Although the American Taxpayer Relief Act (enacted in January of this year) added or extended several key tax provisions and rates, dozens of tax provisions are set to expire at the end of 2013 (though most relate to businesses, if you have a pass through entity you could feel the affect). Here is a list of a few of them (along with brief commentary):
The Internal Revenue Service has released the final regulations for the 0.9 percent Additional Medicare Tax that was imposed as part of the Affordable Care Act.
The final regulations that were released last week more or less adhere to the proposed regulations that were released last year for the Additional Hospital Insurance Tax on income above threshold amounts, usually referred to as the Additional Medicare Tax (see Tax Strategy: Proposed Guidance on Medicare Contribution Taxes). The tax took effect on January 1 of this year and applies to wages, compensation, and self-employment income above a threshold amount received in taxable years beginning after Dec. 31, 2012. The threshold amounts are $200,000 for single taxpayers and $250,000 for married filing jointly (or $125,000 for married filing separately) taxpayers.
In an IRS Legal Advice issued by Field Attorneys employee bonuses paid after year end (within 2 and ½ months) that are accrued as of the year-end could be deductible in the year paid instead of the year accrued.
Basically, if the amount is not fixed and the right to revoke or modify is present, the bonus accrued as of year-end would be deductible in the year paid.
This could remove a key deduction in your yearend tax planning!
If you are an accrual basis taxpayer and accrue employee bonuses at year end to be paid in the subsequent year, we recommend you consult with a tax advisor to make sure that your deduction is sustainable.
In my last blog I discussed one of these errors – selling your business the wrong way.
On November 21st, 2013 I, along with several other speakers will present these errors and talk about how to avoid them.
This is a great opportunity to meet us if you are not already familiar with our firm and what we can do for you.
This seminar is a two hour lunch meeting located at JT Schmid’s on Katella in Orange County, CA.
If you would like to attend please contact us immediately as seating is limited.
Although there is a small cost ($50) it includes a great meal from JT Schmid’s from a special menu we have selected for our attendees.
Please call “Brenda” at 949/833-5837 (or e-mail us at email@example.com)
I hope you can attend this important information presentation.
Selling your business can be a rewarding time where you receive the value of your years of time and effort you invested to build a company.
Many sellers are then surprised to learn that the proceeds from the sale left over to them, after paying taxes, can sometimes be less than 50%.
Investing time as early as possible in consultation with a professional can lead to a much higher amount of the value of your company winding up in your hands instead of Uncle Sam’s.
Consulting with a professional will lead to a discussion of what to sell, timing of when to sell, what type of entity is best to sell and much more.
If you are considering selling the business you built, we offer a free ½ hour consultation where we can begin to explore the process with you of keeping more of
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Although slow rises in prices have been paired with only modest wage increases in many sectors of the current economy, taxpayers will at least receive some relief in 2014, thanks to the mandatory annual inflation adjustments provided under the Tax Code, according to CCH, part of Wolters Kluwer and a leading global provider of tax, accounting, and audit information, software, and services.
Wolters Kluwer, CCH released estimated ranges for each 2014 tax bracket as well as projections for a growing number of inflation-sensitive tax figures, such as the personal exemption and the standard deduction.
“Indexing for inflation has become an established part of our tax system, and it is likely to be a part of the tax law for the foreseeable future – even as Congress debates changes to the tax rates themselves,” said George Jones, JD, LLM, and CCH senior federal tax analyst. “Most
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The report, from the Treasury Inspector General for Tax Administration, pointed out that the IRS’s own employees and contract employees are required under the Internal Revenue Manual to pay any federal tax debts and file their taxes on time, but employees of IRS contractors are not held to the same standards.
TIGTA found that as of June 14, 2012, 691 of the 13,591 IRS contractor employees, or 5 percent, it reviewed had $5.4 million in federal tax debt. These debts were either agreed to by the taxpayers or affirmed by the court. Of the 691 contractor employees, 352 are not currently on a payment plan to resolve their tax debts.
Most of the contractor employees appeared to have been compliant when their initial staff-like access was granted, but at least 319 contractor employees had tax debts assessed after they were granted staff-like access,
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For more than a decade, Tim Quinn, CPA, CGMA, negotiated the tedious, back-and-forth magic of building the annual budget for Northern Quest Resort & Casino.
Every year, it was the same time-consuming endeavor: Quinn, the company’s vice president of finance, would send out budget worksheets to 45 department heads. The department heads would return them with inflated spending projections, or low-balled revenue projections, for the coming fiscal year. Quinn would question the validity of those projections. Pushback would ensue, but Quinn and his staff would prevail, often by adjusting the projections to something that more realistically reflected historical trends.
After several rounds of wrangling, voilà: The budget was born.
There’s an old adage that “there’s nothing new under the sun” and so it is inside the Beltway. As you are well aware, the federal government suspended most of its operations on Oct. 1 after Congress failed to pass a bill to extend funding to mid-November, the first such shutdown in 17 years. Strong political discourse is alive and well in America and it is part of the price we pay for democracy. It was that way in 1996 when a shutdown lasted three weeks. Hopefully a compromise can be reached quicker this time around.
The Internal Revenue Service has temporarily stopped sending out tax refunds, and the Tax Court has suspended operations during the federal government shutdown, as lawmakers in Congress continue their battle over delaying or defunding “Obamacare” for a year.
“Tax refunds will not be issued until normal government operations resume,” said the IRS. The IRS emphasized, however, that the underlying tax law remains in effect, and all taxpayers should continue to meet their tax obligations as normal.
“Individuals and businesses should keep filing their tax returns and making deposits with the IRS, as they are required to do so by law,” said the IRS. “The IRS will accept and process all tax returns with payments, but will be unable to issue refunds during this time. Taxpayers are urged to file electronically, because most of these returns will be processed automatically.”
In addition, the IRS
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