Tax Tips

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%,

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

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

Close to a month ago, Congress passed and the President signed into law legislation that overhauls the U.S. health care system and affects nearly all taxpayers, many employers, and many elements of the health care industry (the Patient Protection and Affordable Care Act & the follow up Reconciliation Act, i.e. Health Care Act). The massive overhaul contains a host of tax changes, many of which are both complex and novel. To compound the challenge, the tax changes go into effect over a number of years. We’ll start with a few of the main tax law changes and then present a

Under the Hiring Incentives to Restore Employment (HIRE) Act, enacted March 18, 2010, two new tax benefits are available to employers who hire certain previously unemployed workers. The first, referred to as the payroll tax exemption, provides employers with an exemption from the employer’s 6.2 percent share of social security tax on wages paid to qualifying employees, effective for wages paid from March 19, 2010 through December 31, 2010. In addition, for each qualified employee retained for at least 52 consecutive weeks, businesses will also be eligible for a general business tax credit, referred to as the new hire retention

The Housing Assistance Tax Act of 2008, (“the Housing Act”) was signed into law on July 30, 2008. The Housing Act consists of tax breaks for homebuyers and homeowners. To offset these tax breaks, the Housing Act also includes revenue raisers, the most important being the reduction of the homesale exclusion. Below is a summary of the three main provisions of the Housing Act: Credit for first-time homebuyers, Property tax deduction for non-itemizers, and, Tightened homesale exclusion revenue raiser. Credit for first-time homebuyers The single largest provision in the Housing Act is a measure allowing individuals buying their first home

The IRS has shortened the extension period from 6 to 5 months for Partnerships (including Limited Liability Companies filing as partnerships), and Estates/Trusts that file Form 1041. This one-month reduction is effective for returns due on or after January 1, 2009. Note that the original due date of April 15th (for calendar year taxpayers) has not been changed. Thus, the new law changes the extended due date to September 15th, rather than October 15th. The rationale for the earlier due date is that this will allow individual taxpayers to receive their Schedule K-1s in advance of the October 15th extended

Below we have reproduced an excerpt from an article by the American Institute of Certified Public Accountants (“AICPA”) regarding the common factors that the IRS takes into account when determining employee vs. independent contractor status. The factors are intended as guidelines, not as strict rules. The IRS itself says, “the degree of importance of each factor varies depending on the occupation and the factual context in which the services are performed.” The IRS developed the factors based on relevant cases and rulings. They focus on the substance of the arrangement—whether the person for whom the services are performed exercises sufficient

As a parent with college-bound children, you are or will soon be concerned with either setting up a financial plan to fund for future college costs, or, if your children are already college age, with paying for current or imminent tuition, etc. bills. We’d like to address both of these concerns by suggesting several approaches that seek to take maximum advantage of tax benefits to minimize your expenses. (Please note that the following suggestions are strictly related to tax benefits. You may have non-tax-related concerns that make the suggestions inappropriate.) Planning for college expenses. In many cases, transferring ownership of

If you’re self-employed and work out of an office in your home, you should know about the strict rules that govern whether you can deduct your home office expenses. You may deduct your home office expenses if you meet any of the three tests described below: the separate structure test, the place for meeting patients, clients or customers test, or the principal place of business test. You may also deduct the expenses of certain storage space if you qualify under the rules described further below. If you do qualify, you compute your home office deductions on Form 8829, and report