0.9% Medicare surtax applies to earned income in excess of $250,000 for joint filers and $200,000 for single filers. A taxpayer might have to pay both surtaxes.

2. Medical deductions. Currently, a taxpayer may deduct unreimbursed medical expenses in excess of 7.5% of adjusted gross income (AGI). This threshold is scheduled to increase to 10% in 2013 for those under age 65.

3. Flexible spending accounts. Currently, there is no legal limit on annual contributions to a flexible spending account (FSA) for health care expenses. Under the health care law, annual contributions to a health-care FSA are capped at $2,500. This amount will be indexed for inflation after 2013.

Faced with these looming tax changes, you may take appropriate steps before 2013. For instance, you might realize long-term capital gains in 2012 to avoid the 3.8% Medicare surtax, especially since the maximum tax rate is only 15% this year (scheduled to increase to 20% in 2013). Similarly, you might consider accelerating nonemergency medical expenses into 2012 to benefit from the lower AGI threshold or to exhaust FSA funds.

We will keep you posted on any major new developments. Don’t hesitate to contact us for tax planning guidance suited to your situation.

How can I check the status of my refund?

You can go online to check on your refund. Go to www.irs.gov and click on “where’s my refund?” Or call 1-800-829-4477 for automated refund information available 24 hours a day, seven days a week.

What records should I keep?

Keep receipts, canceled checks, or other substantiation for any deductions or credits you claimed. Also keep records that verify other items on your tax return (W-2s, 1099s, etc.). Keep a copy of the tax return, along with the supporting records, for seven years.

What if I discover that I made a mistake on my return?

If you discover that you failed to report some income or claim a deduction or credit to which you are entitled, you can correct the error by filing an amended tax return using Form 1040X.

What if my address changes after I file?

If you move or have an address change after filing your return, send Form 8822 “Change of Address” to the IRS. You should also notify the Postal Service of your new address so that you’ll receive any refund you’re due or notices sent by the IRS.

For answers to other tax questions you may have, give us a call.

Here’s an example. Say you want to sell a piece of property for $10,000 cash. A potential buyer offers $5,000 cash down, and $5,500 one year from now. How does the buyer’s offer compare to your terms?

If you receive the entire $10,000 today, let’s assume you could earn 5% on the money. A year from now you’ll have $10,500, which is referred to as the “future value” of $10,000.

On the other hand, the future value of the buyer’s offer turns out to be $10,750, which is the sum of the payment one year from now ($5,500) plus the future value of the down payment ($5,250). If the buyer has good credit, you may be better off taking the buyer’s offer.

Calculate present value. Another way to evaluate this kind of offer is to compare the “present value” of both alternatives. Using a financial calculator or special financial table, and still assuming you can earn 5% on your money, the present value of the buyer’s offer is calculated to be $10,238, compared to a present value of $10,000 for a lump-sum cash payment. A higher present value means a better deal for you, so the buyer’s offer is more attractive.

If you’re on the other side of a transaction (buying something), time-value concepts can also help you make better decisions. For example, a time-value analysis can help you decide whether to buy or lease a car. You can also use time value to analyze investment alternatives, negotiate a divorce settlement, or hammer out the best possible deal when leasing real estate or business equipment.

If you’re about to enter into any financial arrangement that requires you to pay money over time, or entitles you to receive periodic payments, time value could be an important issue. Before you sign on the dotted line, let us help you work through the numbers.

Be aware, however, that an extension to file does not give you more time to pay taxes due for 2011.

For assistance, contact our office at (302) 225-5000 or info@gunnip.com.

Promoters of the scheme target senior citizens, low-income individuals, and members of church congregations. The con artists say they can get a tax refund or stimulus payments based on the American Opportunity Tax Credit, even if the taxpayer was not enrolled in or paying for college.

Victims of these scams can lose the upfront fees they are asked to pay to have the promoters file these claims on their behalf.

The IRS also warns taxpayers to be careful of these scams because they are legally responsible for the accuracy of any tax return filed and will have to repay any refunds received in error, plus penalties and interest. They may also face criminal prosecution.

In its notice about the promotion of these bogus refund claims, the IRS cautions taxpayers to beware of any of the following:

•  Fictitious claims for refunds or rebates based on false statements of entitlement to tax credits.

