The State of Michigan will be looking over your shoulder when you sell that used car

When you buy a used car in the state of Michigan, and transfer the title, the Sate collects sales tax based on what the buyer writes down.  Until now, Michigan has never really challenged what the car buyer writes down.

This appears to be coming to an end.

 The forms that I have attached below show that Michigan is going to be using a database that will compare the value of your car too the amount that you report in the title transfer.

As you can see, there doesn't appear to be a lot of wiggle room if you purchase a car for less than market value.

You will need to be prepared to explain your bargain purchase.

The State is moving more and more to the guilty until proven innocent policy when it comes to collecting taxes.  This appears to be another simple revenue generater that is mechanical and requires little human intervention.

Doug Zandstra CPA CFE EA

Certified Public Accountant

Certified Fraud Examiner

Enrolled Agent

29 Pearl St NW, Ste 225

Grand Rapids, MI  49503616 970 3000

dougzandstra.com

email doug@dougzandstra.com

Forms for Setting up your Business in Michigan

Here are some helpful links to the forms that are needed to set up  your Michigan L.L.C. or your Michigan Corporation.  This is not intended to replace the advice of an attorney.

Michigan has 2 basic for-profit, business structures.  L.A.R.A. has some information about them.

1.  L.L.C. 

Michigan LLC Act

• Michigan LLC registration forms are located <HERE>

2.  Corporation - 

Michigan Corporation Act

• Michigan Corporation registration forms are <HERE>

3.  Michigan Sales Use and Withholdings Tax

Forms used to registering for Michigan Sales, Use and Withholding Taxes are <HERE>  

4.  Federal Registration 

Forms used to register for your Federal Identification Number are online  <HERE>

5.  S Corporation Elections

Forms that you use to make your S-Corporation Election are online <HERE>

I recommend consulting with an attorney for these matters.

Doug Zandstra CPA CFE EA

Certified Public Accountant

Certified Fraud Examiner

Enrolled Agent

29 Pearl St NW, Ste 225

Grand Rapids, MI  49503616 970 3000

dougzandstra.com

email doug@dougzandstra.com

Attn Michigan Real Estate Professionals HB 4173

HB 4173 - PA 217 Signed into law 12/15/15

Real Estate Transfer Tax Exemption

If you sold a principal residence after June 24, 2011 and the tax assessed value at the time of sale was less than the year you bought the house you may be eligible for a refund of some of your transfer taxes, 

Michigan homeowners can claim an exemption from the State Real Estate Transfer Tax Act assessment of $7.50 for every $1,000 in value that was sold. In order to claim the exemption, 3 conditions must be met at the time of sale:

1. The property must be claimed as the seller’s principal residence.
2. The tax assessed value of the property (or, state equalized value “SEV”) must be lower in the year of the sale than the year in which the property was purchased.
3. The property was sold for a price in which a willing buyer and a willing seller would arrive through arm’s length transactions.

Use form MI 2796

Doug Zandstra CPA CFE EA

Certified Public Accountant

Certified Fraud Examiner

Enrolled Agent

29 Pearl St NW, Ste 225

Grand Rapids, MI  49503616 970 3000

dougzandstra.com

email doug@dougzandstra.com

About filing 1099-Misc

1099-Misc Basics

If you are a business owner and hired independent contractors during the year, you may have to issue them form 1099 Misc.

This is a method that the IRS uses to make sure that the income is then reported by the contractor.

You also need to send a copy to the IRS.

The rules boil down to this:

If you own a business and you paid a contractor of $600 or more, you are required to file a 1099 Misc

There is an exception, and that is if the contractor is a Corporation, then you do not need to prepare the form

Also, any payments to an attorney - this would suggest that the IRS officially does not trust attorney's must be reported

Do not include payments for materials, 1099's should be for services provided only.

Filing these forms has become easier over the years.  You can find a firm that prepares these forms for you at:

http://www.efilingplus.com/

By Doug Zandstra CPA EA

Certified Public Accountant

Enrolled Agent

29 Pearl St NW, Ste 225

Grand Rapids, MI  49503616 970 3000

dougzandstra.com

email doug@dougzandstra.com

Affordable Care Compliant Health, Dental, Vision Short-Term Disability and Life Insurance Quotes

The Affordable Care Act is now in full effect.  It is complicated.  Now everyone is required to have a minimum amount of health insurance, you need options.

We have a viable option for you to meet the standards and avoid the penalties for not having health care.

Get a quote online by using the ling below

http://drakehealth.com/site/svc/egateway?sid=90224

By Doug Zandstra CPA EA

Certified Public Accountant

Enrolled Agent

29 Pearl St NW, Ste 225

Grand Rapids, MI  49503

616 970 3000

dougzandstra.com

email doug@dougzandstra.com

If You Owe Back Taxes, Your Passport Can Be Revoked

The Transportation Funding Act of 2015 has a unique provision.

Embedded deep within H.R. 22 is a provision that can cause taxpayers a bit of a headache.  Basically it says that the IRS can notify the Secretary of State if a taxpayer has an outstanding balance of more than $50,000, then the Secretary of State has broad authority to change the status of a taxpayer's passport, including revoking a taxpayer's passport.

There is additional language describing exceptions, which includes a payment agreement, etc..  But if the IRS has filed a lien and you are not making payments, you will probably not be able to travel outside of the US.

This could have some implications for some folks, causing some serious headaches.

By Doug Zandstra CPA EA

Certified Public Accountant

Enrolled Agent

29 Pearl St NW, Ste 225

Grand Rapids, MI  49503616 970 3000

dougzandstra.com

email doug@dougzandstra.com

Winding Down our Bookkeeping Practice

We maintain one of the best reputations in Grand Rapids for our work, we have numerous testimonials and referral work to attest to that.

Additionally Doug Zandstra has recently been named as on of the top 10 CPAs in Grand Rapids Michigan <<LINK>> 

With the expansion of our tax, contract controller, litigation support and forensic practice, we have no choice but to eliminate some of our services.

We are still working with businesses that have in house bookkeepers, however we are no longer offering bookkeeping assistance.

We are referring all of our bookkeeping work to a local reputable bookkeeper; Mike Jager

Mike has worked for a number of West Michigan companies with nearly 25 years of Accounting and Finance experience and over 15 years of supervisor and leadership responsibilities. His experience is mainly in the service industry with work in the health care, government and non profit areas of accounting and finance. Mike's work has been highlighted by strong customer service and people skills as well as working with a high degree of integrity and attention to detail. Recently, he has over 18 months of work experience with small business and non profits performing pre audit and pre tax work prior to company audit and tax completion. If you need bank reconciliation, book keeping and an experienced professional, he can help. He specializes in QuickBooks and Sage accounting software.

Email: mtjllc@gmail.com

By Doug Zandstra CPA EA

Certified Public Accountant

Enrolled Agent

29 Pearl St NW, Ste 225

Grand Rapids, MI  49503616 970 3000

dougzandstra.com

email doug@dougzandstra.com