If you gave money or property to someone as a gift, you may owe federal gift tax. Many gifts are not subject to the gift tax, but the IRS offers the following eight tips about gifts and the gift tax.

1. Most gifts are not subject to the gift tax. For example, there is usually no tax if you make a gift to your spouse or to a charity. If you make a gift to someone else, the gift tax usually does not apply until the value of the gifts you give that person exceeds the annual exclusion for the year. For 2011 and 2012, the annual exclusion is $13,000.

2. Gift tax returns do not need to be filed unless you give someone, other than your spouse, money or property worth more than the annual exclusion for that year.

3. Generally, the person who receives your gift will not have to pay any federal gift tax because of it. Also, that person will not have to pay income tax on the value of the gift received.

4. Making a gift does not ordinarily affect your federal income tax. You cannot deduct the value of gifts you make (other than deductible charitable contributions).

5. The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. The following gifts are not taxable gifts:

• Gifts that are do not exceed the annual exclusion for the calendar year.

• Tuition or medical expenses you pay directly to a medical or educational institution for someone.

• Gifts to your spouse.

• Gifts to a political organization for its use.

• Gifts to charities.

6. You and your spouse can make a gift up to $26,000 to a third party without making a taxable gift.The gift can be considered as made one-half by you and one-half by your spouse. If you split a gift you made, you must file a gift tax return to show that you and your spouse agree to use gift splitting. You must file a Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, even if half of the split gift is less than the annual exclusion.

7. You must file a gift tax return on Form 709, if any of the following apply:

• You gave gifts to at least one person (other than your spouse) that are more than the annual exclusion for the year.

• You and your spouse are splitting a gift.

• You gave someone (other than your spouse) a gift of a future interest that he or she cannot actually possess, enjoy, or receive income from until some time in the future.

• You gave your spouse an interest in property that will terminate due to a future event.

8. You do not have to file a gift tax return to report gifts to political organizations and gifts made by paying someone’s tuition or medical expenses. For more information see Publication 950, Introduction to Estate and Gift Taxes. Both Form 709 and Publication 950   are available at www.IRS.gov or by calling 800-TAX-FORM (800-829-3676).

You may need to pay estimated taxes to the IRS during the year if you have income that is not subject to withholding. This depends on what you do for a living and the types of income you receive.

These six tips from the IRS explain estimated taxes and how to pay them.

1. If you have income from sources such as self-employment, interest, dividends, alimony, rent, gains from the sales of assets, prizes or awards, then you may have to pay estimated tax.

2. As a general rule, you must pay estimated taxes in 2012 if both of these statements apply: 1) You expect to owe at least $1,000 in tax after subtracting your tax withholding (if you have any) and tax credits, and 2) You expect your withholding and credits to be less than the smaller of 90 percent of your 2012 taxes or 100 percent of the tax on your 2011 return. Special rules apply for farmers, fishermen, certain household employers and certain higher income taxpayers.

3. For Sole Proprietors, Partners and S Corporation shareholders, you generally have to make estimated tax payments if you expect to owe $1,000 or more in tax when you file your return.

4. To figure your estimated tax, include your expected gross income, taxable income, taxes, deductions and credits for the year. Use the worksheet in Form 1040-ES, Estimated Tax for Individuals, for this. You want to be as accurate as possible to avoid penalties. Also, consider changes in your situation and recent tax law changes.

5. The year is divided into four payment periods, or due dates, for estimated tax purposes. Those dates generally are April 15, June 15, Sept. 15 and Jan. 15 of the next or following year.

6. Form 1040-ES, Estimated Tax for Individuals, has everything you need to pay estimated taxes. It includes instructions, worksheets, schedules and payment vouchers. However, the easiest way to pay estimated taxes is electronically through the Electronic Federal Tax Payment System, or EFTPS, at www.irs.gov. You can also pay estimated taxes by check or money order using the Estimated Tax Payment Voucher or by credit or debit card.

For more information on estimated taxes, refer to Form 1040-ES and its instructions and Publication 505, Tax Withholding and Estimated Tax. These forms and publications are available at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

If you make a mistake on your tax return, it can take longer to process, which in turn, may delay your refund. Here are eight common errors to avoid.

1. Incorrect or missing Social Security numbers When entering SSNs for anyone listed on your tax return, be sure to enter them exactly as they appear on the Social Security cards.

2. Incorrect or misspelling of dependent’s last name When entering a dependent’s last name on your tax return, make sure to enter it exactly as it appears on their Social Security card.

