Wednesday, August 29, 2007

New service from the IRS -- verifying Social Security information and identities

The IRS now has a website that allows employers to verify social security numbers and match them to the correct names. The announcement from the IRS with links is below:

"Use the Social Security Number Verification Service to verify your employee names and SSNs match Social Security's records. "

This should be a nice feature for small business owners that need a fast way to accomplish this with new employees.

For small business advice, contact Peterson & Swearingen, LLC at 979-680-9993 or through our website,

Tuesday, August 21, 2007

In the News -- Chris Peterson

Chris Peterson was recently reelected as the President of the Bryan Business Council. The BBC is a 7 member committee that advises the City on economic development initiatives within the City. The following are 2 recent articles from the local newspaper, The Eagle. Click on the links below:

July 22, 2007 article

July 25, 2007 article

If we can help you bring a business to the Bryan/College Station area, please contact us at 979-680-9993 and our website,

Friday, July 20, 2007

Should I use a Living Trust or a Will?

Both living trusts and wills are used to accomplish the same thing -- transfer your assets on your death. Thus, there is no right or wrong answer to this question, at least in Texas. For the most part, the costs to probate in Texas are not very great (unlike many other states), which is why there is no right or wrong answer.

For the most part, we recommend doing wills rather than living trusts. Living trusts require the re-titling of certain assets and careful adherence to the trust document. Most clients do not like keeping up with these issues, so a will is more easy to manage.

There is one specific situation in which a living trust is clearly the right choice. If you have property in more than one state, a living trust is better than a will. By using a living trust, you can avoid having multiple probates (one in each state).

If you need help in preparing your will or living trust, please contact Peterson & Swearingen, LLC through our website ( or at 979-680-9993.

Wednesday, July 11, 2007

What changes were made to the minimum wage law?

The Fair Labor Standards Act increases the federal minimum wage in three steps:

July 24, 2007, $5.85 per hour

July 24, 2008, $6.55 per hour

July 24, 2009, $7.25 per hour

See the U.S. Department of Labor’s Wage and Hour Web site or call the DOL toll-free help line at 1-866-4US-Wage (487-9243) for more information and a copy of the poster every employer with employees subject to the Fair Labor Standard Act’s minimum wage provisions is required to display at their business.

For any legal matter involving your business, please contact Peterson & Swearingen, LLC at 979-680-9993 or through our website

Wednesday, June 27, 2007

In the News -- Chris Peterson

The Burton Creek TIF (TIRZ #19) was approved by the Bryan City Council in a meeting on June 26, 2007. To read more about the final vote, see the article from the Bryan-College Station Eagle from June 27, 2007. Once again, Chris Peterson represented the developer, Burton Creek Development, Ltd., before the City Council.

If you need help with a real estate project, please contact us at 979-680-9993 or through our website, Brazos

Do I geta tax break for officing at home?

Yes, you can but it is subject to certain rules. The IRS website generally explains them as follows:

"If you use a portion of your home regularly and exclusively for business purposes, you may be able to take a percentage of your expenses as a home office deduction. Expenses may include the business portion of real estate taxes, mortgage interest, rent, utilities, insurance, depreciation, painting and repairs."

Related Links from the IRS:
Publication 587, Business Use of Your Home
Form 8829, Expenses for Business Use of Your Home
Form 8829 Instructions
FS-2006-25, Home Office Deduction Reminders
Publication 4035, Home-Based Business Tax Avoidance Schemes

For all of your business' legal needs, contact Peterson & Swearingen, LLC at 979-680-9993 or through our website,

Monday, June 18, 2007

Are Limited Liability Partnerships really required to have insurance?

Absolutely yes! The San Antonio Court of Appeals recently concluded that individual LLP partners were personally liable on a commercial lease because the LLP failed to comply with the requirement that it carry insurance covering errors, omissions, negligence, incompetence, or malfeasance. (Edward B. Elmer, M.D., P.A. v. Santa Fe Properties, Inc., No. 04-05-00821-CV, 2006 WL 3612359 (Tex.App.--San Antonio Dec. 13, 2006, no pet. h.)). This decision was made despite the fact that one of the partners did have insurance. The court focused on the fact that the partnership itself was not a named insured under the policy. Thus, if you have an LLP, you need to make sure that the LLP is covered by a qualified policy. The individual partners will probably also want to be named on the policy too.

