Mar 28 2011
Printable Forms Available: Form 2848
Federal Tax Form 2848 is the Power of Attorney and Declaration of Representative form. If you have any questions about completing the needed information, contact us.
Archive for March, 2011
Mar 25 2011
2010 Tax Relief Act Alters Estate and Gift Taxes: Reduced GST
The 2010 Tax Relief Act made some changes to the estate and gift tax. Prior to the new law, there was no estate tax, however some beneficiaries faced possible increases in their taxes due to unfavorable income tax rules. The prior law also allowed for a substantial rise in the estate and other transfer taxes for post 2010 transfers.
Among other changes,the 2010 Tax Relief Act provides for reduced estate, gift and generation-skipping transfer (GST) taxes for 2011 and 2012. The estate tax repeal for 2010 has been kept, but estates wanting zero estate tax for 2010 must elect that option. The modified carryover basis rules that were set to apply for 2010 were also preserved. If the estate does not elect the zero option, the estate tax is calculated using a $5 million exemption, a top tax rate of 35%, and a step-up in basis.
If you have any questions regarding GST, or on tax planning in general, please contact our office.
© 2011 Thomson Reuters/RIA. All rights reserved.
Mar 23 2011
2010 Tax Form 1040: Home-related tax savings
The 2010 Form 1040 reflects a number of new tax breaks we want you to be aware of so you can take full advantage of them. Today’s post addresses changes to the tax laws regarding home-related tax savings.
New to 2010 is the personal casualty and theft loss limit reduction. Each personal casualty or theft loss is limited to the excess of the loss over $100 (instead of the $500 limit that applied for 2009). This yields larger deductions and thus greater tax savings for affected individuals.
Another change regards corrosive drywall damage. A taxpayer who paid for repairs to his personal residence or household appliances because of corrosive drywall that was installed between 2001 and 2008 may be able to deduct those amounts as casualty losses under a special safe harbor crafted by the IRS.
Finally, an eligible first-time homebuyer (and a long-term resident treated as a first-time homebuyer) may be able to claim a first-time homebuyer credit for a home that was purchased in 2010. To qualify, the home must have cost $800,000 or less. You generally cannot claim the credit for a home you bought after April 30, 2010. However, you may be able to claim the credit if you entered into a written binding contract before May 1, 2010, to buy the home before July 1, 2010, and actually bought the home before October 1, 2010.
If you have any questions about how these tax benefits may apply to you, or tax planning in general, please contact out office.
© 2011 Thomson Reuters/RIA. All rights reserved.
Mar 21 2011
Printable Forms Available: Form W-9
To assist our clients in their tax preparation needs, we have included some key tax forms on our website that can be printed. Federal form W-9, which is used to a federal tax i.d., is one of the forms available.
Mar 18 2011
Tax Relief Act of 2010: Expired Business Tax Breaks Retroactively Reinstated and Extended
The Tax Relief Act of 2010 retroactively reinstated a plethora of business tax breaks that expired at the end of 2009 and extended them through 2011. These tax breaks include: the research credit; the new markets tax credit; employer wage credit for activated reservists; 15-year write-off for qualifying leasehold improvements, restaurant buildings and improvements, and retail improvements; 7-year write-off for motorsports entertainment facilities; enhanced charitable deductions for contributions of food inventory, for contributions of book inventories to public schools and for corporate contributions of computer equipment for educational purposes; expensing of environmental remediation costs; allowance of the Code Sec.199 domestic production activities deduction for activities in Puerto Rico; and the work opportunity tax credit.
If you have any questions on how these reinstated tax breaks affect you, or on tax planning in general, give us a call.
© 2010 Thomson Reuters/RIA. All rights reserved.
Mar 16 2011
2010 Tax Form 1040: Deduction Limits Ended
The 2010 Form 1040 reflects a number of new tax breaks we want you to be aware of so you can take full advantage of them. Today’s post addresses changes to the tax laws regarding small business cell phones and luxury vehicles.
Limits on personal exemptions and itemized deductions have ended. You no longer lose part of your deduction for personal exemptions and itemized deductions, regardless of the amount of your adjusted gross income.
If you have any questions on tax preparation or tax planning, please contact us.
© 2011 Thomson Reuters/RIA. All rights reserved.
Mar 11 2011
2010 Tax Relief Act Alters Estate and Gift Taxes: GST Tax Changes
The 2010 Tax Relief Act made many beneficial changes to the rules regarding estates and gifts. One such change regards the GST (generation-skipping transfer tax). The GST is an additional tax on gifts and bequests to grandchildren when their parents are still alive. The 2010 Tax Relief Act lowers GST taxes for 2011 and 2012 through raising the exemption amount from $1 million to $5 million (as indexed after 2011) and reducing the rate from 55% to 35%.
Please call our office for any questions regarding this change to the tax rules.
© 2011 Thomson Reuters/RIA. All rights reserved.
Mar 09 2011
2010 Form 1040 Tax Breaks: Adoption Credit
The 2010 Form 1040 reflects a number of new tax breaks we want you to be aware of so you can take full advantage of them. Today’s post addresses changes to the tax laws regarding adoption credits.
The maximum adoption credit is $13,170 per eligible child for both non-special needs adoptions and special needs adoptions. The adoption credit is also refundable, i.e., you get the credit even if it exceeds your taxes.
If you have any questions regarding tax planning, please contact out office.
© 2011 Thomson Reuters/RIA. All rights reserved.
Mar 07 2011
Printable Forms Available: Form 1099 Employer Prepared Worksheet
The 1099 Employer Prepared Worksheet will help you keep track of to whom you have issued a 1099. This worksheet is very helpful in maintaining accurate tax records. Please contact us with any questions.
Mar 04 2011
2010 Tax Credit for Small Businesses that Provide Health Coverage
Small businesses that provide health care coverage for their employees were given a 2010 tax credit within the recent health care legislation. The credit is generally 35% of the employer’s premium contribution (25% for tax-exempt entities).
Eligibility to qualify as a small employer is reevaluated each tax year. The following conditions must be met:
1) employer has 25 or fewer full-time equivalent (FTE) employees
2) the average annual wages of these employees are not greater than $50,000
3) the employer has a qualified health care arrangement in effect
Not all employees can be included in the determination of FTEs. Sole proprietors, partners in a partnership, shareholders owning more than 2 percent of an S corporation, and any owners of more than 5 percent of other businesses should be excluded. Also, family members of these owners and partners should not be taken into account as employees.
While the qualifications for the credit are fairly straightforward, the actual calculation can be quite convoluted (go to http://www.youtube.com/watch?v=sb59uJNJVJc for an entertaining discussion of the calculation). If your company meets the criteria outlined above, you may qualify for the credit.
Please contact our office for more information on the calculation process or on tax planning in general.
© 2011 Thomson Reuters/RIA. All rights reserved.
