Tax Rates Increase in 2013

• Posted on May 16, 2013

As part of the 2012 American Taxpayer Relief Act (ATRA), tax rates, both ordinary and capital gains, increased in 2013 for higher income taxpayers whose taxable income exceeds the income threshold for their filing status.
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Convert Unused Property Into a Tax Deduction

• Posted on May 14, 2013

When you give away items like clothing, appliances, vehicles, and other goods to a qualified charity, your generosity can add up to a tax write-off if you itemize your deductions. The amount of your deduction is generally the donated property's “fair market value.” The IRS definition of fair market value (FMV) is “the price a willing buyer would pay and a willing seller would accept for an item, when neither party is compelled to buy or sell and both parties have reasonable knowledge of the relevant facts.”
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Did You Overlook Something on a Prior Tax Return?

• Posted on May 9, 2013

Occasionally, clients will realize that an item of income was overlooked, a deduction was not claimed, or that an amended tax document was received after the tax return was already filed. Regardless of whether the oversight will result in more tax due or a refund, it should not be dismissed. Failing to report an item of income will most certainly generate an IRS inquiry, which typically happens a year after the original return was filed and after the interest and penalties have built up. On the other hand, if you have a refund coming, you certainly don’t want that to go by the wayside.
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Are You Collecting the Needed W-9s?

• Posted on May 7, 2013

If you use independent contractors to perform services for your business or rental that is a trade or business, and you pay them $600 or more for the year, you are required to issue them a Form 1099 after the end of the year to avoid facing the loss of the deduction for their labor and expenses. (This requirement generally does not apply for payments made to a corporation. However, the exception does not apply to payments made for attorney fees and for certain payments for medical or health care services.)
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Miss the April 15 Deadline?

• Posted on May 2, 2013

Did you miss filing your 1040 tax return by the April 15 due date? If you did, you may be accruing late filing penalties, late payment penalties, and interest. Late filers can mitigate those penalties by filing as soon as possible. There are no late filing penalties or late payment penalties if you had no tax liability (i.e., did not owe or would have gotten a refund) on April 15.
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Don’t Panic If You Receive an IRS Notice

• Posted on April 30, 2013

A letter from the IRS will probably increase your heart rate a little. Don’t panic; many of these letters can be dealt with simply and painlessly.
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Leave Your Business to Your Family - Not the Government

• Posted on April 25, 2013

Successfully passing a family business to the family upon death of the owner is not an easy task. Most business owners fail to realize the importance of a sound business succession plan. As a result, only about half of all family businesses are transferred to the next generation. A significant number are forced to look elsewhere for capital and management expertise.
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Read This Before Tossing Old Tax Records

• Posted on April 23, 2013

Now that your taxes have been completed for 2012, you are probably wondering what old records can be discarded. If you are like most taxpayers, you have records from years ago that you are afraid to throw away. It would be helpful to understand why the records must be kept in the first place.
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President’s Proposed Tax Changes for 2014

• Posted on April 18, 2013

The budget proposal released by President Obama on April 10 includes a substantial number of proposed tax changes impacting individuals, businesses, estate taxation, energy incentives, and international issues. Although these are only proposals, they provide an insight into the administration’s thinking on tax reform. An overview of the most prominent issues related to individuals and small business is provided below.
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Checking the Status of Your Federal Tax Refund is Easy

• Posted on April 16, 2013

If you already filed your federal tax return and are due a refund, you can check the status of your refund online.
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Not Able to Pay Your Taxes by the April Due Date?

• Posted on April 11, 2013

The vast majority of Americans get a tax refund from the IRS each spring, but what if you are one of those who end ends up owing?
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Last Minute Payments and Filing Tips

• Posted on April 9, 2013

If you are up against the April deadline and still need some information to complete your tax return, you can obtain a six-month automatic extension of time to file your 1040.
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Individual Estimated Tax Payments for 2013 Start Soon

• Posted on April 2, 2013

Our tax system is a “pay-as-you-go” system, and if your pre-paid amount is not enough, you become liable for non-deductible interest penalties. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the “pay-as-you-go” requirement. The primary among these include:
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Plan to Benefit from the Saver’s Credit

• Posted on March 28, 2013

The Saver’s Credit helps low- and moderate-income workers save for retirement. The Saver’s Credit helps offset part of the first $2,000 that workers voluntarily contribute to IRAs and 401(k) plans, in addition to similar workplace retirement programs. Also known as the Retirement Savings Contributions Credit, the Saver’s Credit is available in addition to any other tax savings that apply.
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Refund Statute Expiring

• Posted on March 26, 2013

If you have not yet filed your 2009 tax return and have a refund coming, time is running out! The IRS estimates that there are more than 1 million taxpayers who have not filed their 2009 tax return and that there are approximately $1 billion of unclaimed refunds available for those taxpayers. If you fall in this category, you need to act quickly because the return must be filed by April 15, 2013 to claim a refund for 2009. Otherwise, the money becomes the property of the U.S. Treasury.
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Eldercare Can Be a Medical Deduction

• Posted on March 21, 2013

With people living longer, many find themselves becoming the care provider for elderly parents, spouses and others who can no longer live independently. When this happens, questions always come up regarding the tax ramifications associated with the cost of nursing homes or in-home care.
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Do Not Overlook Form 8594 When Buying or Selling a Business

• Posted on March 19, 2013

Most businesses are made up of different types of assets, and those assets get different treatment for tax purposes. How those items are identified at the time of the sale/purchase can have a significant tax impact on both the buyer and the seller. A seller will, of course, want to designate items into classes that will yield a long-term capital gain on sale and thus provide the best tax result from the sale, whereas the buyer will generally want to designate the purchased items into classes that provide the biggest up-front write-offs.
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Beware of Bogus IRS Emails

• Posted on March 14, 2013

Every tax-filing season, the scammers and ID thieves try to sucker people into providing personal and financial information through the use of phony e-mails.
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Is Your Withholding Enough?

• Posted on March 8, 2013

Our "pay-as-you-go" tax system requires that you make payments of your tax liability evenly throughout the year. If you don't, it's possible you could owe an underpayment penalty. Some taxpayers meet the "pay-as-you-go" requirements by making quarterly estimated payments. However, when your income is primarily from wages, you meet the requirements through wage withholding and you rely on your employer's payroll department to take out the right amount of tax. Unfortunately, what payroll withholds may not be enough!
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Plan Your Taxable IRA Withdrawals

• Posted on March 7, 2013

Your age at the time that you make a taxable withdrawal from your Traditional IRA account can make a big difference in the amount of tax that you will pay. Generally, there are three periods within your lifetime where different tax rules apply:
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Charitable Away-From-Home Travel

• Posted on March 5, 2013

Charitable deductions are allowed only for travel expenses (including meals and lodging) by volunteers who do charitable work for their organization while they are away from home on the charity’s behalf. Unlike other areas of taxes, meals are not subject to the 50% limitation.
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2013 Will Hit Higher-income Taxpayers Hard

• Posted on February 28, 2013

Now that Congress has passed the American Taxpayer Relief Act of 2012 (ATRA) and avoided the so-called “fiscal cliff,” higher-income taxpayers need to brace for higher taxes. There are numerous provisions in the ATRA that don’t provide the higher-income taxpayer any relief, and when these are combined with the provisions of the 2010 Affordable Health Care Act, higher-income taxpayers will feel a significant increase in taxes for which they need to prepare.
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Energy Costs Rise as Tax Incentives Fade

• Posted on February 26, 2013

With energy costs skyrocketing, you would think that the federal government would come up with some tax incentives aimed at curbing the consumption of energy. However, on the consumer end of taxes, the incentives are actually fading away. Apparently, federal lawmakers and administrators believe the high cost of energy itself is incentive enough to reduce consumption.
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A Reminder - If You Did A Roth Conversion in 2010

• Posted on February 21, 2013

This is just a reminder that if you did a Roth Conversion in 2010 and elected to defer the tax on that conversion to 2011 and 2012, don’t forget to include one-half of the conversion taxable income on your 2012 return.
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Home Affordable Modification Program

• Posted on February 19, 2013

To help financially distressed homeowners lower their monthly mortgage payments, the Dept. of the Treasury and the Dept. of Housing and Urban Development (HUD) established HAMP. In appropriate cases, HAMP has been offering the Principal Reduction Alternative (PRA) as part of a HAMP loan modification since the last quarter of 2010. Current plans call for HAMP to continue accepting new borrowers through the end of 2013.
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Tax Tips for Recently Married Taxpayers

• Posted on February 14, 2013

If you got married during 2012, here are some post-marriage tips to help you avoid stress at tax time.
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IRS Introduces New Safe Harbor Home Office Deduction

• Posted on February 12, 2013

Effective for tax years beginning in 2013, taxpayers can elect a simplified deduction for the business use of their home. The deduction is $5 per square foot with a maximum square footage of 300. Thus, the maximum deduction is $1,500 per year. Here are the details of this simplified method:
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What to Do If You Are Missing a W-2

• Posted on February 7, 2013

Have you received all of your W-2s? These documents are essential for completing individual tax returns. You should receive a Form W-2, Wage and Tax Statement, from all of your employers each year. Employers have until January 31st to provide or send you a 2012 W-2 earnings statement, either electronically or in paper form. If you have not received your W-2, follow these steps:
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Direct Deposit Puts Your Money in Your Pocket...Faster

• Posted on February 5, 2013

Don’t wait around for a paper check. Have your federal (and state, if applicable) tax refund deposited directly into your bank account. Selecting Direct Deposit is a secure and convenient way to get your money into your pocket more rapidly.
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It Is Tax Time! Are You Ready?