For all of your partnership needs, contact Peterson & Swearingen, LLC at 979-680-9993 or through our website,

Wednesday, June 13, 2007

In the News: Chris Peterson

Today, the Eagle again featured a story on Chris Peterson and the City of Bryan's Tax Increment Reinvestment Zone #19. Chris is representing Burton Creek Development, Ltd. in its planned development near the Bryan Post Office. For the complete story, click here.

If you have a real estate development project and need legal help, please contact us at 979-680-9993 or through our website,

Saturday, June 09, 2007

I sold my home for a profit. Do I have to pay taxes on that?

If you sell your home, you may be able to exclude from income any gain (the amount of your profit) up to a limit of $250,000 ($500,000 on a joint return in most cases). To exclude the gain:

1. You must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date of sale.

2. You must not have, within the past 2 years, sold another home at a gain and excluded all or part of that gain.

If you cannot exclude gain, you must include it in income.

To determine the maximum dollar limit you can exclude and for additional information, refer to IRS Publication 523.

Unfortunately, you cannot deduct a loss on the sale of your home.

For any real estate need, please contact Chris Peterson at 979-680-9993 or

Wednesday, June 06, 2007

How do we report taxes for a small business owned by my husband and I?

New legislatiev changes by Congress have simplified this procedure. The following article is from the IRS website and explains these changes.

"Legislation signed last week simplifies reporting for husband and wife owned businesses.
The new law, effective for tax years beginning after Dec. 31, 2006, allows a husband and wife who file a joint return to elect to report income or losses in proportion to their interest in the business and not as a partnership.

"The husband and wife must be the sole owners of the business and both spouses must materially participate in the business to make this election.

"See page 10 of the technical explanation of the Small Business and Work Opportunity Tax Act Of 2007 for more information on the Section 8215, Family Business Tax Simplification."

If you are a small business owner and need legal advice or help in starting up, please contact us at 979-680-9993 or via our website,

Friday, June 01, 2007

Where can I find information on housing options for my parents?

Another lawyer sent me a link the other day to an internet comparison of nursing homes. It has some basic information comparing types of independent living, assisted living, and nursing home facilities. Click here for that website,

Also, you will want to check out the Texas Department of Aging and Disability Services (DADS) website for more information, including consumer complaints about particular advisers.

For more information about elder law issues, check out our website, If we can be of assistance to you and your family, please contact us.

What is the plan for growth and development on the east side of College Station, Texas?

Since we are located in College Station, Texas, we get asked this question a bunch. College Station, which is home to Texas A&M University, is booming. This surge in jobs, residents and development has led to a myriad of traffic problems not previously seen here. However, there has been a plan proposed by a traffic consultant hired by the City. The plan extensively changes traffic patterns in east College Station, and will lay the groundwork for future subdivision and retail development in that area of town. The report can be found by clicking here.

If you are planning to develop land in College Station, please contact us if we can be of assistance. Our website is

What can I depreciate in my business?

The rules for what can or has to be depreciated are promulgated by the Internal Revenue Service. The following is an explanation from the IRS about the general rule on depreciation:

"In general, if business property is expected to last more than one year, the entire cost cannot be deducted as a business expense in the year you place it into service. It must be depreciated over the property’s useful life (as defined by the Internal Revenue Code). Most types of tangible property (except land) such as buildings, machinery, vehicles, furniture, and equipment are depreciable. Likewise, certain intangible properties such as patents, copyrights, and computer software are depreciable.

"You can elect to recover all or part of the cost of certain qualifying property (not buildings), up to a limit, by deducting it in the year you place the property in service. This is the section 179 deduction.

"Related Links:
FS-2006-27, Depreciation Reminders
Publication 946, How to Depreciate Property "

For more help with small business questions, please contact us or check our website,

Thursday, May 31, 2007

How often do I have to pay my employees?

The Texas Payday Law ("Texas Payment of Wages Act") governs how and when employees of private employers get paid. Executives and professionals (like lawyers or doctors) must be paid at least once per month (i.e. monthly). All other employees must be paid at least twice per month. Each pay period should include about the same number of days. Therefore, most employers pay on a set schedule like biweekly, semimonthly or weekly.