3. Filing status errors Choose the correct filing status for your situation. There are five filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household and Qualifying Widow(er) With Dependent Child. See Publication 501, Exemptions, Standard Deduction and Filing Information, to determine the filing status that best fits your situation.

4. Math errors When preparing paper returns, review all math for accuracy. Or file electronically; the software does the math for you!

5. Computation errors Take your time. Many taxpayers make mistakes when figuring their taxable income, withholding and estimated tax payments, Earned Income Tax Credit, Standard Deduction for age 65 or over or blind, the taxable amount of Social Security benefits and the Child and Dependent Care Credit.

6. Incorrect bank account numbers for direct deposit Double check your bank routing and account numbers if you are using direct deposit for your refund.

7. Forgetting to sign and date the return An unsigned tax return is like an unsigned check—it is invalid. Also, both spouses must sign a joint return.

8. Incorrect adjusted gross income If you file electronically, you must sign the return electronically using a Personal Identification Number. To verify your identity, the software will prompt you to enter your AGI from your originally filed 2010 federal income tax return or last year’s PIN if you e-filed. Taxpayers should not use an AGI amount from an amended return, Form 1040X, or a math-error correction made by IRS.

Past due financial obligations can affect your current federal tax refund. The Department of Treasury’s Financial Management Service, which issues IRS tax refunds, can use part or all of your federal tax refund to satisfy certain unpaid debts.

Here are eight important facts the IRS wants you to know about tax refund offsets:

1. If you owe federal or state income taxes, your refund will be offset to pay those taxes. If you had other debt such as child support or student loan debt that was submitted for offset, FMS will apply as much of your refund as is needed to pay off the debt and then issue any remaining refund to you.

2. You will receive a notice if an offset occurs. The notice will include the original refund amount, your offset amount, the agency receiving the payment and its contact information.

3. If you believe you do not owe the debt or you are disputing the amount taken from your refund, you should contact the agency shown on the notice, not the IRS.

4. If you filed a joint return and you’re not responsible for the debt, but you are entitled to a portion of the refund, you may request your portion of the refund by filing IRS Form 8379, Injured Spouse Allocation. Attach Form 8379 to your original Form 1040, Form 1040A, or Form 1040EZ or file it by itself after you are notified of an offset. Form 8379 can be downloaded from the IRS website at www.irs.gov.

5. You can file Form 8379 electronically. If you file a paper tax return you can include Form 8379 with your return, write “INJURED SPOUSE” at the top left of the Form 1040, 1040A or 1040EZ. IRS will process your allocation request before an offset occurs.

6. If you are filing Form 8379 by itself, it must show both spouses’ Social Security numbers in the same order as they appeared on your income tax return. You, the “injured” spouse, must sign the form. Do not attach the previously filed Form 1040 to the Form 8379. Send Form 8379 to the IRS Service Center where you filed your original return.

7. The IRS will compute the injured spouse’s share of the joint return. Contact the IRS only if your original refund amount shown on the FMS offset notice differs from the refund amount shown on your tax return.

8. Follow the instructions on Form 8379 carefully and be sure to attach the required forms to avoid delays. If you don’t receive a notice, contact the Financial Management Service at 800-304-3107, Monday through Friday from 7:30 a.m. to 5 p.m. (Central Time).

If you’re self-employed and paying for medical, dental or long-term care insurance, the IRS wants to remind you about a special tax deduction for some insurance premiums paid for you, your spouse, and your dependents.

Starting in tax year 2011, this deduction is no longer allowed on Schedule SE (Form 1040), but you can still take it on Form 1040, line 29.

You must be one of the following to qualify:

A self-employed individual with a net profit reported on Schedule C (Form 1040), Profit or Loss From Business, Schedule C-EZ (Form 1040), Net Profit From Business, or Schedule F (Form 1040), Profit or Loss From Farming.

A partner with net earnings from self-employment reported on Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc., box 14, code A.

A shareholder owning more than 2 percent of the outstanding stock of an S corporation with wages from the corporation reported on Form W-2, Wage and Tax Statement.

The insurance plan must be established under your business.

For self-employed individuals filing a Schedule C, C-EZ, or F, the policy can be either in the name of the business or in the name of the individual.

For partners, the policy can be either in the name of the partnership or in the name of the partner. You can either pay the premiums yourself or your partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business.

For more-than-2-percent shareholders, the policy can be either in the name of the S corporation or in the name of the shareholder. You can either pay the premiums yourself or your S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 as wages to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business.