• Posted on January 31, 2013

If you’re like most taxpayers, you find yourself with an ominous stack of “homework” around TAX TIME! Unfortunately, the job of pulling together the records for your tax appointment is never easy, but the effort usually pays off when it comes to the extra tax you save!
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Are You Required to File 1099s?

• Posted on January 29, 2013

If you use independent contractors to perform services for your business and you pay them $600 or more for the year, you are required to issue them a Form 1099-MISC after the end of the year to avoid facing the loss of the deduction for their labor and expenses. The 1099s for 2012 must be provided to the independent contractor no later than January 31 of 2013.
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Prepared for the New Surtax?

• Posted on January 24, 2013

As part of Obama Care, we have a new tax beginning in 2013. The official name of this tax is the “Unearned Income Medicare Contribution Tax,” and even though the name implies it is a contribution, don’t get the idea you deduct it as a charitable contribution. It is, in actuality, a surtax levied on the net investment income of higher-income taxpayers.
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Don't Forget Those Nominee 1099s

• Posted on January 22, 2013

For tax purposes, if you receive income in your name that actually belongs to someone else, you are also a nominee. Being a nominee means that you must file a 1099 form with the IRS appropriate to the type of income you received and give a copy of the 1099 to the actual owner of the income. However, if the other person is your spouse, no 1099 filing is required.
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Revising Your W-4? Seek Professional Advice.

• Posted on January 17, 2013

This time of the year, many employers will request from their employees updated W-4 forms (and the equivalent state form for those who live in a state with income tax). The W-4 form allows you to specify your filing status and the number of dependent exemptions to be used for figuring the amount of income tax to be withheld from your pay. Even though the IRS provides an on-line W-4 calculator, it is generally suitable for the more simple returns and may not be appropriate in all cases since it does not take into account all income adjustments, credits, and deductions available. Be careful when completing the W-4 form because errors can create some significant financial problems.
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Ready For a Take-Home Pay Cut?

• Posted on January 15, 2013

For two years, employees have enjoyed a 2% reduction in the FICA payroll tax. That will all come to an abrupt end beginning with their first payroll check in 2013 when the FICA rate returns to 6.2% (up from 4.2% in 2011 and 2012). Self-employed individuals will have a corresponding increase in their SE tax.
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Not Too Late to Make a Tax-Free IRA Distribution to Charity for 2012

• Posted on January 10, 2013

If you are 70.5 years of age or older and are considering making a donation to a charity, you should know that, as part of the last-minute tax changes, Congress retroactively extended the option of making the contribution from your IRA account for 2012 and for 2013 as well.
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IRS Delays Accepting 2012 Returns for Processing

• Posted on January 10, 2013

The procrastination in reaching a tax-bill compromise, by our elected officials in Washington, has created a ripple effect for the preparation of 2012 tax returns. Congress reached an agreement in the last days of December and the legislation was not actually signed by the president until January 2. This has left the IRS scrambling to modify tax forms and complete programming and testing of its processing systems, all of which must be completed before it can begin accepting tax returns and issuing refunds.
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President Signs American Taxpayer Relief Act of 2012

• Posted on January 7, 2013

President Obama on January 2 signed the American Taxpayer Relief Act of 2012. The new law makes permanent Bush-era tax rates for individuals and couples with annual income of $400,000 and $450,000, respectively. The law also permanently indexes the alternative minimum tax for inflation, extends unemployment insurance benefits for one year and extends numerous business benefits. The law does not continue the 2012 reduction in employment tax rates from 6.2 percent to 4.2 percent.
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Congress Avoids the Fiscal Cliff

• Posted on January 3, 2013

The Senate and the House have passed a last minute budget deal worked out between President Barack Obama and congressional Republicans averting the so-called fiscal cliff.
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Don’t Forget Your Minimum Required Distribution for 2012

• Posted on December 26, 2012

The IRS does not allow IRA owners to keep funds in a Traditional IRA indefinitely. Eventually, assets must be distributed and taxes paid. If there are no distributions, or if the distributions are not large enough, the IRA owner may have to pay a 50% penalty on the amount not distributed as required. Generally, required distributions begin in the year the IRA owner attains the age of 70½.
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Last Minute Tax Moves

• Posted on December 20, 2012

Year’s end is rapidly approaching, but there are still some tax-advantaged moves you can make before the New Year. If you itemize deductions, you might pre-pay the next installment of your property taxes, pay off medical bills, and pay the 4th quarter state estimated tax payment in advance. You might pre-pay college tuition to maximize education credits and purchase business equipment to take advantage of the more beneficial write-offs available in 2012.
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Portability of a Deceased Spouse’s Estate Tax Exemption Explained.

• Posted on December 18, 2012

Estates of decedents who died from January 1, 2011 through December 31, 2012 may elect to transfer any unused exclusion to the surviving spouse. The amount received by the surviving spouse is called the deceased spousal unused exclusion (DSUE) amount. Making this election can have a profound effect on the taxation of the estate of the surviving spouse.
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Late Filing and Late Payment Penalty Abatement

• Posted on December 13, 2012

A little-known provision within the Internal Revenue Manual (IRM) allows for the abatement of late filing and late payment penalties if a taxpayer was in compliance for the prior three years and had not previously had a penalty abated under this “first-time abate” provision. In a recent report, the Treasury Inspector General took the IRS to task for not publicizing and acting on this IRM policy. Abatement of the late filing and late payment penalties can result in some significant savings for taxpayers who are or have been subject to those penalties.
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Splitting Inherited IRAs before Year's End

• Posted on December 11, 2012

If you or others were the beneficiaries of an inherited IRA whose owner died in 2011, December 31, 2012 is an important deadline.
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Year-End Tax Planning Moves for Businesses

• Posted on December 6, 2012

As the end of the year approaches, many are looking for ways to reduce their business profits before year’s end. Here are some possible moves that might apply to your situation.
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How to Avoid or Reduce Underpayment Penalties

• Posted on December 4, 2012

As the end of the year approaches, individuals should make sure that they have pre-paid enough tax for 2012 to ensure they will not be subject to the underpayment penalty for 2012.
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IRS Announces 2013 Automobile Mileage Rates

• Posted on November 29, 2012

Taxpayers may choose to deduct business automobile expenses using the actual operating expenses of an automobile plus depreciation, or they can use the “optional standard mileage rate” to compute business auto deductions for owned vehicles. If the taxpayer chooses the actual method, which includes MACRS depreciation, in the first business-use year, then the optional method may not be used in any future year. Thus, a taxpayer is unable to switch back to the standard mileage rate in any subsequent year for that vehicle.
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Education Credit Going Away in 2013?

• Posted on November 27, 2012

Unless Congress extends it, the American Opportunity Tax Credit (AOTC) expires at the end of 2012, leaving only the Hope and Lifetime Learning credit for 2013 and subsequent years.
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Are You Required to File 1099s?

• Posted on November 20, 2012

If you use independent contractors to perform services for your business and you pay them $600 or more for the year, you are required to issue them a Form 1099-MISC after the end of the year to avoid facing the loss of the deduction for their labor and expenses. The 1099s for 2012 must be provided to the independent contractor no later than January 31 of 2013.
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Year-End Tax Planning Moves for Individuals

• Posted on November 15, 2012

Uncertainty dominates year-end tax planning this year. Unless Congress acts, the Bush-era tax cuts will expire and bring higher tax rates and the loss of many deductions and credits starting in 2013. More individuals will be snared by the alternative minimum tax, which has not been patched for 2012 as it has for many years in the past.
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Will Capital Gains Be Changed?

• Posted on November 13, 2012

Currently, capital gains rates for the sale of assets held over one year are taxed at 15% (0% to the extent a taxpayer is in the 15% or lower regular tax bracket), compared with a top tax of 35% for ordinary income. Without Congressional action, these rates will increase to 20% (18% for assets held over 5 years) in 2013.
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Will Itemized Deductions Be A Thing of the Past?

• Posted on November 8, 2012

With the national debt and tax simplification taking front burners these days, there has been a great deal of discussion by both political parties and bi-partisan groups about doing away with or substantially altering itemized deductions. Itemized deductions have been around for as long as most of us can remember, and altering these deductions would have a profound effect on many taxpayers.
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Casualty Losses Effects on Taxes

• Posted on November 6, 2012

The following is a brief overview of casualty losses and how they might impact your tax return. The information provided is by no means complete; contact this office for further details.
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Are We Headed for a Fiscal Cliff?

• Posted on November 1, 2012

For several years now, Congress has left the taxpaying public hanging to the last minute with tax changes and extensions. And each year, the political gridlock seems to get worse, leaving taxpayers pondering how to plan their finances and businesses undecided about capital investments and hiring new employees, not knowing what the tax laws will bring in the next year.
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Congress Leaves Us Hanging Again on the AMT

• Posted on October 30, 2012

Here it is, almost the end of the year, and as they have done for several years, Congress has not indicated if they will extend the higher AMT exemption amounts or allow them to revert to lower amounts that were in effect before exemptions were increased to shield the middle class from the punitive tax. A recent Congressional report indicates that, if Congress does not extend the AMT break, one in five taxpayers will be impacted by the AMT in 2012.
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Is Your Hobby a For-Profit Endeavor?