If you have other small business questions, please feel free to contact us through our website,, if we can be of assistance.

Wednesday, May 30, 2007

I just started a business. What does it mean that I have to pick an "accounting year" and "accounting method?"

This is often confusing for folks who are just starting a business. The IRS website helps explain the different options available:

"All taxpayers – including small businesses – must report income and expenses on an annual basis.

"The most common accounting period is the calendar year – January 1 through December 31.
The other option is a fiscal year which is 12 consecutive months ending on the last day of any month except December – for example July 1 through June 30.

"An accounting method must also be established and generally does not change.
The most common is the cash method where you report income in the tax year you receive it and deduct expenses in the tax year you pay them.

"Another option is the accrual method where you report income in the tax year you earn it, and deduct expenses in the tax year you incur them, regardless of when payment is made.

"Related Links:
Publication 538, Accounting Periods and Methods
Tax Years "

I usually suggest that most small business owners use a cash accounting method and a calendar year because these are the same method and year that are usually used for personal income tax returns.

As always, feel free to contact us through our website,

Tuesday, May 22, 2007

Can I collect a real estate commission?

In Texas, only a licensed real estate agent or a licensed attorney can collect a real estate commission. Chapter 1101 of the Texas Occupations Code specifies as follows:



(b) A person may not maintain an action to collect compensation for an act as a broker or salesperson that is performed in this state unless the person alleges and proves that the person was:

(1) a license holder at the time the act was commenced; or

(2) an attorney licensed in any state.

To find out more about becoming a licensed real estate agent, check out the Occupations Code, Chapter 1101 or the Texas Real Estate Commission website.

To find out more about Peterson & Swearingen, click here.

Thursday, May 17, 2007

Veterans Long Term Care Benefits

The following article from the National Care Planning Network gives a good summary of the programs available:

The Department of Veterans Affairs provides three types of long term care benefits for veterans.

The first type is benefits provided to veterans who have service-connected disabilities. These medically necessary services include home care, hospice, respite care, assisted living, domiciliary care, geriatric assessments and nursing home care. In order to receive the services, a veteran must be enrolled in VA's health care system. Veterans with service-connected disabilities have priority for health care enrollment acceptance.

Some of these services may be offered to veterans in the health care system who do not have service-connected disabilities but who may qualify because of low income or because they are receiving pension income from VA. These recipients may have to provide out-of-pocket co-pays or the services may only be available if the regional hospital has funds to cover them.
Currently, veterans desiring to join the health care system may be refused application because their income is too high or they do not qualify under other enrollment criteria. Increased demand in recent years for services and lack of congressional funding have forced VA to allow only certain classes of veterans to join the health care system.

The second type of benefit is state veterans homes. The Veterans Administration in conjunction with the states helps build and support state veterans homes. Money is provided by the Federal Government to help with construction, and a subsidy of a little more than $63 a day is provided for each veteran using these nursing homes. These homes are generally available for any veteran and sometimes the nonveteran spouse and are run by the states, often with the help of contract management. There may be waiting lists in some states.

Most state homes offer nursing home care but some may offer assisted living, domiciliary (a form of supported independent living), and adult day care.

State veterans homes are not free but are subsidized and the cost could be significantly less than a comparable facility in the private sector. Some of these homes can accept Medicaid payments.
The third type of benefits for veterans is disability payments. These include Compensation, Pension, survivors death benefits associated with compensation and Death Pension.
Compensation is designed to award the veteran a certain amount of monthly income to compensate for potential loss of income in the private sector due to a disability or injury or illness incurred in the service. In order to receive compensation a veteran has to have evidence of a service-connected disability. Most veterans who are receiving this benefit were awarded an amount based on a percentage of disability when they left the service.

However, some veterans may have record of being exposed to extreme cold, having an in-service non-disabling injury, having tropical diseases, tuberculosis or other incidents or exposures that at the time may not have caused any disability but years later have resulted in medical problems. In addition, some veterans may be receiving compensation but their condition has worsened and they may qualify for a a higher disability rating. Veterans mentioned above may qualify for a first-time benefit or receive an increase in compensation amount. Applications should be made to see if they can receive an award. There is no income or asset test for compensation and the benefit is nontaxable.

