Year-End Tax Planning: 2021

With year-end approaching, its time to start thinking about moves that may help lower your tax bill. Once again, this year’s planning is challenging due to the uncertainty surrounding pending legislation that could increase top rates on both ordinary income and capital gains starting next year. The standard year-end approach of deferring income and accelerating deductions to minimize taxes will continue to produce the best results for all but the highest income taxpayers. If proposed tax increases do pass, the highest income taxpayers may find that the opposite strategies produce better results: pulling income into 2021 to be taxed at

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Tax Cuts and Jobs Act – Summary of Changes Affecting Individuals

The recently enacted Tax Cuts and Jobs Act (TCJA) is a sweeping tax package. Here’s a look at some of the more important elements of the new law that have an impact on individuals. Unless otherwise noted, the changes are effective for tax years beginning in 2018 through 2025. • Tax rates. The new law imposes a new tax rate structure with seven tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The top rate was reduced from 39.6% to 37% and applies to taxable income above $500,000 for single taxpayers, and $600,000 for married couples filing jointly. The

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New Paid Sick Leave Provisions– Prop 206 effective July 1, 2017

When Prop 206 (The Fair Wages and Healthy Families Act) passed at the end of 2016 the Minimum Wage Increase received a lot of attention. Receiving far less publicity were the New Paid Sick Leave provisions. Beginning July 1, 2017, all Arizona employers (except State & U.S. Government) are subject to the mandatory minimum paid sick leave provisions of Prop 206. Click for a 2-page pdf summarizing the new law. Here are some highlights: – Employers must accrue paid sick time for all employees at a minimum rate of one hour of earned paid sick time for every 30 hours

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New Due Dates for 1099s and W-2s, Increased Penalties & 28% Backup Withholding

The IRS has published on its website (Increase in Information Return Penalties) a notice reminding businesses of the changes in due dates for information returns this year along with more significant penalties. The notice provides: Beginning with the 2016 tax year, the due dates for filing Forms W-2 and W-3 with SSA will be January 31 of the following year, whether you file using paper forms or electronically. Form 1099-MISC will be due to the IRS by January 31 of the following year when you’re reporting non-employee compensation payments in box 7. Otherwise, file by February 28 if filing by

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IRS warns of fake Affordable Care Act-related tax bill emails

IRS and the members of the Security Summit have issued an alert to taxpayers and tax professionals to be on guard against fake emails purporting to contain an IRS tax bill related to the Affordable Care Act. IRS issues a warning. IRS and the Security Summit members are informing taxpayers and tax professionals that IRS has received numerous reports around the country of scammers sending a fraudulent version of CP2000 notices for tax year 2015. The CP2000 is a notice commonly mailed to taxpayers through the United States Postal Service. It is never sent as part of an email to

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President signs extenders bill into law

On Dec. 19, President Obama signed into law H.R.5771, the “Tax Increase Prevention Act of 2014”. The bill generally provides for a 1-year extension, through 2014, of over 50 expired or expiring individual, business, and energy provisions, many of which have been on the books for years but which technically are temporary because they have a specific end date. Note these extenders generally expire on 12/31/14, so once again taxpayers are left with uncertainty regarding tax planning for 2015. Key business tax provisions that were extended for the 2014 tax year include: Section 179 & Bonus first-year depreciation. For businesses,

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IRS Repeats Warning about Phone Scams

Here is a recent press release from the IRS. As always, please contact us if you receive any communication from the IRS or state. IR-2014-81, Aug. 13, 2014 WASHINGTON — The Internal Revenue Service and the Treasury Inspector General for Tax Administration continue to hear from taxpayers who have received unsolicited calls from individuals demanding payment while fraudulently claiming to be from the IRS. Based on the 90,000 complaints that TIGTA has received through its telephone hotline, to date, TIGTA has identified approximately 1,100 victims who have lost an estimated $5 million from these scams. “There are clear warning signs

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2012 Taxpayer Relief Act

The recently enacted 2012 American Taxpayer Relief Act is a sweeping tax package that includes, among many other items, permanent extension of the Bush-era tax cuts for most taxpayers, revised tax rates on ordinary and capital gain income for high-income individuals, modification of the estate tax, permanent relief from the AMT for individual taxpayers, limits on the deductions and exemptions of high-income individuals, and a host of retroactively resuscitated and extended tax breaks for individual and businesses. Here’s a look at the key elements of the package: Tax rates. For tax years beginning after 2012, the 10%, 15%, 25%, 28%,

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Tax Breaks are available for travelers who mix a bit of pleasure with their business travel

Although video conferencing has made inroads in the ranks of business travelers, there still are many situations where it’s necessary to travel away-from-home overnight for face-to-face meetings with staff, management, or customers. Businesspeople or professional who must travel for work reasons should keep in mind that they may be able to qualify for a travel bargain by piggybacking a vacation onto an out-of-town business trip. In effect, the business traveler gets free vacation airfare if the trip is set up the right way. And if the travel is undertaken for an employer, a properly set up reimbursement arrangement for the

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Repeal of expanded 1099 requirements signed into law

The President has signed the “Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011.” This new law retroactively repeals unpopular Form 1099 information reporting rules added by 2010 legislation. Here are highlights of the tax changes in the Act. Original information reporting rules. Before amendment by the Small Business Jobs Act of 2010 and the Patient Protection and Affordable Care Act (PPACA), payments totaling at least $600 in a single calendar year to a single recipient were required to be reported to IRS. Reporting on Form 1099 was required only when the payor was considered to

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