• Posted on October 25, 2012

The tax treatment for a hobby is substantially different than it is for a business, which sometimes makes it difficult to distinguish one from the other. The IRS provides appropriate guidelines when determining whether an activity is engaged in for profit, such as a business or investment activity, or is engaged in as a hobby.
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Gifting Consequences to Think About

• Posted on October 23, 2012

Frequently, taxpayers think that gifts of cash, securities, or other assets they give to other individuals are tax-deductible and, in turn, the gift recipient sometimes thinks income tax must be paid on the gift received. Nothing is further from the truth. To fully understand the ramifications of gifting, one needs to realize that gift tax laws are interrelated with estate tax laws.
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Fine-Tuning Capital Gains and Losses

• Posted on October 18, 2012

The year's end has historically been a good time to plan tax savings by carefully structuring capital gains and losses. Let's consider some possibilities.
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Keep Track of Meal & Entertainment Expenses

• Posted on October 16, 2012

When looking for deductions to add to your taxes, don’t overlook your meal and entertainment expenses. These types of expenses must be “ordinary” and “necessary” to your business or trade and must be “directly related to” or “associated with” the active conduct of business.
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Saver's Credit Can Help You Save for Retirement

• Posted on October 11, 2012

Low- and moderate-income workers can take steps to save for retirement and at the same time earn a special tax credit.
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Reverse Mortgages: A Salvation For Seniors?

• Posted on October 9, 2012

In recent months, we have seen a growing number of celebrities on TV promoting reverse mortgages. In today’s economy, many retirees are faced with mounting debt and inadequate incomes. For many, their home is their most valuable, and perhaps only, asset, but it is also their home and they really don’t want to sell it.
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Eldercare Can Be a Medical Deduction

• Posted on October 4, 2012

With people living longer, many individuals find themselves becoming the care provider for elderly parents, spouses and others who can no longer live independently. When this happens, questions always come up regarding the tax ramifications associated with the cost of nursing homes or in-home care.
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Don’t Be a Victim!

• Posted on October 2, 2012

As the tax-filing season approaches, the identity thieves are gearing up with tax scams to sucker you into providing them with your identity information, which they can then use to charge against your credit cards, tap your bank account, steal your tax refund, file a fraudulent tax return in your name . . . the list goes on and on.
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The IRS Has Your Numbers!

• Posted on September 27, 2012

Correspondence from the IRS has a tendency to escalate a taxpayer’s pulse rate. However, most of the letters received are not of the feared “come on down” type that requests an appearance for a face-to-face audit; they would be more likely to just require a written explanation.
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Is Your Charitable Gift Documentation Adequate?

• Posted on September 25, 2012

The IRS recently denied a taxpayer's substantial charitable contribution to his church because the acknowledgement letter from the church lacked the required no goods or services provided statement. The church supplied the taxpayer (we'll call him Jack) with a replacement acknowledgement letter that included the statement, but the IRS rejected the replacement since it was not received contemporaneously. An obviously upset Jack took the issue to tax court but ended up with the same result - no deduction - because his documentation did not meet the law's requirements.
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Selling Your Home

• Posted on September 20, 2012

During the summer months, many people sell their home and move to a new location. Now that the stress of the move is over, they may be wondering about the tax ramifications of the sale. Luckily, many of those individuals who made a profit on the sale will not have to pay a single dime of additional income tax to the IRS.
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Inheritances Can Be Tricky

• Posted on September 18, 2012

If you have received an inheritance or anticipate receiving one in the future, this article may answer many of your questions. The process of claiming an inheritance can be quite complex, and it helps to understand the basics and to be aware of potential tax liabilities.
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When Should You Start Taking Social Security?

• Posted on September 13, 2012

A question frequently asked by individuals who are approaching the age at which they can draw Social Security benefits is, “At what age should I begin taking my benefits?” To make an informed decision, a number of issues should be considered, including how doing so affects your benefits, what the tax ramifications are, the historical longevity of your family, and your financial needs. But first, let's review how the decision will impact your Social Security benefits based on when you decide to retire.
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Tips for Students and Parents Paying College Expenses

• Posted on September 11, 2012

Whether you're a recent high school graduate going to college for the first time or a returning student, paying for college can be a daunting financial task for parents and student. The following are some tips about education tax benefits that can help offset some college costs for students and parents.
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Assisting Your Child in Acquiring a Home

• Posted on September 6, 2012

If you are a parent who wants to assist your child in obtaining his or her first home, there are a number of ways you can help.
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Ever Wonder What a Tax Deduction Might Save You?

• Posted on September 4, 2012

Taxpayers frequently ask what benefit is derived from a tax deduction. Unfortunately, there is no straightforward answer. The reason the benefit cannot be determined simply is because some deductions directly reduce gross income, while others must be itemized, must exceed a threshold amount before being deductible, or are not deductible for alternative minimum tax purposes. Meanwhile, business deductions can offset both income and self-employment tax. In other words, there are many factors to consider, and the tax benefits differ for each individual, depending on his or her particular situation.
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Important Times to Seek Assistance

• Posted on August 30, 2012

Waiting for your regular appointment to discuss current tax-related issues can create problems or cause you to miss out on beneficial options that need to be timely exercised before year-end. Generally, you should call this office any time you have a substantial change in taxable income or deductions. By doing so, we can advise you about how to optimize your tax liability, avoid or minimize penalties, estimate and pre-pay required taxes, document deductions, and examine and explore tax options. You should call this office if you or your spouse:
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Haven’t Filed an Income Tax Return?

• Posted on August 28, 2012

If you have been procrastinating about filing your 2011 tax return or have other prior year returns that have not been filed, you should consider the consequences.
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Renting Your Vacation Home

• Posted on August 23, 2012

If you own a home in a vacation locale – whether it is your primary residence or a vacation home – and are considering renting it out to others, there are complicated tax rules, referred to as the “vacation home rental rules,” that you need to be aware of.
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Job Search Expenses Can Be Tax Deductible

• Posted on August 21, 2012

Summertime is the season that often leads to major life decisions, such as buying a home, moving or a job change. If you are looking for a new job that is in the same line of work, you may be able to deduct some of your job-hunting expenses on your federal income tax return.
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Your IRA Beneficiary - More Complicated Than You Might Expect

• Posted on August 16, 2012

The decision concerning whom you wish to designate as the beneficiary of your traditional IRA is critically important. This decision affects the minimum amounts you must withdraw from the IRA when you reach age 70-1/2, who will get what remains in the account after your death, and how that IRA balance can be paid out. What's more, a periodic review of whom you've named as IRA beneficiaries is vital to ensure that your overall estate planning objectives will be achieved in light of changes in the performance of your IRAs and in your personal, financial, and family situation.
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What's Best, Tax-Free or Taxable Interest Income?

• Posted on August 14, 2012

A frequent taxpayer question is whether it is better to invest for tax-free or taxable interest. Generally, taxable interest will provide a greater return, but this may not hold true after taking into account taxes on the income. Therefore, the question is really which provides the greater "after-tax" return.
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Planning Your RMD and IRA Distributions For 2012

• Posted on August 9, 2012

We spend most of our lives saving for retirement by putting funds away in tax-advantaged ways. But many of us forget about planning the withdrawals so that they are tax-advantaged as well.
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Those Olympic Medals Are Taxed

• Posted on August 7, 2012

You may have never given it a thought as you watched our Olympic team compete in London, but did you know that a gold medal winner receives a $25,000 monetary award in addition to the gold medal, which itself is worth approximately $675, and both are taxed by the IRS? That’s right, just like game show winners, the winning athletes are taxed on their winnings, including the value of the medals themselves.
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Special Tax Benefits for Armed Forces Personnel

• Posted on August 2, 2012

U.S. military personnel and their families face unique life challenges with their duties, expenses, and transitions. The tax code includes numerous special tax benefits that are available to them. Here are several of the most prominent of those tax breaks:
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Mid-Year Tax Planning Checklist

• Posted on July 31, 2012

All too often, taxpayers wait until after the close of the tax year to worry about their taxes, missing opportunities that could reduce their tax liability or help them financially. Fall is the perfect time for tax planning. Following are some events that can affect your tax return; you may need to take steps to mitigate their impact and to avoid unpleasant surprises after it is too late to do anything.
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Bunching Your Deductions Can Provide Big Tax Benefits

• Posted on July 26, 2012

If your tax deductions normally fall short of itemizing your deductions or even if you are able to itemize, but only marginally, you may benefit from using the “bunching” strategy.

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SE Health Insurance Deduction: Has the IRS Gotten It Right?

• Posted on July 24, 2012

It seems the IRS cannot make up their minds related to the self-employed health insurance deduction. Although it made sense that the Medicare premiums paid by a self-employed individual should be allowed as part of the self-employed health insurance deduction, the IRS said no in their 1040 instruction through 2009. Then for 2010 returns, without any fanfare, they quietly modified the instructions, allowing the self-employed individual to include his or her premium in the computation of the self-employed health insurance deduction and suggested prior year returns where the 3-year statute of limitations had not expired could be amended.
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Inheritances Can Be Tricky

• Posted on July 19, 2012

If you have received an inheritance or anticipate receiving one in the future, this article may answer many of the questions you might have. The process of claiming an inheritance can be quite complex, and it helps to understand the basics and be aware of potential tax liabilities. NOTE: Special rules, not covered in this article, will apply if the decedent's death occurred during 2010 and the executor elected to apply the “no estate tax” rules available at that time (usually this occurred only if the estate was valued at more than $5 million). If you are a beneficiary under this condition, the executor should provide you with additional information as to the basis of the property you inherited.
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Middle-Class Tax Cuts: Will Congress Act Soon?

