Howard Rosen, CPA, JD, AEP, and President of Conner Ash P.C. was interviewed by Chana Joffe-Walt of NPR about some of the most confusingly named tax deductions - and what they really mean.
On Jan. 15, the IRS announced a new simplified home office deduction, which is available beginning with 2013 income tax returns (not the 2012 returns generally due April 15, 2013).
The American Taxpayer Relief Act of 2012 (ATRA) revives for 2012 and 2013 the opportunity to make tax-free IRA distributions (up to $100,000 per year) for charitable purposes. If you’re age 70½ or older, you can make a direct contribution from your IRA to a qualified charitable organization without owing any income tax on the distribution. This “charitable IRA rollover” can be used to satisfy required minimum distributions.
The IRS has updated income-tax withholding tables for 2013 in light of the American Taxpayer Relief Act of 2012, signed into law Jan. 2. Also, because the payroll tax holiday hasn’t been extended, employers must withhold Social Security tax at the rate of 6.2% rather than at the 4.2% rate that applied in 2011 and 2012.
On Jan. 2, Congress passed the American Tax Relief Act to address the fiscal cliff. The act makes permanent 2012 income tax rates for most taxpayers, as well as alternative minimum tax relief. It also extends many other breaks for individuals and businesses. However, the fiscal cliff deal does result in some tax increases...
To take a 2012 charitable donation deduction, the gift must be made by Dec. 31, 2012. According to the IRS, a donation generally is "made" at the time of its "unconditional delivery." But what does this mean? Is it the date you, for example, write a check or make an online gift via your credit card? Or is it the date the charity actually receives the funds -- or perhaps the date of the charity's acknowledgment of your gift?
In the early morning hours of Jan. 1, 2013, the Senate, by a vote of 89-8, passed H.R.8, the "American TaxpayE!r Relief Act" (the Act). Late on that same day-hours after the government had technically gone over the "fiscal cliff'-the House of Representatives, by a vote of 257 to 167, also passed the bill. The Act, which the President is expect to quickly sign into law, would prevent many of the tax hikes that were scheduled to go into effect this year and retain many favorable tax breaks that were scheduled to expire. However, it would also increase income taxes for some high-income individuals and slightly increase transfer tax rates. This article provides an overview of the Act's key provisions.
If you own highly appreciated assets you've held long term, it may make sense to recognize gains now rather than risk paying tax at a higher rate next year...
Business-related purchases of new or used vehicles may be eligible for Section 179 expensing, and business-related purchases of new vehicles may be eligible for bonus depreciation. But Sec. 179 expensing limits are scheduled to go down in 2013, and bonus depreciation is scheduled to disappear. So you might benefit from purchasing business vehicles before year end.
Howard Rosen, CPA, JD, AEP, and Managing Partner of Conner Ash P.C., was featured in the December issue of Small Business Monthly and offered recommendations for Fiscal Cliff Planning.
The 2012 gift tax annual exclusion allows you to give up to $13,000 per recipient tax-free without using up any of your lifetime gift tax exemption. If you and your spouse "split" the gift, you can give $26,000 per recipient. The exclusion is scheduled to increase to $14,000 ($28,000 for split gifts) in 2013.
If you’re self-employed, you may be able to set up a retirement plan that allows you to make much larger contributions than you could make as an employee. Plus, if you set up one of the following plans by Dec. 31, 2012, you can make deductible 2012 contributions until the 2013 due date of your tax return.
Publicly traded stock and other securities you've held more than one year are long-term capital gains property, which can make one of the best charitable gifts. Why? Because you can deduct the current fair market value and avoid the capital gains tax you'd pay if you sold the property.
By projecting your business’s income for this year and next you can determine how to time income and deductions to your advantage.
Typically, it’s better to defer tax. You can do so by...
President Obama has been reelected, the Senate will remain in the hands of the Democrats (but without a filibuster-proof supermajority) and the House will continue to be controlled by the Republicans. In other words, the political makeup of Washington will be about the same in 2013 as it is now. As a result, it’s still very uncertain what will happen with tax law changes.
In recent years, restricted stock has become a popular form of incentive compensation for executives and other key employees. If you're awarded restricted stock -- stock that's granted subject to a substantial risk of forfeiture -- it's important to understand the tax implications.
The long-term capital gains rate is currently 0% for gain that would be taxed at 10% or 15% based on the taxpayer's ordinary-income rate. But the 0% rate is scheduled to expire after 2012. To lock it in, you may want to transfer appreciated assets to adult children or grandchildren in one of these tax brackets in time for them to sell the assets by year end.
If you have a traditional IRA, you might benefit from converting all or a portion of it to a Roth IRA. A conversion can allow you to turn tax-deferred future growth into tax-free growth. It also can provide estate planning advantages: Roth IRAs don't require you to take distributions during your life, so you can let the entire balance grow tax-free over your lifetime for the benefit of your heirs.
Many businesses may benefit from purchasing assets by Dec. 31 to take advantage of depreciation-related deductions that are scheduled to either disappear or become less favorable in 2013.
Income tax generally applies to all forms of income, including cancellation-of-debt (COD) income. Think of it this way: If a creditor forgives a debt, you avoid the expense of making the payments, which increases your net income.
After being in session for only two weeks in September, Congress has now adjourned until after the November 6 elections — without reducing any tax law uncertainty. The "lame duck" session is the next possibility for legislative activity. The Senate will return for the week of Nov. 15, break for the week of Thanksgiving and return again on Nov. 29 for a period of time yet to be determined. The House's schedule likely will be similar.
Now that the U.S. Supreme Court has upheld the Patient Protection and Affordable Care Act of 2010, businesses need to start preparing for provisions that will go into effect in 2013 (unless Congress repeals them). One such provision is a new limit on employee contributions to health care Flexible Spending Accounts (FSAs).
Advances in technology and decreases in tax receipts to the federal and state governments have resulted in the Internal Revenue Service ("IRS") and states' departments of revenue increasing the number of audits or examinations to ensure that transactions, whether for income tax or sales & use taxes, are being properly reported and that the proper amount of tax is being remitted.
Conner Ash Partners, Howard Rosen and Brian Hantsbarger and Tax Manager, Gary Dreher hosted a presentation on Roth conversions for The Professional Advisory Counsel at Enterprise Trust Company.