For more information see IRS Publication 535, Business Expenses, available on this website or by calling 800-TAX-FORM (800-829-3676).

Some employees may be able to deduct certain work-related expenses. The following facts from the IRS can help you determine which expenses are deductible as an employee business expense. You must be itemizing deductions on IRS Schedule A to qualify.

Expenses that qualify for an itemized deduction generally include:

• Business travel away from home

• Business use of your car

• Business meals and entertainment

• Travel

• Use of your home

• Education

• Supplies

• Tools

• Miscellaneous expenses

You must keep records to prove the business expenses you deduct. For general information on recordkeeping, see IRS Publication 552, Recordkeeping for Individuals available on the IRS website at www.irs.gov, or by calling 1-800-TAX-FORM (800-829-3676).

If your employer reimburses you under an accountable plan, you should not include the payments in your gross income, and you may not deduct any of the reimbursed amounts.

An accountable plan must meet three requirements:

1. You must have paid or incurred expenses that are deductible while performing services as an employee.

2. You must adequately account to your employer for these expenses within a reasonable time period.

3. You must return any excess reimbursement or allowance within a reasonable time period.

If the plan under which you are reimbursed by your employer is non-accountable, the payments you receive should be included in the wages shown on your Form W-2. You must report the income and itemize your deductions to deduct these expenses.

Generally, you report unreimbursed expenses on IRS Form 2106 or IRS Form 2106-EZ and attach it to Form 1040. Deductible expenses are then reported on IRS Schedule A, as a miscellaneous itemized deduction subject to a rule that limits your employee business expenses deduction to the amount that exceeds 2 percent of your adjusted gross income.

For more information see IRS Publication 529, Miscellaneous Deductions, which is available on the IRS website at www.irs.gov, or by calling 1-800-TAX-FORM (800-829-3676).

The Collision Center on 14 Mile is now part of the Ed Koehn Chevrolet dealership team. Staff members pictured are: front row (L to R) Lenny Wentz, Rick Palm, Eric Montgomery; back row, Heather Odren and Jack Price.

The Collision Center on 14 Mile, just south of Cedar Springs, is now under the management of Ed Koehn Chrevrolet dealership.

Ed Koehn is a name well known and respected in West Michigan. Owners Ed and Aaron Koehn are excited with the opening of the Ed Koehn Collision Center. The Collision Center shares the same property with the Ed Koehn Chevrolet dealership that was new last year.

“We feel very fortunate to have acquired Jack Price, a lifelong resident of the area, to operate our Collision Center,” said Ed Koehn. The Collision Center was previously part of the John Decker Chevrolet dealership.

“We are now the collision facility for all four of the Ed Koehn Automotive Group dealerships, which includes Chevrolet, Ford and Chrysler,” Price said, “as well as serving those in West Michigan, regardless of make or model.”

This is the first venture into the automotive collision repair business for Koehn’s, according to Price. Experience in car repair is what Koehn’s new Collision Center prides itself on. Price brings 35 years of expertise in customer relations, insurance company relationships and business management that are focused on customer satisfaction and quality of work for customers. Heather Odren brings 11 years of experience in the collision and glass industry and carries the “Mark of Excellence Award” from General Motors. Lenny Wentz has 22 years of experience as a collision specialist, from minor scratch and dent repairs to full structural repair. Rick Palm, a fellow collision specialist, has 35 years of experience from minor scratch and dent repairs to full structural repairs including full frame vehicles using our state of the art computerized measuring system. Eric Montgomery, the Collision Center’s third specialist, has 20 years of experience with the past 16 years spent working at Ed’s Auto Body on Indian Lakes Road, serving the North Kent and Montcalm county area up until Ed Fitzpatrick retired earlier last year.

Ed Koehn’s Collision Center is at 4650 14 Mile NE (M-57) in Rockford and can be reached at (616) 866-9511 or email bodyshop@edkoehn.com or jackprice@edkoehn.com.

A lack of preparation could easily spell disaster for a business.

(NAPSI)—Despite the many risks small businesses face, many remain unprepared to handle the unexpected. One way they can minimize their risks is to create a Business Continuity Plan.

Scary Numbers

Only 6 percent of small-business owners say they’re not at all confident about being adequately protected against a disaster, according to a survey conducted by Travelers at the U.S. Chamber of Commerce America’s Small Business Summit. That same survey found that 44 percent of small businesses are operating without any type of business continuity plan, a plan designed to keep the business operating after an unexpected event.