• Posted on July 17, 2012

So who does President Obama see as the middle class? He has repeatedly used earnings of $250,000 for married couples and $200,000 for single individuals as the threshold for what he considers the wealthy and those who should not benefit from tax cuts.
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How the Health Care Law Will Impact Your Taxes

• Posted on July 12, 2012

There has been a great deal of media coverage related to the US Supreme Court upholding the Affordable Care Act, also known as the Health Care Law. The media coverage was generally political and failed to explain the details of how the law will impact individuals. If you are interested in political rhetoric as to whether it is a tax, penalty, or a forced purchase, look no further. The intent of this article is to explain how the Affordable Care Act will impact your pocketbook in 2013, when the healthcare taxes kick in, and in 2014, when the mandatory insurance requirement becomes effective. Here are the details for 2013:
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Should Investments Be Kept In A Safe Deposit Box?

• Posted on July 10, 2012

Whether it is a good idea or not to keep investments in a safe deposit box depends on the investment. Certainly, some investments definitely require this sort of protection. These would include investments such as rare coins, stamps, and similar collectables, gold and silver, and negotiable instruments, such as bearer bonds that can be cashed by anyone who possesses them. The cost of renting the box is justifiable for keeping these items safe.
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Family Courts Don't Always Pay Attention To Federal Tax Law

• Posted on July 5, 2012

All too often, family law courts make rulings that are contradictory to federal tax law, causing confusion and inequity in divorce actions since family court rulings cannot trump federal tax law.
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Will You Be Hit by the AMT in 2012?

• Posted on July 3, 2012

AMT is the acronym for Alternative Minimum Tax. It is a different (alternative), and generally punitive, method of computing income tax when either certain types of income receive preferential tax treatment or there are excessive deductions in certain categories. Congress originally implemented it to impose a minimum tax on higher-income taxpayers who were avoiding taxes through tax shelters and other legal means. However, years of inflation without corresponding adjustment to the AMT components have, each successive year, caused an increasing number of taxpayers to be subject to the AMT.
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Tax Tips for Recently Married Taxpayers

• Posted on June 28, 2012

If you - like many others during the spring and summer months - have gotten married or plan to get married in the near future, here are some post-marriage tips to help you avoid stress at tax time.
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Raising Cash in Tough Times

• Posted on June 26, 2012

A housing market that has not recovered from the big price drops that began several years ago, long-term unemployment, and a still wobbly economy mean tough times for cash-strapped individuals seeking to raise money for an immediate financial need. Compounding the misery is the fact that many people have locked away the lion's share of their savings in a tax-favored retirement vehicle, such as a company profit-sharing or 401(k) plan, IRA, SEP, SIMPLE IRA, or Roth IRA. And getting at that money in order to resolve a pressing financial crisis before 59 1/2 years of age is not easy and can be financially painful.
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Keep Track of Your Basis

• Posted on June 21, 2012

Regarding taxes, there is a saying to the effect that “those who keep records win.” If you are an investor, you may have a variety of securities, including stocks, bonds, and mutual funds. When you sell those securities, you want to minimize your gains or maximize your losses for tax purposes. Gains or losses are measured from your tax basis in the investment (asset), making it important to keep track of the basis in all of your investments.
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Summertime Child Care Expenses May Result in Tax Savings

• Posted on June 19, 2012

Many parents who work or are looking for work must arrange for the care of their children during school vacation. If you are in this situation and your children requiring care are under 13 years of age, you may qualify for a child care tax credit. The credit offsets income tax, potentially to zero, but cannot be used to reduce special taxes, such as self-employment tax, and is not refundable.
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Automated IRS System Helps College-Bound Students with Financial Aid Application Process

• Posted on June 14, 2012

College-bound students and their parents typically want to make every dollar and every minute of the college experience count, including money spent on tuition and time spent on the college financial aid application process. The Internal Revenue Service is helping minimize the time spent completing the Free Application for Federal Student Aid (FAFSA) form by automating access to federal tax returns with the IRS Data Retrieval Tool. This tool provides the opportunity for applicants to automatically transfer the required tax data onto the FAFSA form.
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Tax Increases Looming in 2013

• Posted on June 12, 2012

Without Congressional action before the end of the year, just about everyone, rich and poor alike, will be hit by tax increases. These increases are the result of temporary tax benefits that will expire at the end of 2012.
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Retirement Savings: the Earlier, the Better

• Posted on June 7, 2012

Generally, teenagers and young adults do not consider the long-term benefits of retirement savings. Their priorities for their earnings are more for today than that distant and rarely considered retirement. Yet contributions to a retirement plan early in life can enjoy years of growth and provide a substantial nest egg at retirement.
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Take Advantage of Education Tax Benefits

• Posted on June 5, 2012

Numerous tax code incentives are designed to encourage higher education. Tax benefits for those who qualify include a student loan interest deduction, two types of education tax credits, tax-advantaged education savings programs, and tax-free interest on certain savings bonds used for education expenses. Income limits apply to most of these benefits, and impending post-2012 tax law changes adversely affect many.
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Do You Have a Financial Interest in or Signature Authority over a Foreign Financial Account?

• Posted on May 31, 2012

Every U.S. person who has a financial interest in or signature or other authority over any foreign financial accounts (including bank, securities and other types of financial accounts in a foreign country), if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year, must report those relationships to the U.S. government each calendar year.
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Automated IRS System Helps College-Bound Students with Financial Aid Application Process

• Posted on May 29, 2012

College-bound students and their parents typically want to make every dollar and every minute of the college experience count including money spent on tuition and time spent on the college financial aid application process. The Internal Revenue Service is helping minimize the time spent on the completion of the Free Application for Federal Student Aid (FAFSA) form by automating access to federal tax returns with the IRS Data Retrieval Tool. This tool provides the opportunity for applicants to automatically transfer the required tax data onto the FAFSA form.
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Small Business Expenses 101

• Posted on May 24, 2012

For small business owners, tax breaks often come in the form of tax deductions – which can offer a nice little instant cash savings – if you know how to navigate tax law and claim the deductions you deserve (not what you believe you are entitled to).
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IRS Liberalizes Position on Local Lodging

• Posted on May 22, 2012

In the past, a business deduction was allowed only for lodging when a taxpayer traveled away from his or her “tax home.” A taxpayer’s tax home is generally the location (such as city or metropolitan area) of a taxpayer’s main place of business (not necessarily the place where he/she lives).
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Social Security Administration Launches New Online Tool

• Posted on May 17, 2012

If you go back a few years, you may remember that every year, about three months before your birthday, you received an earnings and benefits statement from the Social Security Administration providing you with a history of your earnings and projected benefits. Then, along came a recession and the accompanying budget cuts and the mailing out of the statements stopped, except for workers age 60 and over.
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What to Do If You Receive an IRS Notice

• Posted on May 15, 2012

It’s a moment many taxpayers dread. A letter arrives from the IRS and it’s not a refund check. But don’t panic; many of these letters can be dealt with simply and painlessly.
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Forgot Something on Your Tax Return? It’s Not Too Late to Amend the Return

• Posted on May 10, 2012

If you discover that you forgot something on your tax return, you can amend that return after it has been filed. The need to amend can include a number of issues:
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How Business Website Expenses Are Deducted

• Posted on May 8, 2012

With the explosion of online businesses, one would think that there would be a standard method of deducting the cost of your business website. But some questions still exist as to what part of a website is considered software, and to date, the IRS has not fully clarified that issue for tax purposes.
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Big Changes Coming for Investors in 2013

• Posted on May 3, 2012

2013 will bring some big changes for investors, and none of them for the better. Taxpayers affected by these upcoming changes may wish to consider taking actions in 2012 to mitigate the impact of these changes. The following are the changes that will affect investors in 2013.
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Read This before Tossing Old Tax Records

• Posted on May 1, 2012

Now that you’ve completed your taxes for 2011, you are probably wondering what old tax records can be discarded. If you are like most taxpayers, you have records from years ago that you are afraid to throw away. To determine how to proceed, it is helpful to understand why the records needed to be kept in the first place.
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Are You an Employee or an Independent Contractor?

• Posted on April 26, 2012

The distinction has significant implications for both the employer and the employee. Employers like to treat individuals as independent contractors because they avoid having to match the employees’ payroll tax, pay benefits, pay unemployment insurance, etc. This results in a significant savings for employers.
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Can You Write Off a Bad Debt?

• Posted on April 24, 2012

Most small businesses have receivables that cannot be collected. These receivables can be from the sale of products, providing services to customers, or a combination of the two.
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Is the IRS Withholding Some or All of Your Refund?

