December 13, 2012 – Year-End Tax Planning for Businesses
In recent years, end-of-the-year tax planning for businesses has been complicated by uncertainty over the future availability of many tax incentives. This year is no different. In 2010, Congress extended many business tax incentives for one or two years. Read more...November 26, 2012 – Standard Mileage Rates for 2013
The IRS recently issued the 2013 standard mileage rates used to calculate the deductable cost of operating an automobile for business, charitable, medical or moving purposes. Read more...November 13, 2012 – Retroactive California Tax Increase
On November 7, 2012, California voters approved Proposition 30, the “Governor´s Ballot Initiative”. The ballot measure retroactively increases income tax rates effective January 1, 2012. The following rate increases are effective for seven years. Read more...November 8, 2012 – 2013 California State Disability Insurance Rate & Wage Base
The California Employment Development Department recently announced the 2013 State Disability Insurance (SDI) rate and wage base. Read more...October 29, 2012 – Third Quarter 2012 Federal Tax Developments
During the third quarter of 2012, a handful of important federal tax developments covered a variety of critical areas. Highlighted below are some of the more significant developments for you. Read more...October 24, 2012 – Planning for the 3.8% Medicare Tax on Investment Income
The health care reform package (the Patient Protection and Affordable Care Act and the Health Care and education Reconciliation Act of 2010) imposes a new 3.8 Medicare contribution tax on the investment income of higher-income individuals. Although the tax does not take effect until 2013, it is not too soon to examine methods to lessen the impact of the tax. Read more...September 14, 2012 – California Use Tax on Internet Purchases Starts 9/15/12
You may notice your online purchases will be a bit more expense. That´s because, starting September 15, California will require online and remote retailers to collect use tax from California customers, based on both affiliate nexus and click-through nexus provisions enacted by AB 155 (Ch. 11-131).The California Department of Finance issued a certification letter on August 15 confirming that federal legislation on the issue of online tax collection had not been enacted, which would have resulted in the remote sellers tax collection provisions taking effect in 2013. The BOE also issued a Special Notice to retailers, notifying them that on and after September 15, 2012, an out-of-state retailer will be considered engaged in business in California and required to register with the BOE to collect and remit use tax if the retailer has a substantial nexus with California.
September 6, 2012 – Kiddie Tax
Certain children who have investment income greater than $1,900 may be subject to tax based on their parents´ income (the so-called “Kiddie Tax”). Read more...August 21, 2012 – U.S. Supreme Court´s Decision on Health Care Law
On June 28, 2012, the United States Supreme Court issued its long-awaited decision on the constitutionality of the Patient Protection and Affordable Care Act (PPACA) and its companion law, the Health Care and Education Reconciliation Act (HCERA). In a nutshell, the nation´s highest court upheld the law, except for certain Medicaid provisions. The 5 to 4 decision preserves many far-reaching tax provisions and health insurance reforms. In coming months, lawmakers and legal scholars will examine all of the nuances of the Court´s highly complex decision. More immediately, individuals and businesses are concerned about what steps they need to take next. Read more...August 13, 2012 – IRS Fresh Start Initiative
The Internal Revenue Service recently announced another expansion of its “Fresh Start” initiative by offering more flexible terms to its Offer in Compromise (OIC) program that will enable some of the most financially distressed taxpayers to clear up their tax problems and in many cases more quickly than in the past. Read more...August 6, 2012 – Job Search Expenses
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. Read more...July 30, 2012 – Proposed Regulations for Local Lodging Expenses
In the past, employees were able to deduct expenses for job travel away from home, but could not deduct lodging expenses for the cost of staying in the locality where they work (local lodging). However, in 2007 the IRS announced that the regulations would be amended to change the treatment of local lodging. The Service also stipulated that until the amendment took place, an employee´s deduction for local lodging would be allowed if the lodging was temporary and necessary for participation in a business function of the employer. Read more...July 23, 2012 – Second quarter important federal tax developments
You can read highlights of the more important developments HERE.July 13, 2012 – Mid-year brings no resolution to fate of Bush-era tax cuts
Hopes for a pre-election resolution to the fate of the Bush-era tax cuts, extenders and other tax incentives are quickly fading as summer approaches. This year is increasingly looking like a replay of 2010, the last time the Bush-era tax cuts were facing imminent expiration. The White House, the Democratic-controlled Senate and the GOP-controlled House all have different opinions on the fate of these tax incentives and negotiations, which have been few and far between, and have quickly bogged down. Read more...June 27, 2012 – Charitable Contributions
In addition to the usual cash donations that you make throughout the year, you may be able to deduct the cost of using your vehicle if you volunteer your time or provide a service to a qualified charitable, educational or nonprofit organization. Read more...June 18, 2012 – California Franchise Tax Board Provides Updated Guidance on the Real Estate Property Tax Deduction
The California Franchise Tax Board (FTB) has recently updated their website to reflect updated guidance on the real estate property tax deduction, as well as instructions on how to file amended returns if taxpayers incorrectly reduced the deductible property tax on their California income tax returns.Although the FTB has changed their guidance on what is and is not deductible, certain portions of the property tax paid is nondeductible.
