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Happy Holidays! December 28, 2011

Posted by bradstreetblogger in : Tax Tip, Taxes, Taxes, Uncategorized , add a comment

We Are Going to Take a Break From Tax Planning This Week 

Instead, the family of Bradstreet & Company would like to wish you and your family the most joyous holiday season and best wishes for 2012. 

We hope you have enjoyed the Tax Tip of The Week this year.  Please let us know what topics you would like us to cover as we enter the New Year. 

Is The Tax Tip of the Week Real?

While your kids are questioning if Santa is real, we continue to receive some interesting feedback that some of you don’t realize this is really Bradstreet CPAs reaching out each week (… some suspect this is a “packaged” communication to which we add our logo).   Well, rest assured, it’s us and we’d love to hear from you.  

Enjoy the week and, “Yes Virgina, there is a Santa Claus.” 

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.

Rick Prewitt – the guy behind TTW

Tax Tip of the Week Video Series:

http://youtu.be/6MRNlbVuLwU

…until next week.

 

What’s New—What Stays the Same—What is Coming | Tax Tip of the Week | No. 124 December 21, 2011

Posted by bradstreetblogger in : Tax Tip, Taxes, Taxes, Uncategorized , add a comment

2011 – and Beyond – Tax Law Changes

As another year comes to an end and the upcoming tax filing season looms before us, we wanted to send you this short list of the ever-changing tax laws.  This is only a partial summary of what to expect this year.  Please call us if you have any questions.

What’s New in 2011

– Nominal increases on personal exemptions and standard deductions

– Exemptions still not subject to AGI phase out

– Still have 0% or 15% tax on long-term capital gains and qualified dividends – through 2012

– Standard mileage rates for auto business use- split year again

– $0.51/mile 1/01/11 – 6/30/11

– $0.55.5/mile 07/01/11 – 12/31/11

– Don’t forget medical and charitable mileage deductions

– New Form 8867 “Due Diligence” form for EIC claims (need to attach this year)

– Home Energy Credits are a maximum of $500 for 2011 (must reduce credit by amounts claimed in 2006 – 2010)
– 2% reduction of the social security tax portion of SE tax

– Estate Exclusion up to $5 million with a 35% tax rate

– One set of rules this year!

– Back to $1 million exclusion and 55% tax rate in 2013?

– New Schedule D and Form 8949

– Report proceeds and basis on Form 8949 which flows to Sch D

– Must indicate on Form 8949 whether basis is shown on 1099-B, not shown on 1099-B, or no 1099-B was issued

– Audit Alert!

What Was  Extended for 2011

– Choose either sales tax deduction or state/local deductions on Sch A
– Lost the option to include additional sales tax paid on new cars and large purchases

– PMI deduction- expires in 2011

– $250 above-the-line Educator deduction

– Tax-free charitable distributions on IRA RMDs-expires in 2011

– No AGI phase out on Sch A deductions

– AMT “Patch”- expires in 2011

– Self-employed can use Medicare premiums for SE health insurance deduction – Amend 2008 & 2009?

– Refundable Adoption Credit-expires in 2011

– Gift Exclusion still at $13,000

What We Lost for 2011

– No “Expanded” 1099-MISC reporting

Note: Sch E instructions are not updated

– New Form 1099-K—but no reporting of credit card income on 2011 business tax forms

– First-time Home Buyer Credit

– COBRA subsidy for the unemployed

– Making Work Pay Credit

– Self-employed health insurance reduction on SE taxes

What is Coming in 2013

– Increased Medicare premiums for AGI over $250K married/$200K single filers

– A new 3.8% Medicare tax on investment income-If AGI over $250K married/$200K single filers

– The AGI floor to deduct medical expenses increases to 10%

– Will remain at 7.5% for those 65 and older

– Marriage penalty returns

– AGI Phase-outs return

We are just a phone call away if you have any questions.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.

Rick Prewitt – the guy behind TTW

Tax Tip of the Week Video Series:

http://youtu.be/6MRNlbVuLwU

…until next week.

 

If You Are Age 70 1/2 – Take Out Your RMDs From Your IRAs Before 12.30.11 | Tax Tip of the Week | No. 123 December 14, 2011

Posted by bradstreetblogger in : Tax Tip, Taxes, Taxes, Uncategorized , add a comment

Don’t Forget Your Required Minimum Distribution (RMDs) for 2011 by December 30th! 

The RMD rules apply to all employer sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans and 457(b) plans.  The RMD rules also apply to traditional IRAs and IRA-based plans such as SEPs, SARSEPs and SIMPLE IRAs.

Required Minimum Distributions (RMDs) generally are minimum amounts that an IRA or a retirement plan account owner must withdraw annually starting with the year that he or she reaches 70 ½ years of age or, if later, the year in which he or she retires.  An account owner must take the first RMD for the year in which he or she turns 70 ½.  However, the first RMD payment can be delayed until April 1st of the year following the year in which he or she turns 70 ½.  For all subsequent years including the year in which the first RMD was paid by April 1st, the account owner must take the RMD by December 31st of the year.  If the 31st falls on a weekend, the distribution must occur no later than the Friday preceding.  Consult us for any assistance regarding which year to take your RMD.

One Tax Benefit to Note:

The tax law allows taxpayers 70 ½ to donate directly from their IRAs to a charity for 2011.  The amount of the charitable contribution is excluded from your taxable income.  Transferring money directly from the IRA to the charity is a way to get a tax break for your donation if you don’t itemize deductions on your tax return.  Be aware that you cannot do both – exclude the donation from income and claim a tax deduction for the donation.

There is a stiff penalty if an account owner fails to withdraw a RMD.  The amount not withdrawn is taxed at 50%.  So make sure that you don’t miss this deadline.

Call us if you need help with Required Minimum Distribution tax rules.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.

Rick Prewitt – the guy behind TTW

Tax Tip of the Week Video Series:

http://youtu.be/lD1GCzl2AM0

…until next week.

 

Form 1099-MISC and Schedule E Instructions Are Wrong! | Tax Tip of the Week | No. 122 December 7, 2011

Posted by bradstreetblogger in : Tax Tip, Taxes, Taxes, Uncategorized , 1 comment so far

Don’t Read the Instructions!

Several months ago (see TTW #90) we told you that the requirement for all businesses to issue a 1099-MISC to any entity to whom they paid in excess of $600 was repealed. (Remember, this was the rule that would have required a small business owner to issue a 1099-MISC to Best Buy if they bought a computer from them).  This reporting requirement also applied to those that had rental properties.

However, when you read the instructions for preparing a 2011 Form 1099-MISC and Schedule E (the form used to report rental income) the reporting requirement for rental property owners is still included!

At the time of this writing it does not appear the IRS is going to update their instructions.  This could lead to a lot of confusion and extra work for those uninformed.

The old rules for issuing a 1099-MISC have remained unchanged.  See TTW #77 for a refresher on when to issue a 1099-MISC.

While it is a good idea to start with the instructions when assembling your kids new bike—don’t believe everything you read.  (Hopefully an update will occur shortly).

Let us know if you have any questions.You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.

Rick Prewitt – the guy behind TTW

Video Tax Tip of the Week:

http://www.youtube.com/watch?v=AJdQ8oM7WFY

…until next week.