• Posted on April 19, 2012

If the IRS kept all or a portion of your federal refund, it may be because you owe money for certain delinquent debts. If you are in arrears for one or more of these obligations, the IRS or the Department of Treasury's Financial Management Service (FMS), which issues IRS tax refunds, can offset or reduce your federal tax refund or withhold the entire amount to satisfy the debt.
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Tips for Deducting Employee Business Expenses

• Posted on April 17, 2012

Some employees may incur certain work-related expenses. If their employers reimburse them for the expenses, then the employees are not out-of–pocket for the expenses and cannot deduct them on their tax returns. If the employers do not reimburse for the expenses, the employees may deduct the expenses as a miscellaneous itemized deduction on their tax returns.
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Checking the Status of Your Federal Tax Refund is Easy

• Posted on April 12, 2012

If you already filed your federal tax return and are due a refund, you can check the status of your refund online.
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Can’t Pay Your Taxes by the April Due Date?

• Posted on April 10, 2012

The vast majority of Americans get a tax refund from the IRS each spring, but what if you are one of those who end up owing?
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Individual Estimated Tax Payments for 2012 Start Soon

• Posted on April 5, 2012

Our tax system is a “pay-as-you-go” system, and if your pre-paid amount is not enough, you become liable for non-deductible interest penalties. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the “pay-as-you-go” requirement. The primary among these include:
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Refund Statute Expiring: Don’t Miss Out!

• Posted on April 3, 2012

If you have not yet filed your 2008 tax return and have a refund coming, time is running out! The IRS estimates that there are more than 1 million taxpayers who have not filed their 2008 tax return and that there are approximately $1 billion of unclaimed refunds available for those taxpayers. If you fall in this category, you need to act quickly because the return must be filed by April 17, 2012 to claim a refund for 2008. Otherwise, the money becomes the property of the U.S. Treasury.
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Tax Filing Deadline Rapidly Approaching

• Posted on March 29, 2012

Just a reminder to those who have not yet filed their 2011 tax return that April 17, 2012 is the due date to either file your return and pay any taxes owed, or file for the automatic six-month extension and pay the tax you estimate to be due. Normally the deadline is April 15, but when a due date falls on a weekend or holiday, the due date is extended until the next business day. Thus, since April 15 falls on a Sunday and April 16 is a legal holiday in Washington, D.C. (Emancipation Day), the due date for 2011 tax returns is extended until Tuesday, April 17, 2012.
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Stock Transactions Reporting Can Be A Nightmare

• Posted on March 27, 2012

Beginning with the 2011 tax return, reporting stock transactions has become significantly more complicated because of the new requirement for brokerage firms to track the purchase price of stocks acquired after 2010 and subsequent years and to include that information on the information-reporting document 1099-B.
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Charity Purchases and Auctions

• Posted on March 22, 2012

A regular form of fundraising by charitable organizations consists of sales or auctions of property or services at a price in excess of value. These are referred to as “quid pro quo” contributions or dual payments made that consist partly of a charitable gift and partly of consideration for goods or services provided to the donor.
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Streamlined Installment Agreements Raised to $50,000

• Posted on March 20, 2012

The IRS as part of its “Fresh Start” initiative to help struggling taxpayers is making installment agreements available to more people. The Fresh Start provisions also mean that more taxpayers will have the ability to use streamlined installment agreements to catch up on back taxes.
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Small Employers: Don’t Miss Out on the Small Business Health-Care Tax Credit

• Posted on March 15, 2012

If you are a small employer with fewer than 25 full-time equivalent employees who earn an average wage of less than $50,000 a year and you pay at least half of employees' health insurance premiums…then there is a tax credit that may put money in your pocket.
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Receive Your Refund Faster With Direct Deposit

• Posted on March 13, 2012

Want your refund faster? Have it deposited directly into your bank account. More taxpayers are choosing direct deposit as the way to receive their federal tax refunds. More than 79 million people had their tax refunds deposited directly into their bank accounts in 2011. It’s a secure and convenient way to get your money in your pocket faster.
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Penalty Relief for Financially Distressed Taxpayers

• Posted on March 8, 2012

The IRS has new penalty relief for the unemployed and certain self-employed individuals on failure-to-pay penalties, which are one of the biggest factors a financially distressed taxpayer faces on a tax bill.
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You Can Still Change Your Mind!

• Posted on March 6, 2012

If you made a conversion from a traditional to a Roth IRA, there is a good chance the entire conversion is taxable. Generally, people plan those conversions for years with low income or when the stock market is down and the IRA value at the time of the conversion is low.
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Tax Evasion Can Lead to Deportation for Aliens

• Posted on March 1, 2012

Don’t get caught with your hand in the government’s pocket, especially if you are not a U.S. Citizen. Case in point: Mr. and Mrs. Kawashima have been U.S. resident aliens since 1984 and own restaurants in Southern California.
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President Signs Payroll Tax-Cut Bill

• Posted on February 28, 2012

On February 22, President Obama signed the Middle Class Tax Relief and Job Creation Act of 2012 (HR 3630). This law extends the 2% reduction in employment taxes and a like adjustment in SE taxes through December 2012.
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Receiving Tips Can Be Taxing

• Posted on February 23, 2012

If you work in an occupation where tips are part of your total compensation, you need to be aware of several facts relating to your federal income taxes:
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You Still Have Time!

• Posted on February 21, 2012

One of the earliest lessons in life is that actions have consequences, and approaching retirement age without a substantial nest egg is one of those consequences. But if you are in this situation, you are not alone, as millions of other Americans are faced with the same need to save enough to retire comfortably.
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Is Your Schedule C in the Audit Bull’s-eye?

• Posted on February 16, 2012

In a recent study, the IRS determined that over half of all underreporting is attributable to Schedule C, the form used by self-employed individuals to report their profits or losses for the year. It is no wonder that the audit rate for Schedule C returns has increased substantially and is among the highest of all rates. Based on 2010 IRS figures, Schedule Cs have a 300% higher chance of being audited than either a partnership or an S-Corporation. Of the Schedule Cs audited in 2010, the average adjustment exceeded $9,000.
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Been Selling Your Gold? Better Read This!

• Posted on February 14, 2012

If you took advantage of escalating gold and silver prices and made any sales of gold, silver, gems, jewelry, or the like during 2011, you are required to report the sales on your tax return. Whether or not the sales are subject to tax, and at what tax rate, depends upon the type of item sold and your tax basis for the item.
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Don’t be Scammed by Tax Season Cyber Criminals

• Posted on February 9, 2012

Now that tax season is upon us, so are the e-mail scammers pretending to be the IRS. Most of these scams fraudulently use the IRS name, logo, and/or website header as a lure to make the communication appear to be more authentic and enticing. They lead you to believe you had a refund of some sort coming and request personal information. The goal of these scams - known as phishing - is to trick you into revealing your personal and financial information. The scammers can then use your information - such as your Social Security number, bank account, or credit card numbers - to commit identity theft or steal your money.
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Don't Forget to Report Those Foreign Financial Assets!

• Posted on February 7, 2012

New for 2011 is a requirement for any individual who, during the tax year, holds any interest in a “specified foreign financial asset” to complete and attach Form 8938 to his or her income tax return if a reporting threshold is met. The reporting threshold varies depending on whether the individual lives in the U.S. and files a joint return with his or her spouse. For example, someone who is not married and doesn't live abroad will need to file Form 8938 for 2011 if the total value of his or her specified foreign financial assets was more than $50,000 as of December 31, 2011 or more than $75,000 at any time during 2011. For married taxpayers filing a joint return and living in the U.S., the threshold amounts are doubled. The thresholds also are higher for taxpayers residing abroad.
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Having a Bad Year? You May Qualify For Earned Income Credit

• Posted on February 2, 2012

Many individuals find themselves earning less during these troubled economic times than in years past. As a result, they may find that they qualify for a credit to which they previously were not entitled because of income limitations.
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Don’t Forget Those Nominee 1099s

• Posted on January 31, 2012

For tax purposes, if you receive, in your name, income that actually belongs to someone else, you are also a nominee. Being a nominee means you must file with the IRS a 1099 form appropriate to the type of income you received and give a copy of the 1099 to the actual owner of the income. However, if the other person is your spouse, no 1099 filing is required.
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What to Do If You Are Missing a W-2

• Posted on January 26, 2012

Have you received your W-2? These documents are essential to filling out most individual tax returns. You should receive a 2011 Form W-2, Wage and Tax Statement, from each of your employers each year. Employers have until January 31, 2012 to provide or send you a 2011 W-2 earnings statement either electronically or in paper form. However, you should wait a week or so before becoming concerned. If by then you have not received your W-2, follow these steps:
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Are You Required to File 1099s?

• Posted on January 24, 2012

If you use independent contractors to perform services for your business and you pay them $600 or more for the year, you are required to issue them a Form 1099-MISC after the end of the year to avoid facing the loss of the deduction for their labor and expenses. The 1099s for 2011 must be provided to the independent contractor no later than January 31 of 2012.
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Dependents & Medical Expenses

• Posted on January 19, 2012

Medical expenses paid for dependents may be deducted. To claim these expenses, the person must have been a dependent either at the time the medical services were provided or at the time the expenses were paid.
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To File or Not to File

• Posted on January 17, 2012

A frequent question asked is whether or not an individual needs to file a tax return. There are two issues associated with this question:
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A Name Change Can Complicate Tax Filing

• Posted on January 12, 2012

If you changed your name as a result of a recent marriage or divorce, you will want to take the necessary steps to ensure the name on your tax return matches the name registered with the Social Security Administration (SSA). A mismatch between the name shown on your tax return and the SSA records can cause problems in the processing of your return and may even delay your refund.
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Revising Your W-4? Seek Professional Advice.