The updated guidance from the FTB can be FOUND HERE.
May 29, 2012 – Independent Contractor vs. Employee
Currently, the likelihood of your business being involved in a worker classification or employment tax audit is increased because the IRS is aggressively attempting to reduce the “tax gap”, which is the annual shortfall between taxes owed and taxes paid. Employment tax noncompliance is estimated by the IRS to account for approximately $54 billion of the tax gap. Under-reporting of FICA makes up $14 billion; under-reporting of self-employment tax accounts for $39 billion; and under-reporting of unemployment tax accounts for $1 billion in lost revenue. Read more...
May 21, 2012 – Taxability of Social Security Benefits
Most retirees do not like hearing that their Social Security benefits are subject to federal income tax. Understanding just how much of your benefits are taxable is often confusing. Kiplinger published an article that does a good job of explaining the provisions for determining how much of your social security benefits are taxable. You can read it HERE.
A bit of good news is that while a maximum of 85% of your Social Security benefits are subject to federal income tax, none of your Social Security benefits are subject to California income tax.May 10, 2012 – Federal Tax Developments During the First Quarter of 2012
Lots of new tax developments concerning
- Payroll tax holiday
- IRS Fresh Start initiative
- Corporate tax reform
- Administration´s tax proposals
- Repair regs
- Foreign accounts
- Foreign tax credit
- Vehicle depreciation limits
- Audits
- Estate tax
- The tax gap
- Identity theft
- Innocent spouse
- Damages
- S corporations
- Veterans
- Health care
March 24, 2012 – Alternate Minimum Tax
There is a lot of attention these days on the alternative minimum tax (AMT). The AMT is a separate tax calculation that is intended to ensure that higher income taxpayers pay at least a minimum amount of tax on their income. Under the AMT rules, some deductions taken for regular tax purposes are not allowed, or are limited, for AMT purposes. Read more...
February 21, 2012 – Payroll Tax Cut Extended
Last week the House and Senate voted to extend the payroll tax cut and unemployment benefits, while also avoiding a Medicare fee cut for doctors for the rest of the year. President Obama has promised to sign the legislation, which means Americans will continue to receive bigger paychecks through the rest of the year.
February 4, 2012 – Are Frequent Flyer Miles Taxable?
There has been a lot of discussion recently over Citibank´s recent issuance of 1099 forms reporting taxable income to those who received frequent flyer miles for opening a checking or savings account. Read more...
January 23, 2012 – Can I Take a Charitable Deduction If I Donate the Use of My Vacation Home or Timeshare?
I am frequently asked the question above by clients. It is often when a client donates as an auction item to a charity the use of their vacation home or timeshare. Unfortunately, no charitable deduction is available in this situation. Read more...
January 16, 2012 – Required Minimum Distribution Rules for Retirement Plans
For those who will be 70 1/2 by year-end, you may be subject to the required minimum distribution (RMD) rules affecting taxpayers who participate in a retirement plan. A required minimum distribution is the amount a plan participant must withdraw from his or her retirement plan account each year after the participant retires or reaches age 70 1/2 (depending on the type of plan). Read more...
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