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“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.
Effective April 1, 2013
Voters approved a number of sales and use tax rate increases effective April 1, 2013. The table below shows the new rate for each of the cities and counties.
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Looking for a way to reduce your 2012 income? Those who are older than 70 1/2 have an opportunity to make charitable contributions from their qualified individual retirement accounts and have it excluded from 2012 income. Here is what you need to know.
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During the wee hours of January 1, 2013 the final touches were made to 2012 tax laws. While the rest of us could not realistically make plans during 2012 for laws passed in 2013, perhaps there is a clause or two that may help you when you file your taxes in the next few months. Here is what you need to know:
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When you receive your initial paycheck for 2013 you had better take a close look to see what the payroll department has done with your pay. If you do not, you may be in for a big tax bite at the end of the year.
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The IRS estimates that it paid out over $2 billion in fraudulent claims for refunds. While the age of e-filing and automatic deposits has sped up receiving our refunds, it has also created a tremendous identity theft problem. Thankfully, the IRS is now paying attention to this problem and is actively using their data matching programs to help catch identity thieves trying to steal your withholdings.
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You’ve loved dogs all your life so you decide to breed them and start a dog training business. Is this a business in the eyes of the IRS or a hobby? Knowing what the IRS is looking for and properly positioning your small business can save taxes and headaches if you are ever questioned by the IRS.
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Year-end is a good time to ensure you have proper documentation to substantiate your tax deductions. This is important as many banks start deleting online documentation that is over one year old.
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The IRS recently announced mileage rates to be used for travel in 2013. The Business, Medical, and Moving mileage rates increase one cent versus 2012. Unfortunately, the rate to be used for Charitable travel is unchanged because updates in this area require Congressional action. Remember to create and keep a detailed log of your applicable mileage for your qualified business, medical, moving and charitable driving. Without this documentation, your qualified deduction could be disallowed.
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If you have problems getting to sleep at night and you turn to the IRS tax code for help, you might find some vocabulary that is very foreign to words you use every day. One of the more common words used by the IRS is the term "contemporaneous". So what does it mean and why should you care?
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The devastation caused by Hurricane (now Superstorm) Sandy is widespread. And while you may not have been impacted directly by the storm, you may know of someone who was. Fortunately, the relief wheels are in motion, albeit never fast enough. In an effort to help those impacted and to help get the word out to those who may have been impacted here are some tips.
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| ♦ | Don Larsen, former New York Yankee baseball pitcher, suddenly decides to sell the uniform he wore when he pitched a perfect game during the 1956 World Series. |
| ♦ | Former NCAA basketball coach Bob Knight decides to sell all his basketball championship rings. |
| ♦ | Also up for auction:
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With kids going off to college in September, the fact of higher educational costs is now impossible to ignore. As you or your child navigate campus, you are now in position to start navigating the possible tax implications of your new-found college expense. Outlined here are three of the more popular ways to reduce your taxes in 2012 as a result of this educational expense burden.
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What you don't know could cost you
While most interest expense is no longer tax deductible, it is a viable deduction if the interest is on your primary or secondary residence. While limits apply, the use of a secondary loan on your primary or secondary residence can also qualify for interest deductibility. However, “home equity” loan interest can often lose its tax deductibility if you're not careful. Here is what you need to know.
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What to do if you miss a quarterly estimated tax payment
Many clients like to keep their Federal Tax Withholdings as low as possible to avoid the IRS having their funds interest-free throughout the year. Other taxpayers, especially those with non-payroll income, must make quarterly payments to the IRS. As long as these quarterly payments are made timely and the amount of the payments is sufficient in the eyes of the IRS you will not be subjected to underpayment penalties. However, if under paid, the IRS applies late payment penalties in addition to the income tax owed. This penalty applies even if you file your 1040 tax return on or before April 15th.
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10 ideas to maximize the benefits of your investments
Far more individuals are invested in the stock market through mutual funds than in the past. This phenomenon is due in part to the creation of many forms of tax deferred retirement savings programs such as IRAs, Roth IRAs, company sponsored 401(k) and 403(b) plans. But mutual funds also benefit from the long-standing belief that they allow investors to diversify their holdings without buying individual stocks. From a planning viewpoint, here are some great mutual fund tips. These tips assume your mutual fund investment is NOT in a retirement account unless noted.
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Can't itemize? There are still tax breaks for you
A common misconception in tax filing has been that if you use the Standard Deduction versus itemizing your deductions you have few additional benefits available to reduce your tax bill. This is often not the case.
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Tips to avoid IRS penalties on 401(k) retirement plan distributions While each retirement plan has similar early withdrawal penalty exemptions, they are not all alike. Knowing these subtle differences within 401(k) plans can create an avoidable 10% tax penalty if you take money out of the plan prior to reaching age 59 1/2. This is true because a simple roll-over of funds into an IRA is a readily available option to avoid the penalty. You should consider rolling over your 401(k) into an IRA prior to early distribution when:
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