• Posted on January 10, 2012

This time of the year, many employers will request from their employees updated W-4 forms (and the equivalent state form for those who live in a state with income tax). The W-4 form allows you to specify your filing status and the number of dependent exemptions to be used for figuring the amount of income tax to be withheld from your payroll. Even though the IRS provides an on-line W-4 calculator, it is generally suitable for the more simple returns and may not be appropriate in all cases since it does not take into account all income adjustments, credits, and deductions available. Be careful when completing the W-4 form because errors can create some significant financial problems.
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It's Tax Time! Are You Ready?

• Posted on January 5, 2012

If you’re like most taxpayers, you find yourself with an ominous stack of “homework” around TAX TIME! Unfortunately, the job of pulling together the records for your tax appointment is never easy, but the effort usually pays off when it comes to the extra tax you save! When you arrive at your appointment fully prepared, you’ll have more time to:
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Your Payroll Tax Cut is Safe for Now!

• Posted on January 3, 2012

Congress gave all wage earners a short-lived 2012 reprieve by temporarily extending the 2% payroll tax cut though February of 2012.
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Only 2 Days Left For 2011 Tax Deductions

• Posted on December 29, 2011

We would like to remind you that the last day you may make a tax deductible purchase, pay a tax deductible expense or make a tax deductible charitable contribution for 2011 is Saturday Dec. 31.
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IRAs and Prohibited Transactions

• Posted on December 27, 2011

Congress created IRAs so that individuals could set aside funds for their future retirement, and as an incentive to contribute to an IRA, permitted the contribution to be tax-deductible, unless the individual also participated in an employer’s retirement plan and had income exceeding a specific threshold. However, Congress put safeguards in place to make sure the IRA funds are not used for purposes inconsistent with prudent retirement savings.
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Tips for Year-End Giving

• Posted on December 22, 2011

Individuals and businesses making contributions to charity should keep in mind several important tax law provisions that have taken effect in recent years. Some of these changes include the following:
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Last Minute IRA Reminders

• Posted on December 20, 2011

It is just a little over a week until the close of the 2011 tax year. But before the year ends, there may be some outstanding IRA issues that may require your immediate action. Here are a few December 31st deadline topics to consider:
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Is It a Business or a Hobby?

• Posted on December 15, 2011

The distinction between a business activity and a hobby is not a black-and-white issue but instead comes in various shades of grey, which makes it a frequent topic in tax court.
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Unmarried Couples and Home Mortgage Interest

• Posted on December 13, 2011

It is becoming increasingly common for couples to live together and remain unmarried, which can lead to potential tax problems when they share the expenses of a home but only one of the couple is liable for the debt on that home.
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Game Show Winners and Taxes

• Posted on December 8, 2011

If you like to watch game shows and enjoy all the excitement that goes with watching contestants win prizes, then you can add another element to your viewing pleasure by considering how the contestants will handle the IRS Form 1099 they receive for the value of the items they won. You may not have thought much about it, but the contestants must pay federal and applicable state income tax on the cash and the value of the goods they win on game shows.
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Timeshare Rental Losses and Travel Expenses Denied

• Posted on December 6, 2011

The Tax Court has held that a married couple could not deduct losses from their timeshare rental activity because: (1) they did not engage in the activity with the bona fide profit objective as required under the Code Sec. 183 hobby loss rules, (2) they failed to meet the ordinary and necessary requirements of Code Sec 162 for their travel expenses, and (3) they did not meet the strict expense substantiation rules of Code Sec 274.
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Year-end Capital Gains Strategies

• Posted on December 1, 2011

2011 has produced some significant gyrations in the financial markets that have had an impact on everyone’s portfolios. But for tax purposes, gains and losses are not measured by the increased or decreased value of your portfolio, but by gains and losses recognized from the sale of capital assets during the year. So you still have until the end of the year to structure your gains and losses to suit your particular tax situation.
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Business Benefits Abound This Year

• Posted on November 29, 2011

There are an abundant number of provisions that provide tax relief to small businesses this year. Just so that you don’t overlook any of these benefits, or in case your business would like to position itself to take advantage of some before the close of the year, here is a brief rundown on many of the business benefits that are available for 2011. Some of these provisions are currently set to expire after December 31, 2011.
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Medical Checklist

• Posted on November 25, 2011

After 2012, the limitation on deductible medical expenses increases for most taxpayers from the current 7.5% of AGI to 10% (it remains at 7.5% for taxpayers age 65 and over through 2016). So if you need some dental work, laser eye surgery, or other elective but deductible medical procedures, you might consider doing so sooner than later to take advantage of the current lower AGI limit. (But forget that face lift or other nip and tuck procedure you’ve been thinking about - cosmetic surgery costs aren’t deductible unless related to a physical injury or disfiguring disease.) Also, if you are paying for a procedure over time, it might be appropriate to pay it all at once to increase your currently deductible medical expenses.
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Maximize Your Charitable Deductions

• Posted on November 22, 2011

As the end of the year approaches, there are still things you can do to increase and properly document your charitable contributions for 2011. Here is a brief rundown:
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Report Those Foreign Financial Connections!

• Posted on November 17, 2011

FinCEN is the acronym for the Treasury Department’s Financial Crimes Enforcement Network. FinCEN is a government-wide, multisource, financial intelligence and analysis network tasked with detecting money laundering, terrorist financing, tax evasion, and other financial crimes. To do its job, FinCEN must collect financial data from a multitude of sources, including each U.S. person with connections to foreign financial transactions. This has resulted in a number of reporting requirements imposed upon taxpayers that many are unaware can result in draconian penalties for non-compliance.
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Misclassifying Workers Can Be Costly!

• Posted on November 15, 2011

Hiring independent contractors instead of employees can save a lot of money in employment taxes and employee benefits. And it can be a mine field of tax problems if workers are misclassified as independent contractors when they should have been treated as employees.
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How Long Are You on the Hook for a Tax Assessment?

• Posted on November 10, 2011

A frequent question from taxpayers is: how long does the IRS have to question and assess additional tax on my tax returns? For most taxpayers who reported all their income, the IRS has three years from the date of filing the returns to examine them. This period is termed the statute of limitations. But wait – as in all things taxes, it is not that clean cut. Here are some complications:
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Don’t Overlook the Credit for Small Employer Health Insurance Premiums

• Posted on November 8, 2011

The tax law provides a credit for small business employers in 2010, 2011, 2012, and 2013 that pay the health insurance premiums for their low- to moderate-income workers. This refundable credit can be as much as 35% of the insurance premiums paid by the employer.
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Don’t Forget Your Retirement!

• Posted on November 3, 2011

Even though retirement may be years away, and it may not be the most pressing issue on your mind these days, don’t forget your retirement contributions, especially with generous government incentives involved.
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Don’t Miss Out on the Domestic Production Deduction

• Posted on November 1, 2011

Originally enacted to help offset the repeal of a tax break for U.S. exporters, this provision of the tax code provides a deduction for many U.S. businesses that’s allowed for both regular tax and alternative minimum tax (AMT) purposes. And, despite the deduction’s history, it’s fully available to taxpayers who don’t export.
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Are You Liable for a Gift Tax Return?

• Posted on October 27, 2011

Frequently, taxpayers think that gifts of cash, securities or other assets they give to other individuals are tax-deductible and, in turn, the gift recipient sometimes thinks income tax must be paid on the gift received. Nothing is further from the truth. To fully understand the ramifications of gifting, one needs to realize that gift tax laws are related to estate tax laws.
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It’s Time for Year-End Tax Planning

• Posted on October 25, 2011

We have compiled a checklist of actions based on current tax rules that may help you save tax dollars if you act before year-end. Regardless of what Congress does late this year or early next, solid tax savings can be realized by taking advantage of tax breaks that are on the books for 2011. For individuals, these include:
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Social Security Announces 3.6 % Benefit Increase for 2012

• Posted on October 20, 2011

Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 60 million Americans will increase 3.6 percent in 2012.
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Last-Chance Opportunity to Deduct General Sales and Use Taxes?

• Posted on October 18, 2011

For 2011, taxpayers have the option of deducting the amount of state and local income tax that they paid during the year or, if they so elect, of deducting their state and local general sales and use taxes as an itemized deduction on their federal income tax return. This choice is currently scheduled to expire at the end of 2011.
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Is a Home Office Right for You?

• Posted on October 13, 2011

In the current business environment many smaller firms are looking for ways to cut costs. One such possible move would be to relocate from rented office space to a home office. With today’s modern means of communications and virtual marketplace this may be an appropriate consideration for your business.
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The IRS Is Attacking the Medical Marijuana Business

• Posted on October 11, 2011

Generally a business can deduct normal business expenses such as rent, payroll, etc. However, the IRS is using an obscure section of the code passed during the Reagan Administration as part of the “War on Drugs” to deny normal business expenses to medical marijuana-related businesses.
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Last Year for Tax-Free Charitable Donations from IRAs

• Posted on October 6, 2011

If you are 70.5 years of age or older and are considering making a donation to a charity, you may wish to consider the option of making the contribution from your IRA account.
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Tax Tips for Job Seekers

• Posted on October 4, 2011

If you are unfortunate enough to be out work, you may be spending time attending career fairs and traveling around looking and interviewing for employment. Some of the expenses you incur attempting to secure employment may be deductible on your tax return.
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Without a Fix, the AMT will Snare Millions of Taxpayers - Are You in the Crosshairs?

