Call us today for all your accounting needs!

(203) 452-7489

 

Tax Tips for January
  • Will the payroll tax cut apply for all of 2012? Yes, eventually. With the 2012 elections coming up, neither side wants to be responsible for lowering workers' take-home pay.
  • What's going to happen with the Bush income tax cuts after next year? A one-year extension, in all likelihood. Although they are set to terminate after 2012, we foresee Congress approving an extension of all the rate reductions.
  • Is the estate tax exemption going to fall after 2012? No. Despite rumors. The current $5 million exemption is likely to be extended at the end of next year. The same goes for the portability of exemptions between spouses. It will be extended as well.
  • Will Congress revive the break for direct IRA payouts to charity for 2012? Yes. The provision allows seniors who are 70 1/2 and older to donate up to $100,000 a year from their IRA's directly to charity. Ditto for the other expiring provisions...higher AMT exemptions, R&D credit, write-offs for state sales taxes, teachers' supplies, etc.
  • Regular IRA's must be set up by April 17, 2012 for 2011 deductions. And the deadlines for 2011 contributions to Keogh plans and SEPs is October 15, 2012, if you get a filing extension, not October 17, as we wrote. We sincerely regret the errors.
  • Taxpayers with lots of financial assets abroad will have to file Form 8938, beginning with tax returns filed in 2012. Married individuals who file joint returns and live in the U.S. must attach Form 8938 if the value of their foreign financial assets exceeds $100,000 at the end of 2011 or tops $150,000 at any time during the year.
  • Limited partners or LLC owners who have management rights can escape passive loss treatment by demonstrating that they meet one of seven standard tests for material participation. This relief should enable more limited partners and LLC members to deduct their losses in the activity.

The Service is expanding its audit guide for cash intensive businesses. The handbook also contains chapters on other businesses...bail bondsmen, beauty shops, scrap metal firms, car washes, arcades, mini-marts and laundromats.

Reminder to preparers of returns claiming the earned income tax credit: The due diligence checklist has to be submitted with the filed return, beginning with returns filed in 2012. Before, preparers had to complete Form 8867.
 

CT Web Design by Antelope Networks
Copyright © 2009 Glen J. Belush, CPA.