•  Unfamiliar for-profit tax services selling refund and credit schemes to the membership of local churches.

•  Internet solicitations that direct individuals to toll-free numbers and then solicit social security numbers.

•  Homemade flyers and brochures implying credits or refunds are available without proof of eligibility.

•  Offers of free money with no documentation required.

•  Promises of refunds for “Low Income — No Documents Tax Returns.”

•  Claims for the expired Economic Recovery Credit Program or for economic stimulus payments.

•  Unsolicited offers to prepare a return and split the refund.

•  Unfamiliar return preparation firms soliciting business from cities outside of the normal business or commuting area.

Tuesday, April 17, is the deadline for filing certain returns and taking certain tax-related actions. Here are the major deadlines.

* Filing 2011 income tax returns for individuals. If you cannot file your return by this deadline, be sure to file an extension request by April 17. The automatic extension (you don’t need to explain to the IRS why you need more time) gives you until October 15, 2012, to file your return. An extension does not, generally, give you more time to pay taxes you still owe.

* Filing 2011 partnership returns for calendar-year partnerships.

* Filing 2011 income tax returns for calendar-year trusts and estates.

* Filing 2011 annual gift tax returns.

* Making 2011 IRA contributions.

* Paying the first quarterly estimate of 2012 individual estimated tax.

* Amending 2008 individual tax returns (unless the 2008 return had a filing extension).

* Original filing of 2008 individual income tax return to claim a refund of taxes. Some taxpayers have tax refunds due them for prior years, and unless a return is filed to claim the refund by the three-year statute of limitations, the refund is lost forever.

STANDARD MILEAGE RATE for business driving remains at 55.5¢ a mile. Rate for medical and moving mileage decreases to 23¢ a mile. Rate for charitable driving remains at 14¢ a mile.

SECTION 179 maximum deduction decreases to $139,000, with a phase-out threshold of $560,000.

TRANSPORTATION FRINGE BENEFIT limit decreases to $125 for vehicle/transit passes and increases to $240 for qualified parking.

SOCIAL SECURITY taxable wage limit increases to $110,100. Retirees under full retirement age can earn up to $14,640 without losing benefits.

KIDDIE TAX threshold remains at $1,900 of unearned income and applies up to age 19 (up to age 24 for full-time students).

NANNY TAX threshold increases to $1,800.

HSA CONTRIBUTION limit increases to $3,100 for individuals and to $6,250 for families. An additional $1,000 may be contributed by those 55 or older.

401(k) maximum salary deferral increases to $17,000 ($22,500 for 50 and older).

SIMPLE maximum salary deferral remains at $11,500 ($14,000 for 50 and older).

IRA contribution limit remains at $5,000 ($6,000 for 50 and older).

ESTATE TAX top rate remains at 35%, and the exemption amount increases to $5,120,000.

ANNUAL GIFT TAX EXCLUSION remains at $13,000.

ADOPTION TAX CREDIT decreases to $12,650 for adoption of an eligible child.

ALTERNATIVE MINIMUM TAX (AMT) exemption decreases to $33,750 for singles and to $45,000 for married couples.  Over the past few years this has been increased at the last minute, so there may be hope of an increase, but you should use the exemption amounts state here when planning your 2012 tax liability.

* You have until April 17 to make a tax-deductible IRA contribution for 2011. If you qualify, you could contribute up to $5,000 and have it count as a deduction against last year’s taxes. If you were 50 years old or older last year, your maximum contribution is $6,000.

* Even if you’ve already made your 2011 contribution to a Roth IRA, it may not be too late to make a change. You may be able to recharacterize your contribution as a traditional IRA contribution and take the deduction. You’ll need to set up a traditional IRA, make a trustee-to-trustee transfer, and report it on your 2011 tax return. Get details before you try this to make sure you avoid any tax traps.

*If you’re self-employed, there’s still time to set up a SEP-IRA for your business. You have until the due date of your return, including extensions, to set up the plan and make a contribution from 2011 earnings. SEP-IRAs are relatively easy to establish and flexible to manage.

Contact our office if you’re interested in any of these ideas. We can help determine whether you qualify and guide you through the process.