• Posted on September 29, 2011

A recently released Congressional Research Service (CRS) Report entitled “The Alternative Minimum Tax for Individuals” examines the effects of the Alternative Minimum Tax (AMT) without yet another Congressional fix.
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Do You Owe the IRS Money?

• Posted on September 27, 2011

While the majority of Americans get a tax refund each year, there are many who owe tax and some who can’t pay what they owe all at once. If you find yourself in the position of owing taxes, there are a number of ways to deal with the issue:
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Did Your 2010 Roth-Converted Account Decline in 2011?

• Posted on September 22, 2011

If you converted your traditional IRA to a Roth IRA during 2010 and paid (or will pay) the tax on the conversion and then watched the value of the account decrease due to the overall decline of the stock market in 2011, you still have an opportunity to do something about it.
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Don’t Overlook the Small Employer Health Insurance Credit

• Posted on September 20, 2011

If you are an eligible small employer or a tax-exempt eligible small employer, you may qualify for the small employer health insurance premium credit. This credit is one of the first health care reform provision to take effect as a result of the Health Care Act that was enacted in 2010. The credit reduces a small employer’s tax liability and is claimed on the employer’s income tax return; for eligible tax-exempt employers, the credit reduces the organization’s payroll taxes.
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Taxation of Your Social Security Benefits

• Posted on September 15, 2011

Social Security (SS) income is not taxable until a taxpayer’s AGI (without Social Security income) plus 50% of their Social Security income plus tax-exempt interest income, and plus certain other infrequently encountered additions exceeds a specific threshold. The threshold is $32,000 for married taxpayers filing jointly, zero for married taxpayers filing separately and $25,000 for all others. Once the threshold is exceeded, the Social Security income subject to tax varies from 50% to 85%.
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Sales Tax on Home Sales Rumor

• Posted on September 13, 2011

A rumor has been circulating for some time that home sales will be subject to a 3.8% federal sales tax beginning in 2013. Like most rumors, it has been initiated by someone who doesn’t have all the facts – in this case, someone who does not understand taxes. Unfortunately, the misinformation has been perpetuated through our modern means of communication.
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Will Your Deductions Be Cut to Solve Deficit Woes?

• Posted on September 8, 2011

The Joint Select Committee on Deficit Reduction (JSC) is set to convene soon with the goal of reducing the deficit by $1.5 trillion. How will they come up with that amount? Some sources think they may consider fundamental tax changes that include cutbacks to itemized deductions for individuals.
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Back to School Tips for College Students and Parents

• Posted on September 6, 2011

Whether you’re a recent high school graduate going to college for the first time or a returning college student, it will soon be time to get to campus—and payment deadlines for tuition and other fees are not far behind. Students or parents paying such expenses should keep receipts and be aware of some tax benefits that can help offset college costs.
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Adopting? You Probably Qualify for a Substantial Tax Credit

• Posted on September 1, 2011

If you are adopting a child in 2011, you may wish to familiarize yourself with the adoption tax credit. Here is an overview of this valuable tax credit:
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Tax Benefits for Disabled Taxpayers

• Posted on August 30, 2011

Taxpayers with disabilities and parents of children with disabilities may qualify for a number of IRS tax credits and benefits. Listed below are several benefits which are available if you or someone else listed on your federal tax return is disabled.
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Next Year’s Tax Refund May Be Lower

• Posted on August 25, 2011

Taxpayers accustomed to receiving a tax refund every year should be aware of the fact that there are two tax changes for 2011 that could impact their tax liability, possibly making the refunds anticipated next spring lower or even resulting in tax due for taxpayers who normally have small refunds.
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Getting Older With No Retirement Savings in Sight?

• Posted on August 23, 2011

One of the earliest lessons in life is that actions have consequences, and approaching retirement age without a substantial nest egg is one of those consequences. But if you are in this situation, you are not alone, as millions of other Americans are faced with the same need to save enough to retire comfortably.
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Your Broker’s 1099 Statement Will Be Different for 2011

• Posted on August 18, 2011

For years, the IRS has had the ability to identify the gross sales of taxpayers from broker transactions, including security (reported on a 1099-B)  and property sales (reported on 1099-S forms). However, these identified only the sales price, quantity sold (for securities), and dates of the transactions. To determine the profit or loss, you must also know the tax basis of the property that was sold. Without confirmation of the basis, which up to now has been obtainable only from the taxpayer via an audit, the IRS has no way to verify the reported profit or loss from the sale, leaving this area open to abuse.
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Taking Advantage of the Deduction for Domestic Production Activities

• Posted on August 16, 2011

The domestic production activities deduction was created to encourage manufacturing and production within the U.S., and it provides a substantial business deduction equal to 9% of the lesser of:
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Voluntary Disclosure of Offshore Accounts Expires August 31

• Posted on August 11, 2011

U.S. taxpayers with undisclosed offshore accounts are running out of time to take advantage of a soon-to-expire opportunity to come forward and get their taxes current with the Internal Revenue Service.
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Budget Control Act of 2011 - Now What?

• Posted on August 8, 2011

The new Budget Control Act of 2011 may have resolved the debt ceiling stalemate in Washington, but it leaves us hanging as far as long-term tax planning goes. Although the first $1 trillion round of deficit reduction over fiscal years 2012 through 2021 does not include revenue hikes, the second $1.5 trillion reduction over the same time period could include some fundamental tax changes.
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Tax Perks For the Business Traveler

• Posted on August 4, 2011

Food and lodging expenses may be deducted when you are away from home for business purposes. Like everything in the tax law, to be tax deductible there are certain rules to follow and the individuals that know the rules and keep good records get the most out of these deductions.
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Tax Tips for Recently Married Taxpayers

• Posted on August 2, 2011

If you, like many others during the summer months, have gotten married or plan to get married in the near future, here are some post-marriage tips to help you avoid stress at tax time.
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Tax Breaks for Charity Volunteers

• Posted on July 28, 2011

If you volunteer your time for a charity, you may qualify for some tax breaks.  Although no tax deduction is allowed for the value of services performed for a charity, there are deductions permitted for out-of-pocket costs incurred while performing the services.  The normal deduction limits and substantiation rules also apply.
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Are Charity Auction Purchases Deductible Contributions?

• Posted on July 26, 2011

It is common practice for charities to hold auction events where attendees will bid upon and purchase items.  The question often arises whether the money spent on the items purchased constitutes a charitable donation.
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Eight Tips to Help You Determine if Your Gift Is Taxable

• Posted on July 21, 2011

If you give someone money or property during your life, you may be subject to the federal gift tax. Most gifts are not subject to the gift tax, but the following are some tips to help you determine if your gift is taxable or if you are required to file a gift tax return.
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What Are the Chances of Being Audited?

• Posted on July 19, 2011

Each year, the IRS releases a publication entitled the “Data Book.”  The 2010 version of the book was released in early March, which provides statistical data on its fiscal year (FY) 2010 audit activities.  The book provides valuable information that include how many tax returns the IRS examines (audits), how they examine them, and what categories of returns IRS is focusing its resources on.
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Is Your Credit Rating Correct?

• Posted on July 14, 2011

Why do you care?  Well for starters, people with a better credit rating enjoy significantly lower interest rates that can add up to thousands of dollars less in interest payments over the term of the loan.  For example, a fixed 30-year mortgage payment varies with respect to credit score and the interest rates corresponding to the credit score.  Having a score that is two hundred points higher can offer a savings of $448 a month for the same $200,000 house loan.  Good credit ratings also provide for quicker loan approvals, fairer loan terms, and more credit.
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Documenting Charitable Contributions

• Posted on July 12, 2011

Do you have plans of making a cash contribution to your favorite charity or donating some items that are sitting in your garage or basement?  If so, make sure that you are aware of the requirements that apply to charitable contributions.
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100% Write-Off for Qualified Leasehold Improvements for Business

• Posted on July 7, 2011

In an effort to get the economy back on the rails again, the 2010 Tax Relief Act generally permits businesses to deduct 100% of the cost of leasehold improvements acquired and placed into service during 2011.
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Get Credit for Generating Your Own Home Power

• Posted on July 5, 2011

Through 2016, taxpayers can get a 30% tax credit for installing certain power-generating systems on their homes.  The credit is non-refundable, which means it can only be used to offset a taxpayer’s current tax liability but any excess can be carried forward to offset tax through 2016.
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Two Tax Credits to Help Pay Higher Education Costs

• Posted on June 30, 2011

There are two federal tax credits available to help individuals offset the costs of higher education for themselves or their dependents.  They are the American Opportunity Credit and the Lifetime Learning Credit.
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Thinking of Tapping Your Retirement Funds for a Little Extra Cash?

• Posted on June 24, 2011

In today’s economy some taxpayers may need to take money out of their retirement plans to make ends meet. If you have or are contemplating taking a distribution there are some very important and unexpected tax issues you need to be aware of.
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Standard Mileage Rates Boosted July 1

• Posted on June 23, 2011

The IRS recently announced that it is revising the optional standard mileage rates for computing the deductible costs of operating an automobile for business, medical, or moving expense purposes and for determining the reimbursed amount of these expenses that is deemed substantiated. This modification results from recent increases in the price of fuel. These increased rates are effective July 1, 2011.
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Is a Home Office Right for You?

• Posted on June 23, 2011

In the current economic environment, many smaller firms are looking for ways to cut costs.  One such possible move would be to relocate from a rented office space to a home office.  With today’s modern means of communications and virtual marketplace, this may be a good option for your business.
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Can You Write Off a Bad Debt?

