DiSabatino CPA Blog

DiSabatino CPA Blog

A blog by Michael DiSabatino CPA with topics on Tax Savings, Business, Management and more...

Mike's weekly post usually concentrated on tax saving strategies.

2014 Health Savings Account Limits Announced

2014 Health Savings Account Limits Announced

The savings limits for the ever-popular Health Savings Accounts (HSA) are now set for 2014. The new limits are outlined here with current year amounts noted for comparison purposes.

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Triple Tax: aka The Lottery

Triple Tax: aka The Lottery

Most everyone enjoys dreaming of winning it big in the lottery. News media outlets publicize the large unclaimed pots of money on the evening news and they put a spotlight on the lucky multi-million dollar winners. Ever wonder what the tax math looks like?

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Toss This. Not That.

Toss This. Not That.
Post tax filing record retention

With a sigh you are relieved that yet another tax return has been sent off to the government. Another 12 months before you need to do this again. But before you close that tax file, there is still some work to do. If the IRS or state revenue department selects your return for review, you will need to be prepared. Here is what you need to know:

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Are You Maximizing Your Retirement Account Tax Benefit?

Are You Maximizing Your Retirement Account Tax Benefit?
2013 contribution limits increase for most major retirement plans

2013 marks a watershed year for contribution limit increases in many of the core retirement savings programs. Many of these contribution limit increases are established using a federal formula. While most annual limits stayed the same from 2011 to 2012, this is not the case for 2013. Here are current annual contribution limits for the more popular programs:

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Audit Target: The Sole Proprietor

Audit Target: The Sole Proprietor
Are you prepared?

Each year the IRS publishes their activities in a publication called the Data Book. And each year for the past number of years the number one target of audits are those tax returns with a Schedule C for small business activity. So how to prepare yourself for a possible audit? Here are some tips.

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Don't Forget Your Estimated Payment

Don't Forget Your Estimated Payment

The tax filing deadline is upon us. The sense of relief that another 1040 form is filed is like lifting a weight from your shoulders. But wait! April 15th is also the 1st quarter estimated tax due date for 2013! So how do you know if you need to place another check in the mail? Here are triggers that suggest you may wish to consider sending in a quarterly estimated tax payment.

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Still Time to Make IRA Contributions for 2012

Still Time to Make IRA Contributions for 2012

Remember you have until you file your tax return to make a contribution to a Traditional IRA or Roth IRA for the 2012 tax year.  The annual contribution limit is $5,000 or $6,000 (if you are age 50 or over).  Prior to making the contribution, if you (or your spouse) are an active participant in an employer's qualified retirement plan, you will want to make sure your modified adjusted gross income (MAGI) does not exceed certain income thresholds.  There are also MAGI (income) limits to qualify to make Roth IRA contributions.  The limits are:

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984,000 Could Lose their Tax Refund

984,000 Could Lose their Tax Refund

Last week the IRS announced it is holding $917 million in unclaimed refunds for the 2009 tax year. If the claims for these unpaid refunds are not made by April 15th the refunds will no longer be available. Here is what you need to know:

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Tax Surprises for Newly Retired

Tax Surprises for Newly Retired
5 surprises to know about

You’ve got it all planned out. Your retirement savings plans are full, you have started receiving Social Security benefits, and your Pension is ready to go. Everything is planned, what could go wrong? Here are five surprises that can turn your plan on a dime.

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Is Being Effective Better Than Being Marginal?

Is Being Effective Better Than Being Marginal?
Understanding the difference between these two tax rates

The tax code is filled with terms we rarely use in everyday conversation. Two of the more common are Marginal Tax Rates and Effective Tax Rates. Knowing what they mean can help you think differently about your potential tax obligation.

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Often Overlooked Medical Expense Deductions

Often Overlooked Medical Expense Deductions
Avoid taking the easy way out

To take your medical expense deduction in 2012 your allowable expenses must exceed 7.5% of your Adjusted Gross Income (AGI). In 2013 and beyond, unless you are 65 or older, this amount goes up to 10% of AGI. So why bother? You might be surprised at how much this expense might be. Here are some tips:

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Avoid Common Tax Filing Mistakes

Avoid Common Tax Filing Mistakes

With the backlog of tax return filing due to late changing tax laws, want to ensure your refund gets to you in the shortest amount of time? More importantly, how can you avoid receiving a letter from the IRS? Here are some of the most common tax filing mistakes:

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Don't Die Here

Don't Die Here
Estate tax surprises at state level

Recently passed federal legislation increased the exemption amount before your estate pays taxes on your assets when you die. The amount for 2013 is $5.25 million. This makes most of our estates tax-free when we die. Or does it?

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Are My Social Security Benefits Taxable?

Are My Social Security Benefits Taxable?
Don't be surprised at tax time

When it comes to retirement many Americans believe they can count on their full Social Security benefits as a core element of income. You can imagine the surprise at tax-time when some of these same benefits are returned to the Federal Government in the form of benefit reduction and taxation. Here is what you need to know.

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Time to Think About Commuting

Time to Think About Commuting
Don't leave this benefit on the table

$3.40 to $4.00 per gallon gas prices are quickly becoming the new norm. Congress and the President appear to be doing very little to control this inflationary cost. What can you do? Thankfully there are commuting benefits that can lower your cost of getting to and from work during 2013.

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IRS Delays E-Filing of Return

Electronic Filing Opens For Business Tax Returns February 4th

Description

Filing this year has been delayed due to the Fiscal Cliff adjustments made in January, that took the IRS by surprise.  Electronic Filing will open February 4th at 9AM Eastern time to receive electronically filed Federal and state Business returns (Corporate 1120, S-Corporation 1120S, and Partnership 1065). The opening will coincide with the IRS opening their system to receive and begin processing Business TY12 returns.

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Educational Credits Fail IRS Test

Educational Credits Fail IRS Test
More return processing delays




If you have a tax return that will utilize a number of common educational credits, your tax return cannot be processed by the IRS until mid-February.  Affected tax returns include any provisions found on Form 8863 and include:

  • The American Opportunity Tax Credit
  • The Lifetime Learning Credit
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New Safe Harbor for Home Offices

New Safe Harbor for Home Offices




Beginning in 2013 there is a simplified way to take a home office expense for a portion of your home. This new 'safe-harbor' option greatly simplifies how to record valid expenses for business use of your home. Here is how it works.

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Tax Filing Season Starts January 30th

 

Tax Filing Season Starts January 30th
A late start due to late law passage

“We have worked hard to open tax season as soon as possible.”

- Acting IRS Commissioner Steven T. Miller

The IRS recently announced that it is targeting January 30th as the first day it will begin processing 2012 tax returns. This delay in filing is due to the late passage of the Tax Relief Act during the first week of January. Here is what you need to know.

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New Sales and Use Tax Rates

California State Board of Equalization Special Notice
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