The Health Care and Education Reconciliation Act of 2010 imposes a Medicare contribution tax of 3.8% on unearned income of individuals, estates, and trusts. The net investment income tax applies to most trusts and estates beginning January 1, 2013. Trusts that are treated as business entities, certain state-law trusts, tax-exempt trusts, and grantor trusts are exempt from the tax.
READ MOREThe Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (often to as “Obamacare” or “Health Care Reform”) was signed into law in March 2010. (The law was upheld as constitutional by the U.S. Supreme Court in June 2012.)
The primary purpose of the law is to extend health care to millions of uninsured Americans. Here is a summary of how it may affect you so you can prepare for the short- and long-term impacts before they occur.
READ MOREA self-employed client asked how the Federal government and the IRS will know in 2014 if she was or was not covered by health insurance. She does not currently have coverage and was evaluating not making any changes. However, unless she told the IRS, how would the government know to assess a penalty?
READ MOREWhile there is no fool proof way to guarantee your income tax return will not result in an audit by the Internal Revenue Service, there are a few things that can help you avoid way about 1.5 million Americans experience.
A return can be flagged randomly in an IRS study of the behavior of similar taxpayers, such as those in the same profession. Audits often result from:
READ MOREIf you are a student or have a student in your household starting a summer job, please remember:
1. Fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to figure how much federal income tax to withhold from workers’ paychecks. If the student did not pay income taxes last year and does not expect to make enough to pay this year ($4,000 is probably a safe estimate), the student can file as “EXEMPT” from taxes and not have any withholding.
READ MOREThe 1% Temporary Transaction Privilege Tax approved by Arizona voters in May 2010 will expire June 1, 2013. That means more money in your pocket.
One of the questions at last night’s Panel of Professionals hosted by KFNN Radio 1510 asked if investors should be concerned private equity firms are beginning to purchase fixed annuity companies. Bloomberg Businessweek had a story on it this morning. Fifteen percent of the fixed annuity market is handled by Wall Street-backed insurers, so you (and regulators) should be concerned.
READ MOREThe tax law is probably going to change in 2013 and chances are, most people will be paying more to the government. The Obama administration is advocating changes to Social Security and placing a heavier burden on those with higher incomes. Understandably, there is not agreement by our elected officials. As of mid-April, here are some of the current proposals that would affect 2014:
READ MOREIf you recently changed your name (married or divorced), be sure to notify the Social Security Administration before you file your taxes with the IRS. If the name on your tax return does not match SSA records, the IRS will flag it as an error and that may delay your refund. This includes your dependents.
File Form SS-5, Application for a Social Security Card, (www.ssa.gov, by calling 800-772-1213) at your local SSA office or by mail with proof of your legal name change if:
READ MOREYour children may help you qualify for valuable tax benefits, such as certain credits and deductions. If you are a parent, here are eight benefits you shouldn’t miss when filing taxes.
Identity theft concerns:
On January 15, 2013, the IRS released Rev. Proc. 2013-13, which gives taxpayers an optional safe-harbor method to calculate the amount of the deduction for expenses for business use of a residence during the tax year under Sec. 280A, beginning with the current tax year. The highlights are:
On January 23, 2013, the IRS announced that it is postponing for at least one year the requirement that domestic entities report interests in specified foreign financial assets. In Notice 2013-10, the IRS says that when it issues final regulations, they will apply no earlier than to tax years beginning after Dec. 31, 2012.
Sec. 6038D requires individuals to report interests in “specified foreign financial assets” (SFFAs) when filing their federal income tax returns. The IRS is also authorized under Sec. 6038D to apply the reporting requirement to any domestic entity that is formed or availed of principally to avoid reporting (a specified domestic entity). In December 2011, the IRS issued temporary and proposed regulations (T.D. 9567; REG-130302-10) on the Sec. 6038D reporting requirement. The proposed regulations set out conditions under which a domestic entity will be considered a specified domestic entity and, therefore, required to report SFFAs in which the entity holds an interest. They were proposed to apply to tax years beginning after Dec. 31, 2011.