• Posted on June 21, 2011

Most small businesses have receivables that cannot be collected.  These receivables can be from the sale of products, providing services to customers, or a combination of the two.
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Are You Missing Out On the Research Credit?

• Posted on June 16, 2011

The Internal Revenue Code (Sec 41) provides a tax credit of up to 20% of qualified expenditures for businesses that develop, design or improve products, processes, techniques, formulas or software and similar activities.  The credit has been available off and on since 1981 and has never been made permanent by Congress.  It has been extended several times and is currently scheduled to expire at the end of 2011.
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Tax Tips for Students with a Summer Job

• Posted on June 14, 2011

Many students hold a summer job during their time off from school.  Here are some tax issues that should be considered when working a summer job.
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What’s Best -Tax-Free or Taxable Interest Income?

• Posted on June 9, 2011

A frequent taxpayer question is whether it is better to invest for tax-free or taxable interest. Generally, taxable interest will provide the greater return, but this may not hold true after taking into account taxes on the income. Therefore, the question is really which provides the greater "after-tax" return.  There are basically four types of interest that can be excluded from income, either on the Federal or state return, and each has its own special considerations.
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Do You Have a Financial Interest or Signature with a Foreign Financial Account? Better Read This! June 30th is a Critical Date

• Posted on June 7, 2011

Each U.S. person who has a financial interest in or signature or other authority over any foreign financial accounts (including bank, securities, or other types of financial accounts in a foreign country), if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year, must report that relationship to the U.S. government each calendar year.  
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Parents Can Get Credit for Sending Kids to Day Camp

• Posted on June 2, 2011

With summer just around the corner, there is a tax break that working parents should know about.  Many working parents must arrange for care of their children under 13 years of age during the school vacation period.  A popular solution — with a tax benefit — is a day camp program.
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New Opportunity to Come Clean On Offshore Accounts

• Posted on May 31, 2011

The income earned by U.S. citizens and residents from worldwide sources are subject to U.S. income taxes.  However, until recently, hidden offshore accounts have been hard to detect, and the income from these hidden accounts have not been reported by their owners on their U.S. tax returns.  Of late, the Treasury Department has become very aggressive in seeking out and uncovering hidden offshore accounts, and the owners of these accounts have been subject to some extremely severe penalties.
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Importance of Notifying the IRS of Your Address Change

• Posted on May 26, 2011

You might say to yourself, "Why would I want to inform the IRS of my change of address since they will find out when I file my next year's income tax return?"  The following are important reasons for promptly notifying the IRS of your address change.
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Things to Know about Farm Income and Deductions

• Posted on May 24, 2011

If you have a farming business, there are several tax issues that can impact your tax situation.  The following list includes some of those issues.
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100% Write-Off for Heavy SUVs Used Entirely for Business

• Posted on May 19, 2011

The 2010 Tax Relief Act provides a limited-time 100% bonus depreciation allowance for qualified property.  It allows taxpayers that buy a new heavy sports utility vehicle (SUV) and use it entirely for business to write-off the entire purchase price in the placed-in-service year.
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Tax Tips about Tip Income

• Posted on May 17, 2011

The IRS, for some time now, has been trying to combat the underreporting of tip income by waiters and waitresses.  Tips received by individuals are subject to Federal and state (if applicable) income taxes plus Social Security and Medicare taxes.  Also taxable are the value of non-cash tips, such as tickets, passes, or other items of value.
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Health Insurance Tax Breaks for the Self-Employed

• Posted on May 12, 2011

Self-employed taxpayers may be able to deduct, as an adjustment to gross income, premiums paid for medical and dental insurance and qualified long-term care insurance for themselves, their spouse, dependents and children under the age of 27 if the self-employed taxpayer is one of the following.
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Don’t Overlook the Earned Income Tax Credit

• Posted on May 10, 2011

The Earned Income Tax Credit (EITC) is a refundable credit primarily for lower-income individuals and couples with qualifying children.  The credit offsets any tax liability of the taxpayer(s) and, if there is any left over, it is fully refundable.  The IRS reports that 1 in 5 individuals that qualify for the credit failed to claim it.
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Don’t Forget Your Minimum Required Distribution for 2011

• Posted on May 10, 2011

The IRS does not allow IRA owners to keep funds in a Traditional IRA indefinitely.  Eventually, assets must be distributed and taxes paid.  If there are no distributions, or if the distributions are not large enough, the IRA owner may have to pay a 50% penalty on the amount not distributed as required.  Generally, required distributions begin in the year the IRA owner attains the age of 70½.
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Get Credit for Making Your Home Energy-Efficient

• Posted on May 5, 2011

Although the credit for making energy-efficient improvements to your home have been substantially reduced, there is still time for you to take advantage of this tax break which expires after 2011 without Congressional action.
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Read This Before Tossing Old Tax Records

• Posted on May 3, 2011

Now that your taxes have been completed for 2010, you are probably wondering what old records can be discarded.  If you are like most taxpayers, you have records from years ago that you are afraid to throw away.  It would be helpful to understand why the records needed to be kept in the first place.
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Limited Window of Opportunity

• Posted on April 28, 2011

Last December, Congress extended a number of the Bush era tax breaks, but only for a limited amount of time.  And it is probably a safe bet to say that most won’t get extended further considering the size of the national debt.  Although numerous breaks were extended, only a certain few provide you with an opportunity to take actions that can reduce your tax bite. But if you want to take advantage of those tax breaks you need to act this year or next.  The following is a list of those extended tax breaks and what will happen when they expire.
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Is the IRS Withholding Some or All of Your Refund?

• Posted on April 26, 2011

If the IRS kept all or a portion of your federal refund, it may be because you owe money for certain delinquent debts. If that is true, the IRS or the Department of Treasury's Financial Management Service (FMS), which issues IRS tax refunds, can offset or reduce your federal tax refund or withhold the entire amount to satisfy the debt. 
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Surprised By the Kiddie Tax? There Are Ways To Avoid It!

• Posted on April 21, 2011

Were you caught by surprise when you found out that your almost adult child was subject to the Kiddie Tax? You are not alone. Kiddie tax rules generally apply to children through the age of 18 and full-time students under the age of 24.
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Rejoice - Congress Overturns Enhanced 1099 Reporting Requirements

• Posted on April 19, 2011

In earlier newsletters, we had notified you of two new 1099 reporting requirements for businesses and rentals.
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A Name Change Can Complicate Tax Filing

• Posted on April 14, 2011

If you changed your name as a result of a recent marriage or divorce, you will want to take the necessary steps to ensure the name on your tax return matches the name registered with the Social Security Administration (SSA). 
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New 2011 Reporting Requirement for Landlords

• Posted on April 12, 2011

If you use unincorporated independent contractors to perform services for your rental and you pay them $600 or more for the year, you are required to issue them a Form 1099 after the end of the year.
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What Happens with Taxes if the Federal Government Shuts Down?

• Posted on April 8, 2011

A Federal shutdown will delay tax refunds for taxpayers who file their returns on paper rather than electronically. The IRS states that electronically filed returns have their refunds processed automatically. The April 18 tax deadline is still in effect for filing 2010 returns. So do not delay if you have not yet filed your tax return. Filing late with a tax due will incur both late filing and late payment penalties. 
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Avoiding IRS Underpayment Penalties

• Posted on April 7, 2011

Congress considers our tax system as a "pay-as-you-go" system. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the "pay-as-you-go" requirement.
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Can't Pay Your Taxes by the April Due Date?

• Posted on April 5, 2011

The vast majority of Americans get a tax refund from the IRS each spring, but what if you are one of those who ended up owing?
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Tax Due Date Rapidly Approaching!

• Posted on March 31, 2011

Just a reminder that the due date for 2010 tax returns is April 18, 2011!  Normally the deadline is April 15, but when a due date falls on a weekend or holiday, the due date is extended until the next business day.  
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Refund Statute Expiring Soon. Act Quickly!

• Posted on March 29, 2011

If you have not yet filed your 2010 tax return and have a refund coming, time is running out! The IRS estimates that there are about 1.1 million taxpayers who have not filed their 2010 tax return and that there is approximately $1.1 billion dollars of unclaimed refunds available for those taxpayers.  If you fall in this category, you need to act quickly because the return must be filed by April 18, 2011 to claim a refund for 2010.  Otherwise, the money becomes the property of the U.S. Treasury.
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Reduced SS Withholding Rate for 2011 Only

• Posted on March 24, 2011

If you noticed an increase in your take-home pay this year, it is probably the result of a reduction in Social Security withholding.  But don’t get too accustomed to it; the reduced Social Security withholding is only temporary. 
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Are Your Social Security Benefits Taxable?

• Posted on March 22, 2011

How much, if any, of your Social Security benefits are taxable depends on your total income and marital status.  Generally, if your only income for the year is Social Security benefits, it is not taxable.
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Is a Qualified Tuition Plan for You?

• Posted on March 17, 2011

Qualified Tuition Plans offer a unique opportunity for families to save in a tax-advantaged way for their children’s college education.
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High-Income Taxpayers Can Expect Phase-Outs Restored

• Posted on March 15, 2011

After several years of having their personal exemption deductions and a portion of their itemized deductions phased out, beginning for 2010 and through 2012, high-income taxpayers have regained full benefit of those deductions.
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