That false sense of security and lack of preparation could easily spell disaster for a business. One- quarter of small businesses hit by a major disruption never reopen their doors, according to the Insurance Institute for Business & Home Safety. Other data suggests that even if businesses did reopen, most wouldn’t fully recover.

The Solution

A strategic business continuity plan, combined with securing the right insurance coverage, is critical in making sure a business can continue to thrive after a disaster. Policies to consider include a standard multiperil or business owner’s policy and business interruption coverage. Business owners should also talk to their agents about additional options like flood coverage.

Formulating a business continuity plan, depending on the complexity of the business, may only take a few hours and can help ensure a business lasts years after a disaster.

The plan should include everything from important phone numbers of service providers to locations of backup data. For help getting started, business owners can visit www.travelers.com for free tips on developing a plan. These plans can provide the necessary road map to assist in handling a crisis, but they work best when communicated effectively and frequently with employees. Once a business continuity plan is developed, owners should walk employees through different scenarios that can significantly affect a business and explain how to manage the consequences.

Small businesses play a vital role in helping the nation’s economic recovery. Properly protecting a small business through risk management is essential to its long-term survival.

The Cedar Chest

Cedar Chest, the resale store at 61 N. Main Street, has expanded into the storefront south of Curves. Owner Sally Howland, who has 30 years of resale experience, now offers booth rentals and an expanded furniture store to offer customer a larger variety of unique items.

According to Howland, they sell hard to find collectibles and one-of-a-kind merchandise. “Step back in time and see history and find treasures,” she said.

Cedar Chest is committed to great customer service and saving you money.  Stop in and see them today!

Hours are Monday through Friday 10 a.m. to 6 p.m. and Saturday 10 a.m. to 3 p.m. For more info call (616) 696-3876.

Sand Lake Thrifty Treasures

Starting April 6, savvy shoppers will have a new to place to find some great deals—Sand Lake Thrifty Treasures. Owners Chris and Helena Collins and their daughter, Felicia Collins, are opening the new thrift store at 53 E. Lake Street in Sand Lake. They will offer great new and used merchandise that includes furniture, appliances, household goods, clothing and jewelry. They also will offer booth rentals for customers to set up and sell their own merchandise, without the overhead expense. A unique offering is a layaway program for all merchandise.

Customer service is important to the Collins, and customers will remember them for their friendly service as previous owners of Jo Jo’s Cone Zone.

Stop in and celebrate with them on April 6, when they will be barbecuing and giving away free hotdogs!

The IRS would like you to get some credit for qualified home energy improvements this year. Perhaps you installed solar equipment or recently insulated your home? Here are two tax credits that may be available to you:

1. The Non-business Energy Property Credit Homeowners who install energy-efficient improvements may qualify for this credit. The 2011 credit is 10 percent of the cost of qualified energy-efficient improvements, up to $500. Qualifying improvements include adding insulation, energy-efficient exterior windows and doors and certain roofs. The cost of installing these items does not count. You can also claim a credit including installation costs, for certain high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass fuel. The credit has a lifetime limit of $500, of which only $200 may be used for windows. If you’ve claimed more than $500 of non-business energy property credits since 2005, you cannot claim the credit for 2011. Qualifying improvements must have been placed into service in the taxpayer’s principal residence located in the United States before Jan. 1, 2012.

2. Residential Energy Efficient Property Credit This tax credit helps individual taxpayers pay for qualified residential alternative energy equipment, such as solar hot water heaters, solar electricity equipment and wind turbines. The credit, which runs through 2016, is 30 percent of the cost of qualified property. There is no cap on the amount of credit available, except for fuel cell property. Generally, you may include labor costs when figuring the credit and you can carry forward any unused portions of this credit. Qualifying equipment must have been installed on or in connection with your home located in the United States; fuel cell property qualifies only when installed on or in connection with your main home located in the United States.

Not all energy-efficient improvements qualify so be sure you have the manufacturer’s tax credit certification statement, which can usually be found on the manufacturer’s website or with the product packaging.If you’re eligible, you can claim both of these credits on Form 5695, Residential Energy Credits when you file your 2011 federal income tax return. Also, note these are tax credits and not deductions, so they will generally reduce the amount of tax owed dollar for dollar. Finally, you may claim these credits regardless of whether you itemize deductions on IRS Schedule A.

You can find Form 5695 at www.irs.gov or order it by calling 1-800-TAX-FORM (800-829-3676).