Thursday, November 29, 2012

Obama Tweets for Tax Cut Extension

President Barack Obama urged middle-class families who are in danger of seeing their taxes go up next year to begin using Twitter and other forms of communication to urge lawmakers to extend tax cuts for the middle class.

Obama said Wednesday they should use a new Twitter hashtag, #My2K, to explain what they would do with the additional $2,200 that a family of four is estimated to pay next year if the current tax rates expire for taxpayers earning less than $250,000 a year.

Monday, November 26, 2012

New IRS Notices Related to Form 1099-K

If you receive a letter or notice from the IRS, it will explain the reasons for the correspondence and provide instructions. The notice you receive covers a very specific issue about your account or tax return. Generally, the IRS will send a notice if it believes you owe additional tax or are due a larger refund, or if there is a question about your tax return.

Friday, November 23, 2012

2013 Standard Mileage Rates Up 1 Cent per Mile for Business, Medical and Moving

WASHINGTON — The Internal Revenue Service today issued the 2013 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2013, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 56.5 cents per mile for business miles driven
  • 24 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The rate for business miles driven during 2013 increases 1 cent from the 2012 rate.  The medical and moving rate is also up 1 cent per mile from the 2012 rate.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle.  In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.

These and other requirements for a taxpayer to use a standard mileage rate to calculate the amount of a deductible business, moving, medical, or charitable expense are in Rev. Proc. 2010-51.  Notice 2012-72 contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.

-IRS Notice 2012-95

Thursday, November 22, 2012

Happy Thanksgiving from NFS

Today, we all move pretty fast and sometimes we rush right by the simple things in life, like thanking our colleagues, customers and friends for all that they do.

We’d like to “slow down” for a minute, during a very challenging year, as we approach one of America’s great traditions of “taking stock and giving thanks.” For almost 400 years, our country has celebrated Thanksgiving Day to give thanks for what we have and express gratitude to each other.

Your friends at Northeast Financial Strategies want you to know how much your loyalty and friendship are appreciated this year and in all years past.

To you and your family, from all of us here at NFS, a very Happy Thanksgiving!

Wednesday, November 21, 2012

What is a FUTA Tax Surcharge?

FUTA Tax Surcharges – Form 940 Schedule A for 2012

Some states have borrowed from the Federal government to pay unemployment benefits and have not yet repaid the money. As a result employers with payroll in those states have a “credit reduction” that applies to effectively reduce the maximum .054 credit. The reduction in the credit means a net increase in the FUTA taxes due for the year.

Tuesday, November 20, 2012

IRS Announces Per Diem Rates

Per Diem Amounts - Effective October 1, 2012

The M&IE rates have stayed at the same $46, $51, $56, $61, $66, and $71 although some cities may have different rates that they had for the prior fiscal year (October 1, 2011-September 30, 2012).  The full per diem tables by state and key city can be found at  IRS Publication 1542 has been discontinued and is no longer available for new years.

The definition of “incidental expenses” has changed.  Effective October 1, 2012, this includes only fees and tips given to porters, baggage carriers, hotel staff, and staff on ships.  Transportation between places of lodging or business and places where meals are taken, and the mailing cost of filing travel vouchers and paying employer-sponsored charge

Monday, November 19, 2012

Hobby or Business?

If an individual, partnership, estate, trust, or an S corporation engages in an activity that is not conducted as a for-profit business, deductions are limited to the amount of income from the activity. This rule does not apply to corporations, other than S corporations. If an activity is considered a for-profit business, deductions can exceed income, allowing the resulting loss to offset other income.

Friday, November 16, 2012

Can I Use My Roth IRA Contributions For a First Home?

Q: I am 26 and I have been contributing to my Roth IRA since I was 18. Now, I am looking to purchase my first home and was considering taking funds from my Roth IRA. The 5-year rule is confusing to me and I am not sure how this applies to me, given the circumstances. Are the funds in my Roth IRA penalty free, and tax free when withdrawn for the purpose of buying a first home?

Thursday, November 15, 2012

2013 Social Security Taxable Wage Limit & Employee Rates

The Social Security Administration announced an upward cost-of-living adjustment for the Social Security taxable wage limit. For year 2013,the amount of earnings taxable for Social Security (Old Age, Survivors and Disability Insurance, or “OASDI”) will increase from $110,100 to $113,700. The temporary decrease in the employee tax rate from 6.2% to 4.2%, last extended under the Middle Class Tax Relief and Job Creation Act of 2012, expires on December 31, 2012.

Wednesday, November 14, 2012

Obama Victory Leads to Fast Tax Moves by Wealthy Before 2013

(Bloomberg) The race is on for wealthy Americans to save on taxes before January 1.

President Barack Obama’s re-election means his administration will push to let tax cuts enacted during the George W. Bush era expire for high earners, as scheduled, at year-end. Obama wants to increase the top federal income tax rate to 39.6 percent from 35 percent, boost rates on long-term capital gains to as much as 23.8 percent, and shrink exemptions from estate-and-gift taxes.

Wednesday, November 7, 2012

Obama Wins Re-election, Pledging to Reform Tax Code

President Barack Obama delivered his acceptance speech early Wednesday morning after winning re-election in a hard-fought campaign against Republican rival Mitt Romney as the U.S. faces the risk of another plunge into recession with the expiration of the current tax rates coupled with deep automatic spending cuts.

In his acceptance speech at McCormick Place in his native Chicago, Obama promised to work with both parties to solve the country’s lingering economic problems. “You elected us to focus on your jobs, not ours,” he said. “And in the coming weeks and months, I am looking forward to reaching out and working with leaders of both parties to meet the challenges we can only solve together: reducing our deficit, reforming our Tax Code, fixing our immigration system, freeing ourselves from foreign oil. We’ve got more work to do.”

Tuesday, November 6, 2012

Election Day is Here

Today is election day in America - it doesn't matter who you decide to vote for, just get out there and do it! Not voting, is a wasted vote.

Voting in Wrentham is at the Delaney School, Gibbons Gym, 120 Taunton St. Polls open Tuesday, November 6 at 7 a.m. and will close at 8 p.m.

Thursday, November 1, 2012

IRS Extends Deadlines After Sandy

The IRS is granting taxpayers and tax preparers affected by Hurricane Sandy until November 7 to file returns and accompanying payments.

The relief applies to taxpayers and preparers in an area affected by Hurricane Sandy or otherwise impacted by the storm. It primarily applies to businesses whose payroll and excise tax returns and payments were due on October 31. No action is required by the taxpayer; the relief is automatic. Regular federal tax deposits are due according to current rules.