Pension is available to all active-duty veterans who served at least 90 days during a period of war. There is no need to have a service-connected disability to receive pension. To be eligible the applicant must be totally disabled if he or she is younger than 65. Proof of disability is not required for applicants age 65 or over. Apparently, being old is evidence in itself of disability.
The purpose of this benefit is to provide supplemental income to disabled or older veterans who have a low income. If the veterans income exceeds the pension amount then there is no award. However, income can be adjusted for unreimbursed medical expenses and this allows veterans with household income larger than the pension amount to qualify for a monthly benefit.

Compensation and pension claims are submitted on the same form and VA will consider paying either benefit. Generally, for applications associated with the cost of home care, assisted living or nursing home care, the pension benefit is a better option.All active-duty veterans who served at least 90 days during a period of war are eligible for pension and additional disability allowances -- aid and attendance or housebound allowances. Surviving single spouses of these veterans are also eligible for lesser benefits and for the allowances.

Veterans' service would include World War II, the Korean Conflict, the Vietnam Conflict Period and the Gulf War conflict.

Pension can pay up to $1,800 a month to help offset the costs associated with home care, assisted living, nursing homes and other unreimbursed medical expenses. The amount of payment varies with the type of care, recipient income and the marital status of the recipient. There are income and asset tests to qualify.

VA claims this benefit is only for low income veterans but a quirk in the way the benefit is calculated for recurring medical expenses (long term care costs associated with home care, assisted living or nursing homes) could allow veteran households earning between $2,500 and $5,000 or more a month to qualify.

Estimates are that up to 30% of all Americans over the age of 65 might be eligible for a pension benefit.

Wednesday, May 16, 2007

Where should I go for tax return preparation?

We use a certified public accountant in our local area who commonly deals with small business owners. However, there is no right or wrong answer to this question. The IRS website does offer some very practical tips on choosing a tax preparer. They recommend the following:
  • A paid preparer must sign the return as required by law.
  • Avoid preparers who claim they can obtain larger refunds than other preparers. If your returns are prepared correctly, every preparer should derive substantially similar numbers.
  • Beware of a preparer who guarantees results or who bases fees on a percentage of the amount of the refund. A practitioner may not charge a contingent fee (percentage of your refund) for preparing an original tax return.
  • Understand that the most reputable preparers will request to see your receipts and will ask you multiple questions to determine your qualifications for expenses, deductions and other items. By doing so they have your best interest in mind and are trying to help you avoid penalties, interest or additional taxes that could result from an IRS examination.
  • Choose a preparer you will be able to contact and one who will be responsive to your needs. Ask who will actually prepare the return before engaging services. Avoid firms where your work may be delegated down to someone with less training or some unknown worker. You should know exactly who works with your tax matters at all times and how to contact him or her; after all, you are paying for it. Determine if the preparer is exporting your return to a foreign country for preparation. Foreign countries do not have the same security and privacy laws as the United States nor is there any recourse should your information be compromised as a result of lax or nonexistent privacy procedures.
  • Investigate whether the preparer has any questionable history with the Better Business Bureau, the state’s board of accountancy for CPAs, the state’s bar association for attorneys or the IRS Office of Professional Responsibility (OPR) for enrolled agents.
  • Determine if the preparer’s credentials meet your needs. Is he or she an Enrolled Agent, Certified Public Accountant (CPA) or Tax Attorney? Only attorneys, CPAs and enrolled agents can represent taxpayers before the IRS in all matters including audits, collection actions and appeals. Other return preparers may represent taxpayers only in audits regarding a return that they signed as a preparer.
  • Find out if the preparer is affiliated with a professional organization that provides or requires its members to pursue continuing education and holds them accountable to a code of ethics.
  • Check for information regarding abusive shelters and other tax schemes and scams. Remember, if it sounds too good to be true, chances are it is.
  • The IRS can help many taxpayers prepare their own returns without the assistance of a paid preparer. Before seeking a paid preparer, taxpayers might consider how much information is available directly from the IRS through the IRS Web site.

For the full article from the IRS website, click here.

As always, please feel free to contact us through our website,, if we can be of assistance.